In August I published a four-part series on IGM Financial (IGM) where I took readers through the process of conducting an in-depth fundamental analysis of the qualitative and quantitative factors I use in my stock analyses.
With the increase in comments and emails from new investors I thought it might be a good time to review a few of the central themes and ideas from this series to help simplify the process and create a “check list” of items you want to remember when you’re working through the learning phase of conducting a stock analysis.
Here are a few helpful tips to keep in mind when going through the process of a stock analysis:
- Pick a stock and business model you can easily understand
- Don’t get discouraged if you encounter barriers in your research
- Be adaptive & resourceful
- Be creative – think outside of the box whether right or wrong this can often lead to important insights
- Focus on the Situational Analysis first
- Be specific in your research
- Keep things simple
- Take the time needed to read over financial statements or learn
- Understand the numbers
- Consider taking an introductory accounting/business course at your community college or read an introductory accounting textbook at your library
- Focus on understanding the specific elements of your analysis and then worry about putting them together into the bigger picture
- Take the time to develop your confidence
- Know yourself and your limitations
- If at first you don’t succeed…try, try again!