Fundamental Analysis

Do not invest in Stock Market Invest in Business

 there are 3 type of analysis in share market

  1. Fundamental Analysis
  2. Technical Analysis
  3. Techno fundamental analysis

in fundamental analysis we select good company
With the help of technical analysis we do trading of company we actually predict the future price of shares using technical analysis using the help of graph
Technical analysis primarily depend on demand and supply

If demand is more than share value is more
like wise if supply is more the share value decrease

Technical analysis help you to buy and sell the share for short term as we can predict the price of share

In this blog I am writing about fundament analysis

Fundamental analysis helps to choose company

Qualitative Analysis

Quantitative Analysis

Management Analysis

Balance Sheet

Past, Present and future

Profit/ loss account

Comparative advantage

Ratio analysis


if Actual Price is more and Market price is less than it is under valued stock

if actual price is less and market price is more than it is called over valued stock

if actual price is equal to market price than it is called correct valued stock

EPS: Earning per share means how many we earn from 1 share in 1 year
Higher EPS is better



Market price is current price in Market



P/E Ratio (Price / Earning ratio)

P/E ratio = Current market price / EPS
for 1 rupees earning how many rupees can investor invest
it is risk to invest if P/E ratio is higher than 20

According to P/E ratio
if P/E ratio is < 10 than it is under valued stock
 if P/E ratio is > 20 than it is over valued stock
if P/E ratio is around 15 than it is called correctly valued stock

(Book value) Net Worth Per Share= (Total Assets-Total Liabilities) / Total public share

More net worth per share is good 

Price of share is twice/ trice or four time the net worth

Next way to find undervalued stock is Graham Number

if Graham Number is equal to market value it is correctly valued share
if Graham Number is less than market value it is over values
if Graham Number is more generally it won't be  than its under values

The graham number or Benjamin Graham number is a figure used in securities investing
that measures a stock's fair value.
It is named after Benjamin Graham the founder of value investing

Graham Number = square root under (15 * 1.5 * EPS * book value)

if we can confused among different stock or share we can calculate the Graham Number of each share or stock and invest on share with less Graham number
 

In fundamental analysis there is
  1. Economic Analysis
  2. Industry Analysis
  3. Company Analysis
    • Management
    • Financial
    • Valuation

If more interest rate nepse is less
If less interest rate nepse is more

more paid up capital is good
if there is more paid up capital there will be more bonus

game is all about common sense so Chill and invest

Just look at profit, net income and revenue
Make sure Asset is very much greater than liabilities
Look at the Annual Report read it properly 


We should should choose multi bagger stock
so how to choose multi bagger stock?
1) Are Promoter or Founder Buying or Selling
    If promoter are holding that company must be growing 
    Follow Investor with high net worth 
2) Institution don't own it yet 
     and if Investor stats investing in that stock than that particular stock will go to boom or bull
3) Company has Niche(particular categories)  
4) Its Recurring revenue Model
5) look at the quality of product and company of that product
6) Choose that company whom most people don't like 
7) Company using new technology



Investment strategies 
1) Magic of compounding (compound interest)
2) Where to invest
        knowledge to make money in long range is 0
        knowledge to make money in short range is more
3) Mutual fund is just a scam
4) Active income vs Passive income(no one can be full time trader)
5) Trading tips scam
6) Trading strategies
  • intraday trading    
  • luck doesn't last for ever
  • swing trading
  • trade like a casino
  • most people win small and lose big
  • trade 1 for 2
  • set the stop loss
  • make your own software for analysis 

mainly go for the technical analysis with the good or sound fundamental analysis technique.



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