How to Analyze Stocks for Beginners (Complete Guide)

In this video, I talk about how to analyze stocks for investment, primarily for beginners. This is a complete guide and an easy introduction to fundamental analysis.

To begin with, you have to design your stock portfolio. If you still need to do this, check out my video titled "How to Build a Stock Portfolio from Scratch." This will tell you everything you need to know.

Once you have an idea for your stock portfolio, it's time to analyze stocks. Starting around the 3-minute mark of this video, I completely breakdown how to analyze stocks for beginners.

First, I use the P/E ratio to get a general idea of whether a stock is reasonably priced or not. According to the Intelligent Investor, by Benjamin Graham, a good pe ratio is about 12. This is a great reference point, but as I explain in the video, the real utility of the pe ratio is in using it to compare similar companies.

Next, I look at the financial statements, specifically the Income Statement, the Balance Sheet, and the Cash Flow Statement. Using these tools, you'll confidently know how to analyze stocks for investment.

On the income statement, I look at the Operating Income. I want this to be positive and growing.

On the balance sheet, I take note of the current assets to current liabilities ratio. This ratio, like the P/E ratio, is useful for comparing similar stocks. This comparison is crucial in learning how to analyze stocks for long term investment.

Lastly, on the Cash Flow statement, I look at the Operating Cash Flow and want it to be positive and growing.

These metrics are key to understanding fundamental analysis and how to analyze stocks for beginners.

Near the end of this video, I talk about another way to analyze stocks, qualitative analysis. Qualitative analysis is analyzing a stock without crunching numbers. As customers, Peter Lynch says we can use qualitative analysis to analyze a stock.

Hopefully, after watching this video, you will have learned how to analyze stocks for investment. Again, this video is primarily for beginners learning fundamental analysis.

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Видео How to Analyze Stocks for Beginners (Complete Guide) канала Joey Wakeman