I’m going to take a different approach than my usual Taking Stock inTM format of stock analysis at the request of a friend, Steve, who’s still new to learning about investing. I’ll let him explain…
What Steve has shared with me I’ve heard from other readers and it might explain the lack of comments I receive to a lot of the content on my site. While the content might be great and insightful, it’s not helping a new investor in getting from point A to B simply because the distance between those two locations at first glance seems too far. You need to see the steps before you can start to take them yourself.
Learning to invest shouldn’t be overwhelming and an inability to see the steps shouldn’t be a deterrent. In this series of posts I’m going to help new investors gain a better understanding of how to analyze stocks and their investment potential. Instead of publishing a long post with lots of data, analysis and value insights I’m going to take readers on a journey behind the scenes of how I conduct a stock analysis in order to give you a perspective into “Seeing the Big Picture” through my eyes. I won’t tell investors what they should do, because every investment decision is ultimately up to them, but I’ll provide the steps of what I do and how to allow readers to decide for themselves if the process is something they want to do on their own.
Each Monday during the month of August I’ll post one component of this analysis in both text & PDF so readers can choose to revisit the site for the content or save the analysis to use at their own discretion. The series will be labelled under a new category, Investing 101, and archived in the Top Posts under the heading Series
August 4th, 2008
Part I: The Situational Analysis – Qualitative Data
August 11th, 2008
Part II: The Numbers – Collecting Quantitative Data
August 18th, 2008
Part III: The Numbers – Definition & Interpretation
August 25th, 2008
Part IV: Determining Valuation – Comparing, Analyzing & the Dividend Discount Model
Fantastic! Looking forward to this for sure. While I’ve learned a lot from all your writing, I’m still not confident with my own research.
I visit your site alot and look forward to the posts.
I’m glad you’re both looking forward to the posts. And I somehow knew that Susan would be excited.
I will be away at the cottage for most of August, but I’ll schedule the posts ahead of time for 6am on those dates and reply to comments/emails when I return.
On the other hand, if someone needs you to tell them what to do, maybe they shouldn’t invest independently.
I think regular readers understand when reading the content of this site that the information I provide isn’t simply telling them what to do. The point I believe steve is trying to make (though I can’t speak for him) is that for an investor starting out and wanting to invest independently that there are times when it helps to hear what those in their shoes years ago did in order to reach the level of investing knowledge they sustain today.
I would hope that an individual wouldn’t invest independently until they were ready, but I certainly can’t stop someone from doing so if that is the path they choose.
I believe it is essential for one to be guided through the initial process of stock analysis if they have no background in such area. Sure, you can learn on your own, but having sound advice and understanding the fundamentals from someone with experience makes for a smoother ride. Eventually you can decide which path to take.
Also, everyone has different learning methods, and a step-by-step approach utilizing real companies and current information appears to be quite beneficial to those novice readers.