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    Day 1 Merged

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    Manish
    Fundamental analysis examines a company's financials and business to determine its intrinsic value, while technical analysis studies past stock price movements to identify trends. Fundamental analysis looks at microeconomic factors like management and macroeconomic factors like the economy, whereas technical analysis focuses only on price and volume. Top-down investing first examines the macroeconomy and sectors before selecting individual stocks, while bottom-up investing starts with company-level analysis and builds a portfolio from there. Quantitative analysis uses measurable metrics like assets and cash flow, but cannot capture qualitative factors like management competence, which require subjective judgment.

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    Day 1 Merged

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    Manish
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    Fundamental analysis examines a company's financials and business to determine its intrinsic value, while technical analysis studies past stock price movements to identify trends. Fundamental analysis looks at microeconomic factors like management and macroeconomic factors like the economy, whereas technical analysis focuses only on price and volume. Top-down investing first examines the macroeconomy and sectors before selecting individual stocks, while bottom-up investing starts with company-level analysis and builds a portfolio from there. Quantitative analysis uses measurable metrics like assets and cash flow, but cannot capture qualitative factors like management competence, which require subjective judgment.

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    Fundamental analysis examines a company's financials and business to determine its intrinsic value, while technical analysis studies past stock price movements to identify trends. Fundamental analysis looks at microeconomic factors like management and macroeconomic factors like the economy, whereas technical analysis focuses only on price and volume. Top-down investing first examines the macroeconomy and sectors before selecting individual stocks, while bottom-up investing starts with company-level analysis and builds a portfolio from there. Quantitative analysis uses measurable metrics like assets and cash flow, but cannot capture qualitative factors like management competence, which require subjective judgment.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    14 views3 pages

    Day 1 Merged

    Uploaded by

    Manish
    Fundamental analysis examines a company's financials and business to determine its intrinsic value, while technical analysis studies past stock price movements to identify trends. Fundamental analysis looks at microeconomic factors like management and macroeconomic factors like the economy, whereas technical analysis focuses only on price and volume. Top-down investing first examines the macroeconomy and sectors before selecting individual stocks, while bottom-up investing starts with company-level analysis and builds a portfolio from there. Quantitative analysis uses measurable metrics like assets and cash flow, but cannot capture qualitative factors like management competence, which require subjective judgment.

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    of 3

    Day 1: Task 1

    Fundamental vs Technical analysis


    When approaching the markets, fundamental and technical analysis are two primary
    schools of thought at different ends of the spectrum. Both are used by investors and
    traders to investigate and forecast future stock values. Technical analysis examines a
    security's price movement and uses this information to forecast future price fluctuations.
    On the other hand, fundamental analysis looks at the economic and financial aspects
    that drive a business.

    Fundamental Analysis
    It is a method of measuring a security's intrinsic value by examining related economic
    and financial factors. Fundamental analysts study anything that can affect the security's
    worth, from macroeconomic factors such as the state of the economy and industry
    conditions to microeconomic factors like the effectiveness of the company's
    management. The end goal is to determine a number that an investor can compare with
    a security's current price to see whether the security is undervalued or overvalued.

    In layman's terms, it "Helps an investor understand which stock to buy."

    Technical Analysis
    Technical analysis is a trading discipline employed to evaluate investments and identify
    trading opportunities by analyzing statistical trends from trading activity, such as price
    movement and volume. Unlike fundamental analysis, which attempts to assess a
    security's value based on business results such as sales and earnings, technical
    analysis focuses on the study of price and volume.

    In layman's terms, it "Helps to understand when to buy the stock."

    Investopedia Video: Fundamental vs Technical Analysis

    For any issues mail us at: finneco_club@iitg.ac.in

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    Day 1: Task 2
    TOP-DOWN VS. BOTTOM UP :
    Using a variety of investment analysis strategies is one of the keys to successfully managing
    your investment portfolio. Investment analysis is a method of determining the future
    performance of an asset by evaluating various types of assets and securities, industries, trends,
    and sectors. This will allow you to determine how well it will fit into your investment objectives.
    Top-down and bottom-up investing are two of these tactics.

    TOP-DOWN APPROACH
    Before delving into individual stocks, top-down investors examine macroeconomic issues such
    as monetary policy, inflation, economic growth, and larger events. After examining global
    macroeconomic conditions, researchers assess general market conditions to identify
    high-performing sectors, industries, or areas within the macroeconomy. The idea is to identify
    specific industrial sectors that are expected to outperform the market. Top-down investors direct
    assets to outperforming economic regions rather than betting on specific companies based on
    these qualities. Instead of starting with the complete universe of individual company stocks,
    top-down investment can better use an investor's time by looking at large-scale economic
    aggregates before deciding on regions or sectors, and then specific companies.

    However, by excluding specific companies that beat the overall market, top-down investors may
    miss out on numerous potentially profitable possibilities.

    BOTTOM-UP APPROACH
    In this technique, we analyze individual companies before constructing a portfolio based on
    specified criteria. In this approach to investing, investors tend to focus on microeconomic
    aspects. Bottom-up investors select a company and then examine its financial health, supply,
    demand, and other aspects over a given time period. Bottom-up investing assumes that
    individual companies can outperform their industries, at least in terms of relative performance. A
    company's distinctive marketing strategy or organizational structure, for example, is a leading
    indicator that prompts a bottom-up investor to invest. Accounting inconsistencies in a specific
    company's financial accounts, on the other hand, may suggest trouble for a company in an
    otherwise thriving industry.
    Watch this video: What is Top down and Bottom up approach while investing? (Animated…

    For any issues mail us at: finneco_club@iitg.ac.in

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    Day 1: Task 3
    QUANTITATIVE VS QUALITATIVE ANALYSIS
    Quantitative Analysis:
    The quantitative side examines numerically measurable aspects such as the company's assets,
    liabilities, cash flow, sales, and price-to-earnings ratio. The purpose of fundamental analysis is
    to generate a quantifiable value that investors may compare to the present price of a security to
    determine whether it is undervalued or overvalued.

    The shortcoming of quantitative analysis is that it does not capture characteristics or hazards
    that are not quantifiable, such as the value of an executive or the risks a company faces with
    legal concerns. The analysis of these items is the qualitative, or non-number side of basic
    analysis.

    Qualitative Analysis:
    The qualitative analysis employs subjective judgment to assess a company's value or prospects
    based on non-quantifiable data such as management competence, industry cycles, R&D
    strength, and labor relations. Subjective judgment is used in qualitative analysis based on "soft"
    or non-quantifiable data. It deals with intangible and imprecise data that can be difficult to
    acquire and quantify. Machines struggle with qualitative analysis because intangibles cannot be
    defined numerically.

    For any issues mail us at: finneco_club@iitg.ac.in

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