Understanding the Stock Market
Delivered January 13, 2020. Contributor: Ashley N.
Goals
To understand the best ways to evaluate a stock market investment (i.e. evaluate whether to purchase a stock) in order to become a stock analyst and better inform investment decisions. Specifically, the research should address the following:
- List of the best investment criteria for choosing stocks.
- How to obtain information about stocks.
- How to understand stock market trends.
- How to understand the trends/past-present happenings with a specific stock.
- How to evaluate an earnings calls/reports.
- How to determine if a stock is stable or volatile.
- How to evaluate if a stock investment is good for short term or long term growth.
Early Findings
Investment Criteria for Choosing Stocks
- Stock choosing criteria published by NASDAQ in 2018 can be found here.
- Stock choosing criteria published by Investopedia in 2019 can be found here.
- Stock choosing criteria published by Cabot Wealth in 2019 can be found here.
How to Obtain Information About Stocks
- A guide on how to do research about stocks published by Fidelity Investments in 2017 can be found here.
- A guide on how to do research about stocks published by Nerdwallet in 2019 can be found here.
How to Understand Stock Market Trends
- A guide on how to analyze stock market trends published by Motilal Oswal Investment Services has been provided here.
How to Understand the Trends With a Specific Stock
- A guide on understanding stock trends published by MarketSmith has been provided here.
How to Evaluate an Earnings Report/Call
- A guide on how to evaluate a company's earnings report published by Investopedia in 2019 has been provided here.
How to Determine Stock Stability
- A guide on how to measure stock volatility published by Investopedia in 2019 has been provided here.
How to Evaluate Short-Term vs. Long-Term Stock Growth
- A guide on how to decide when to sell or hold a stock published by Investopedia in 2019 has been provided here.
Proposed next steps:
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Initial research conducted on this topic has shown that there is a lot of information available published by industry experts that addresses the aforementioned topics and subtopics. We can continue this research by creating a detailed guide for each topic/subtopic that is based on insights and advice from industry experts. We can start by provided a deep dive guide of the following: 1) The best criteria for choosing stocks to invest in (this will include a list of 7-10 criteria, for each criteria we will include a) an overview of the criteria b) a list of 3-5 experts who recommend focusing on this criteria when it comes to choosing stocks); 2) A detailed guide on how to research stocks (i.e. how to obtain information about stocks); 3) A detailed guide on how to understand market trends, and 4) A detailed guide on how to determine stock stability. Each guide will aim to be new-investor friendly (i.e. explain things in a way that is simple and easy-to-digest) while providing as many important details as possible. Additionally, each guide will be based on insights and advice published by investment experts and professionals.
Alternatively, we can build a list of 5-7 of the best books about analyzing stocks. The books chosen will focus on the following areas: best criteria for choosing stocks, how to research stocks, how to understand stock market trends, how to understand the trends of a specific stock, how to evaluate earnings calls/reports, how to determine if a stock is stable or volatile, and how to evaluate if a stock investment is good for short term or long term growth. For each book identified, the following information will be provided: 1) Title, name of author, date of publication, 2) 1-2 sentence author bio that explains why they are an expert on this subject matter, 3) data that shows why the book is considered one of the best (e.g. used in ivy league schools/bestseller/critically acclaimed/award winning/high review ratings, etc), 4) a note on which of the aforementioned topical areas are covered in the book.
Alternatively, we can continue building a reading list (like the one started in the Early Findings above). To do so we can build another list of 20-30 articles, blogs, reports, or papers published by investment experts (or credible investment media outlets) that address the following topics: best criteria for choosing stocks, how to research stocks, how to understand stock market trends, how to understand the trends of a specific stock, how to evaluate earnings calls/reports, how to determine if a stock is stable or volatile, and how to evaluate if a stock investment is good for short term or long term growth. For each article, we will provide the following information within a one-sentence statement: 1) a link to the article, 2) which of the aforementioned topics the article addresses, 3) the name of expert/author/publisher of the article, and 4) the year the article was published. For example: "A guide on how to measure stock volatility published by Investopedia in 2019 has been provided here." The list will not contain any of the articles already noted in the Early Findings section above.