(BQ) Part 2 book "Essentials of investments" has contents: Macroeconomic and industry analysis; macroeconomic and industry analysis; globalization and international investing; performance evaluation and active portfolio management; options markets; option valuation, equity valuation, financial statement analysis,.and other contents. | PART FOUR SECURITY ANALYSIS T ell your friends or relatives that you are studying investments and they will ask you, “What stocks should I buy?” This is the question at the heart of security analysis. How do analysts choose the stocks and other securities to hold in their portfolios? Security analysis requires a wide mix of skills. You need to be a decent economist with a good grasp of both macroeconomics and microeconomics, the former to help you form forecasts of the general direction of the market and the latter to help you assess the relative position of particular industries or firms. You need a good sense of demographic and social trends to help identify industries with bright prospects. You need to be a quick study of the ins and outs of particular industries to choose the firms that will succeed within each industry. You need a good accounting background to analyze the financial statements that firms provide to the public. You also need to have mastered corporate finance, since security analysis at its core is the ability to value a firm. In short, a good security analyst will be a generalist, with a grasp of the widest range of financial issues. This is where there is the biggest premium on “putting it all together.” The chapters in Part Four are an introduction to security analysis. We will provide you with a “top-down” approach to the subject, starting with an overview of international, macroeconomic, and industry issues, and only then progressing to the analysis of particular firms. These topics form the core of fundamental analysis. After reading these chapters, you will have a good sense of the various techniques used to analyze stocks and the stock market. CHAPTERS IN THIS PART 12 Macroeconomic and Industry Analysis 13 Equity Valuation 14 Financial Statement Analysis 369 8/17/07 5:33:04 PM CHAPTER 12 Macroeconomic and Industry Analysis AFTER .
