Page 141 - DCOM507_STOCK_MARKET_OPERATIONS

Stock Market Operations Rupesh Roshan Singh, Lovely Professional University

Notes Unit 7: Fundamental Analysis 1: Economic Analysis

CONTENTS
Objectives

Introduction
7.1 Fundamental Analysis
7.1.1 Fundamental Analysis and Efficient Market
7.2 Economy - Industry - Company Analysis: A Framework

7.2.1 Economy Analysis
7.2.2 Investment-making Process
7.2.3 Economic Forecasting
7.2.4 Barometric or Indian Approach

7.2.5 Money and Stock Prices
7.2.6 Diffusion Index
7.2.7 Geometric Model Building Approach
7.2.8 Economy and Industry Analysis

7.3 Summary
7.4 Keywords
7.5 Review Questions
7.6 Further Readings

Objectives

After studying this unit, you will be able to:
Explain the concept of fundamental analysis
Discuss the economy - industry - company Analysis: A framework
Elaborate the economic and industry analysis
Introduction

Investment decisions are a part of our economic life. Everybody makes such decisions in different
contexts at different times. Some are able to reap more profits through them; while others
simply lose their money. Attempts should, therefore, be made to understand and know the way
sound investments decision can be made in order to improve the change of making profit
through them. Thus, investment decision-making is an important area probing further.
Unfortunately, for long, investment decision-making was regarded only as an act. As an art it is
personal subjective, it was difficult to provide a general framework with in one could operate.
Only, recently it was considered as science with the result that a body of literature has been
developed that help us to understand the way investment decisions can be attempted.
Recognizing its art content, this body of literature works on the thinking that a general system
framework can be suggested for those involved in investment decisions, who can then modify
it according to their requirements. It has, therefore, been recognized that investment

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