I read a fundamental analysis post the other day. The post was rather standard in terms of length, but just reading it (without much understanding since I'm new to fundamental analysis) took several minutes. Now obviously people spend a lot more time actually doing the analysis before writing it out. That left me with one question.
The question I have is how to do a quick stock evaluation. It's obviously not going to be nearly as thorough as doing the proper analysis. The idea is to be able to quickly – as in spend 30s looking at a few key numbers – classify stocks in three groups:
-
Good stocks
-
Bad stocks
-
All other stocks
with the idea that you're pretty confident you correctly classified good / bad stocks and when you cannot do it quickly you put the stock in “all other stocks” group which you understand is either a) going to require more analysis to classify as good / bad or b) may be one of the stocks that is just “meh” or similarly unclassifiable (e.g. very good in some respects, but very bad in others or something of sorts).
In other words – if someone gave you e.g. finviz report (or whatever your choice of online stock data resource is) of some good / great stock and some bad / thrash stock, would you be able to very quickly glance at a few numbers and determine what kind of stock they are?
If so, what would your process / go-to metrics be?
Leave a Reply