GENERAL INVESTMENT ANALYSIS

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Introduction

• How to Do Well In This Class
• Spend enough time on the assignments and
  articles so that you feel comfortable with the
  topic.
• - this does not necessarily mean you get
  everything correct but complete ignorance will
  not be bliss for the exam.
• Listen and participate in class by answering and
  asking questions. Studies show that people
  remember much more of what they hear than what
  they read, so simply reading the notes and book
  may not be enough for many students.
• -active participation is also a better way to
  remember the material we cover. For those who
  often struggle on exams, it shows me that you may
  still be competent in the subject matter and are
  at least trying.
• -in your future job you will do most of your
  learning by listening to others and
  participating in meetings.

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This is not what I consider participation.
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GENERAL INVESTMENT ANALYSIS

• INVESTORS NEED TO
• gather (info services)
• process (computer)
• and interpret (models) information
• then make logical investment decisions
• fits many skilled job requirements - not just
  invest.

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STEPS TO ANALYZING A STOCK
1. Analyze the general economy 2. Choose an
industry you expect to benefit from economic
trends - for example, biotech. 3. Choose a niche
in the industry. For example liposome
products 4. Gather information on all companies
in the niche - choose one or two that are most
promising
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INFORMATION TYPES

• A. Direct information from financial statements,
• newspapers, internet etc.
• financial position - ratios, etc.
• differential strengths - patents, size,
  economies of
• scale, scientists, brand name
• read brokerage reports - especially those that
  compare competing firms
• consider past and potential future growth of
  total market and firms market share

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• B. Indirect information
• stock ownership of management
• level and incentives in management pay
• ownership of institutional investors
• management credentials and experience
• suppliers and partners - call and question
• customers - call and question

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• customer service and product distribution
• test products yourself - ask others their
  opinion
• of products - store sales people
• watch for price cutting and stock levels in
  stores
• check competitors products and potential
• competitors outside the industry
• technical analysis
• See Finance Jobs Websites from my links