The free online course is designed to help you find your own investment strategy and discover your investment personality. I do not use fundamental analysis. Although fundamentals will ultimately determine the future of a stock price, it may not be in your future! Take Home Depot for example. I have a love hate relationship with Hope Depot. I love shopping there as most men do, but I hate the fact that my local hardware store shut down after a loooooooong time in business. Home Depot is home to 385,000 employees, generates around $88 Billion per year in sales, has either met or beat analyst estimates for earning in the last four reporting cycles, is earning a $Billion more than last year, and earned a $Billion more that year than the previous year. Yet, the stock is right where it was a year ago.
I think the stock will turn around, I just don’t know if it will be in time for me to benefit. The main point here is the the underlying fundamentals of a company are not always linked to it’s stock price. In a perfect world, you still see a growing company’s stock move in a straight line up, a little each day as it gains more value. We all know that stocks zig zag all over the map, sometimes for good reason, sometimes for no reason at all.
The zigging and zagging is what interests me, not who is zigging or zagging and no one really knows why. Some stocks drop on good news, even on huge upside earnings surprises.