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01.an Introduction To Security Valuation I PDF
01.an Introduction To Security Valuation I PDF
Security Valuation
Course Outline
Industry Influences
Identify global industries that will prosper or suffer in the long run or during the
expected near-term economic environment
Business cycle and industry sectors: Different industries react to economic
changes at different points in the business cycle
Structural economic changes: Demographics, lifestyles, technology, and
international exposure will have different impacts on different types of
industries
Industry life cycle: Development of an industry divided into stages
Analysis of industry competitive environment: strategic analysis
Three Step Valuation Process
Company Analysis
Purpose: to identify the best companies in a promising industry
Involves examining a firms past performance, but more important, its future
prospects
Needs to compare the estimated intrinsic value to the prevailing market price of
the firms stock and decide whether its stock is a good investment
Final goal: to select the best stock within a desirable industry and include it in
your portfolio based on its relationship (correlation) with all other assets in your
portfolio
Does the Three Step Process Work?