Join our investing community

Combining Fundamental Analysis and Value Investing?

Discussion in 'Investing Strategies' started by MoneyNotorious, 1st Jul, 2018.

  1. MoneyNotorious

    MoneyNotorious Member

    Joined:
    12th Mar, 2018
    Posts:
    16
    Location:
    SA
    Many have told me that fundamental analysis is a tool of value investing whilst others have said its two different things. I've always seen the two go very closley hand in hand as value investing principles tell us what it should be worth and fundamental analysis tells us how good that company is.

    My strategy thus far has been to utilise both. I apply the principles of value investing (such as financial ratios, intrinsic values through DCF etc...) and combine to the principles of fundamental analysis (analyising the company's products, management, financial trends, industry position etc..)

    From this, If the company looks to be trading below what I think its actually worth and the fundamentals of that company checks out, I make my intelligent decisions on whether to buy or pass.

    Am I wrong? Is there flaw in this logic?
    Is there a major difference between the two and should it be approached separately?
     
    twisted strategies likes this.
  2. twisted strategies

    twisted strategies Well-Known Member

    Joined:
    3rd Nov, 2013
    Posts:
    843
    Location:
    QLD
    does the combination give you any stocks to research further ??

    if so what sort of stocks

    (examples only )

    say RFG or SGH might suggest the experiment has a flaw

    if something like BXB or SGP maybe you are close to achieving your goal

    please remember some ratios do NOT apply to certain sectors , for example REITs don't give a debt to equity ratio they call it leverage or gearing ( and calculated differently )

    give your theory a try , you might have created something new ( or will do if you tweak it correctly )
     
    MoneyNotorious likes this.
  3. twisted strategies

    twisted strategies Well-Known Member

    Joined:
    3rd Nov, 2013
    Posts:
    843
    Location:
    QLD