Fundamental analysis, also known as fundamental analysis, is based on the intrinsic value of securities and focuses on the analysis of various factors that affect security prices and trends, in order to decide which securities to invest in and where. time to purchase.
The premise of basic analysis is that the price of a security is determined by its intrinsic value. The price changes frequently due to the influence of political, economic, psychological and many other factors, and it is difficult to be completely consistent with the value. , but always fluctuates around the value. Rational investors should make investment decisions based on the relationship between security prices and values.
Basic analysis is mainly suitable for securities price predictions with relatively long cycles, relatively mature securities markets, and areas where prediction accuracy is not high.
Fundamental analysis includes:
(1) Macro: Study a country’s fiscal policy and monetary policy, and use scientific analysis methods to find out the intrinsic value of the market and compare it with the market Compare the actual value to select the stocks with the most investment value.
(2) Micro: Study the economic behavior of listed companies and corresponding economic variables to provide a reference for buying and selling stocks.
In terms of fundamental analysis, the most fundamental thing is the company’s fundamental analysis. The most important thing for a company’s fundamental analysis is financial analysis. This is a required course. If it is just about data, Interpretation, the three major statements can fully explain the problem, but in fact it is far from that simple. Based on my experience summary, listed companies will more or less play tricks on their financial statements, and some even directly falsify their financial statements. , these all need to be discovered and corrected by ourselves. Some are financial tricks, which are not illegal, some are deliberate false reports, and some are direct frauds. For example, in order to pursue main business income, some companies will lower the price of products or services. This gross profit margin will become very low, and the net profit margin will sometimes be negative. This situation may also cause a sharp increase in 'accounts receivable'. . There are also some companies that whitewash the depreciation of fixed assets in order to make their annual reports look good, or treat part of their profits as deferred revenue in order to achieve an average net profit growth rate. Some companies are obviously losing money in their main business, but with the addition of non-operating income, they can have considerable net profits. All these financial methods must be slowly learned through the accumulation of experience and knowledge learning, and how to correct them. The most powerful one is the company. In the annual report, many issues that are not reflected in the financial statements will be fully explained in the annual report. Pay special attention to the notes that are not very eye-catching. Sometimes major issues will only be mentioned briefly in the corner. These are what we are looking for. information.
Content analysis:
Macroeconomic conditions
From a long-term and fundamental perspective, the trends and changes in the stock market are determined by a country’s economic development level and economic prosperity. Determined by conditions, stock market price fluctuations also reflect changes in macroeconomic conditions to a large extent. It is not difficult to find from the historical trends of foreign securities markets that the changing trends of the stock market are generally consistent with the economic cycle. In times of economic prosperity, companies are in good operating condition and making a lot of profits, and their stock prices are also rising. When the economy is in recession, a company's revenue and profits decline, which will also cause its stock price to continue to fall. However, the trend of the stock market is not completely consistent with the economic cycle in time. Usually, the changes in the stock market must be ahead of time, so the stock market price is called a barometer of the macro economy.
Interest rate level
Among the many factors that affect the trend of the stock market, interest rate is a relatively sensitive factor. Generally speaking, rising interest rates may attract some funds to the bank savings system, thereby reducing the amount of funds in the stock market and having a certain impact on stock prices. At the same time, as interest rates rise, business operating costs increase and profits decrease, which will also cause stock prices to fall accordingly. On the contrary, when interest rates fall, people may invest more funds in the stock market out of the inherent need to maintain and increase value, thereby stimulating an increase in stock prices. At the same time, due to lower interest rates, business operating costs are reduced and profits are increased, which in turn causes stock prices to rise.
But for banks, when interest rates rise, if the interest rate spread between deposits and loans increases, banks can adjust the ratio of deposits to loans and increase the amount of loans to achieve an increase in net profits, which is beneficial.
Inflation
This factor has both advantages and disadvantages on the trend of the stock market. It has the effect of stimulating the market and suppressing the market, but overall it does more harm than good. , it will promote the bubble component of the stock market to increase. In the early stages of inflation, an increase in currency will stimulate production and consumption and increase corporate profits, thereby causing stock prices to rise. But when inflation reaches a certain level, it will push interest rates up, causing stock prices to fall.
Enterprise quality
For a specific stock, the main factor that affects its price is the intrinsic quality of the enterprise itself, including financial status, operating conditions, management level, technical capabilities, A series of factors such as market size, industry characteristics, and development potential.
Political factors
Refer to political reasons that have a direct or indirect impact on the stock market, such as international political situations, political events, relations between countries, and important political leaders Changes in people, etc., will have a huge and sudden impact on the stock price. This is also an important aspect that should be considered in fundamentals.
Industry factors
Changes in the status of the industry in the national economy, the development prospects and potential of the industry, the impact of emerging industries, etc., as well as the position of listed companies in the industry Position, operating performance, operating conditions, changes in capital mix and changes in leadership personnel will all affect the price of related stocks.
Market factors
Investor trends, intentions and manipulations of large investors, cooperation or mutual shareholdings between companies, increases and decreases in credit transactions and futures transactions, and arbitrage behavior of speculators , the company's capital increase method and capital increase amount, etc., may have a greater impact on the stock price.
Psychological factors
Investors’ psychological state changes after being affected by various aspects, which often leads to mood swings, errors in judgment, blindly following big investors, and crazy buying. It is often an important factor that causes stock prices to plummet and rise sharply.