What are 'business fundamentals'?
From http://financial-dictionary.thefreedictionary.com/Business+Fundamentals The facts that affect a company's   underlying value. Examples of business   fundamentals include debt, cash flow,   supply of and demand for the company's   products, and so forth. For instance,   if a company does not have a   sufficient supply of products, it will   fail. Likewise, demand for the product   must remain at a certain level in   order for it to be successful. Strong   business fundamentals are considered   essential for long-term success and   stability. See also: Value Investing,   Fundamental Analysis. For a stock the basic fundamentals are the second column of numbers you see on the google finance summary page,  P/E ratio, div/yeild, EPS, shares, beta.   For the company itself it's generally the stuff on the 'financials' link  (e.g. things in the quarterly and annual report,  debt, liabilities, assets, earnings, profit etc.
"As other people have posted starting with ""fictional money"" is the best way to test a strategy, learn about the platform you are using, etc. That being said I would about how Fundamental Analysis works . Fundamental Analysis is the very basis of learning about an assets true value is priced. However in my humble opinion, I personally just stick with Index funds. In layman's terms Index Funds are essentially computer programs that buy or sell the underlying assets based on the Index they are associated with in the portion of the underlying index. Therefore you will usually be doing as good or as bad as the market. I personally have the background, education, and skillsets to build very complex models to do fundamental analysis but even I invest primarily in index funds because a well made and well researched stock model could take 8 hours or more and Modern Portfolio Theory would suggest that most investors will inevitably have a regression to the mean and have gains equal to the market rate or return over time. Which is what an index fund already does but without the hours of work and transaction cost." "Your comment is more related to economics rather than finance. You're right that with conventional, everyday goods that ""value"" is an entirely subjective thing. Economists formalize this idea with the notion that people's preferences determine market prices.  In finance, though, ""fundamental value"" relates to the value of the cash-flows produced by a financial asset. In Marxian terms, we're talking about exchange value - what can I get if I take this bond/stock and sell it. The value I get should be equivalent to the monetary value of the cashflows produced by that asset over time, discounting for uncertainty, etc. So, ""fundamental value"" is a bit more objective in finance since these things produce something quasi-objective - cash." Triple Bottom Line places a special focus on preserving a wide technical skill set, while retaining an exceptional level of technical expertise, which enables the company to fulfill its mission. Triple Bottom Line offers our clients a broad spectrum of mobile application development services. We have team of dedicated developers specializing in Android  , iPhone, Symbian, iPad, tablets, Blackberry, JQuery, Titanium, C+, Javascript, html5, Facebook Apps, Twitter Apps, Palm, Android TV apps, Apple's iTV, and Web design and development. We can also put your app in the Barnes and Nobles' Nook, Amazon's and other bookstore's Kindle, AT&amp;T's U-verse TV with our approved developer accounts. We are specialists in various API and SDK integration including AT&amp;T, Facebook, Twitter, Amazon, Paypal, among many more. Our services create affordable development for corporate clients and development firms. We provide solutions at an affordable price with superior quality. Contact us for a quote to see how affordable it will be to complete your mobile application needs with alacrity. Visit our website @ http://tbldevelopmentfirm.com/ "Synergy is when a relationship makes its members stronger. ""Relationships"" doesn't cut it. Results and [ROI](http://www.investopedia.com/terms/r/returnoninvestment.asp) are very different. If a subordinate brings an insignificant problem to their manager, ""be realistic"" doesn't have quite the kick that ""deal with it"" does, IMO, but I'll give it to you. I'm not sure what you're getting at with ""Expectations? Goals?"", but managing expectations is conveyed in neither.  Your terms do not suffice, and your lack of understanding leads me to believe that you're either really junior or not in business at all." No. The information you are describing is technical data about a stock's market price and trading volume, only. There is nothing implied in that data about a company's financial fundamentals (earnings/profitability, outstanding shares, market capitalization, dividends, balance sheet assets and liabilities, etc.) All you can infer is positive or negative momentum in the trading of the stock. If you want to understand if a company is performing well, then you need fundamental data about the company such as you would get from a company's annual and quarterly reports. all of these examples are great if you actually believe in fundamentals, but who believes in fundamentals alone any more? Stock prices are driven by earnings, news, and public perception. For instance, a pharma company named Eyetech has their new macular degeneration drug approved by the FDA, and yet their stock price plummeted. Typically when a small pharma company gets a drug approved, it's off to the races. But, Genetech came out said their macular degeneration drug was going to be far more effective, and that they were well on track for approval. All you have to do is ask Warren Buffet that question and you'll have your answer! (grin)  He is the very definition of someone who relies on the fundamentals as a major part of his investment decisions. Investors who rely on analysis of fundamentals tend to be more long-term strategic planners than most other investors, who seem more focused on momentum-based thinking. There are some industries which have historically low P/E ratios, such as utilities, but I don't think that implies poor growth prospects.  How often does a utility go out of business?   I think oftentimes if you really look into the numbers, there are companies reporting higher earnings and earnings growth, but is that top-line growth, or is it the result of cost-cutting and other measures which artificially imply a healthy and growing company?  A healthy company is one which shows year-over-year organic growth in revenues and earnings from sales, not one which has to continually make new acquisitions or use accounting tricks to dress up the bottom line. Is it possible to do well by investing in companies with solid fundamentals?  Absolutely.  You may not realize the same rate of short-term returns as others who use momentum-based trading strategies, but over the long haul I'm willing to bet you'll see a better overall average return than they do. Google Portfolio does the job: https://www.google.com/finance/portfolio You can add transaction data, view fundamentals and much more. "Is english not your first language? I'm not trying to be rude i just want to understand if the difficulty in communicating with you comes from a language barrier or something else.  Finance and accounting knowledge are things people go to university for years for, just to learn the basics to get in the door. What you're asking requires years of experience and earned expertise.  The expectation that you can just post here with some questions and suddenly have enough of a grasp to become a decision maker with respect to these situations is borderline offensive to professionals like myself.  Either you need this knowledge for a practical application, or an academic pursuit. It seems to be the latter given your previous message. There are textbooks dedicated to what you're asking about, if you are really serious about learning then go pick them up and put in the hours necessary just like anyone else. Otherwise stop wasting peoples time on here.  If you have one or two small questions to help clarify something you've been self studying that's fine, but honestly coming on here and asking ""how can a company issue bonds and what are bonds is it like a mortgage"" is absolutely a waste of time and reeks of laziness on your part." "Spoken like a true non-business person.  I'm an engineer that now has an MBA. It's not ""fluff"", far from it. In fact, I'm doing more quantitative work now than I did as an engineer. I use MATLAB and Excel more than I ever did before. And I'm in marketing, one of the less quantitative MBA jobs." Not sure why people are suggesting CFP or CFA to someone who hasn't graduated with a BS yet.   With that said, CFA had a claritas (fundamentals course) with like 20-20 page chapters going over basic finance and investment info. Pretty sure you can still get those pdfs for free. Investopedia is also great for general concepts for banking and investments.   CFA is very expensive and I wouldn't touch it until you've taken general business classes and really built up your foundation. The technical skills (excel, matlab, econometrics) others posted are absolutely essential, but I have seen a ton of world class number crunchers who could not put anything in context.  My advice:  - Read any annual report for any company you find somewhat interesting, aim for reading 2 or 3 a week.  This is the best way to learn real world macro economics and get a very strong grasp on financial accounting  - Practice writing about what you learn. Basically you'd take all the companies in a given universe (like the S&amp;P 500 or the Russell 3000) and instead of weighting them by market cap as they are currently done, you would weight by an alternative measure.  Right now, if you're invested in an index that is market cap weighted, you're effectively momentum chasing. If a stock runs up, you're going to have a higher weight in your portfolio because of it (but only after the increase).  An alternative that OppenheimerFunds has come up with is using revenue-weighting. That way you're using company fundamentals and only when the fundamentals are improving do you increase the weight in your portfolio.  I haven't yet seen any research that explores weighting by other fundamentals. I would think that revenues aren't perfect either and that you might want to weight by Net Income. Or to go several steps further, by year over year Free Cash Flow growth.   It could be a seminal paper if you are the one who empirically identifies a better weighting methodology and then have everyone else fight over the theoretical underpinnings.  This is effectively what goes into Smart Beta investing: http://www.investopedia.com/terms/s/smart-beta.asp "Definition: Fundamental analysis involves analyzing financial statements and health, management and competitive advantages, and competitors and markets. Books are a great way to learn fundamental analysis but can be time consuming for something that really isn't very difficult. So the internet might be a better way to get started. When using fundamental analysis all you are doing is trying to figure out how much a company is worth. The vocabulary and huge range of acronyms can be intimidating but really its a fairly simple task. You can use (investopedia) for definitions and simple examples when you do not fully understand something. IE: (PEG) You can search for definitions using the search bar on the top right (google also is a good source to look for additional definitions). I recommend starting out by doing an independent analysis on a well known name such as Proctor & Gamble or Mcdonald's. Then you can compare your analysis to a professionals and see how they stack up. Books and Resources: Getting Started in Fundamental Analysis Fundamental Analysis For Dummies Fundamental analysis Wiki What Is Fundamental Analysis? - Video tut from Investopedia Fundamental Analysis: Introduction Step by Step example of fundamental analysis - It's a pretty in depth forum post. Side Notes: Personally when I first began using fundamental analysis I found it difficult to understand why something is considered undervalued or overvalued. I couldn't figure out who was the ""authority"" on saying this. Well in short the ""authority"" basically is the market. You can say you believe XYZ is undervalued but you are only proven correct if the market agrees with you over long period of time. Some key facts you should know: Many times a stock can be ""broken"" for many reasons. The price can go far beyond what would be considered a ""normal valuation"" (this is considered a bubble, e.g. the tech bubble of 1999-2000). It can also go far below a ""normal valuation"". In most cases these types of valuations are short lived and in the end a stock should return to ""normal valuation"" or at least this is the theory behind fundamental analysis." The thing about business is, it isn't engineering, medicine, or law. What value does inventing a whole other language add? When it's a shortcut, fine, but too often these phrases sprout up because MBAs want everyone to think they know something arcane and precious, and that's when cliches are a symptom of obfuscation, something engineers, doctors, and lawyers are certainly guilty of, albeit with more justification.