Buying the Business, Not the Stock
A significant part of this book is devoted to examining and analyzing businesses. This may come as a surprise to many new investors, who may have expected to be examining stocks. However, investors make money in the stock market by buying great companies, not great stocks.
Investing in stocks is really about investing in businesses. Don’t be intimidated at the thought of analyzing businesses when balancing the checkbook is a struggle enough. The good news is that most of the heavy lifting has already been done by people more qualified than you or I to crunch the numbers.
It is important, however, that you understand the key metrics and how you can use them to make decisions about buying or selling a stock. You ...