Glossary

Fundamental analysis is an investment evaluation method that involves examining a company's financial statements, industry trends, and other relevant factors to determine its intrinsic value.

The main goal is to identify whether a stock is overvalued or undervalued based on its underlying financial health and future growth potential. Factors considered in fundamental analysis include revenue, earnings, cash flow, debt levels, and management quality, among others. 🔎

For example, if an investor wants to invest in a tech company, they might examine the company's earnings growth, profit margins, and compare them with competitors to decide if it's a good investment opportunity.

Fun fact: Benjamin Graham and David Dodd are considered the "fathers of fundamental analysis," as they pioneered the approach in their 1934 book, "Security Analysis." Warren Buffett, one of the most successful investors of all time, is a well-known proponent of fundamental analysis. 📚💡