Fundamental and Technical Analysis

Summary

This chapter focuses on investing, so fundamental analysis is the primary approach we should consider. It covers both fundamental and technical analysis along with the AI. Fundamental analysis looks at the underlying company instead of the stock. It focuses on the company's income and expenses (the income statement), its assets and debt (the balance sheet), cash flow considerations, and market conditions (such as the company's competitors, industry, market share, and so on). The chapter also covers key fundamental factors: Profitability; Solvency; and Multi‐year consistency. Technical analysis is more useful for the short term, and it's focused on timing: when to get in and when to get out. The relative strength index is a technical analysis metric that helps us figure out whether a particular stock (or other tradeable asset or vehicle) is overbought or oversold.