What we see today is the world getting richer and everyone is creating wealth or attempting to create it but what we do not realise is that when we create wealth, we create money, we create value and we see value in money, when it's actually not there. We want to buy companies but they do not want to research on what the company does, what the company aims to achieve and has it achieved it in the past.
To do this, we read there annual report and try to assess whether what the company has been doing is efficient enough or not. Here lies the actual true intrinsic value of the company and thus this is what we need to see.
Our books have taught us wrong this is not a race for money this is a race where we try to find the potential of the assets owned by the company and thus we are analysing their book value which is very important as that will tell us the real value of the firm
This is what we need to remember and this is the first lesson when we do a fundamental analysis of a company. We need to see value, we need to see the assets and we need to assess whether that value can be generated over a period of time by those assets. This, in true essence is Fundamental Analysis.
To do this, we read there annual report and try to assess whether what the company has been doing is efficient enough or not. Here lies the actual true intrinsic value of the company and thus this is what we need to see.
Our books have taught us wrong this is not a race for money this is a race where we try to find the potential of the assets owned by the company and thus we are analysing their book value which is very important as that will tell us the real value of the firm
This is what we need to remember and this is the first lesson when we do a fundamental analysis of a company. We need to see value, we need to see the assets and we need to assess whether that value can be generated over a period of time by those assets. This, in true essence is Fundamental Analysis.
