Thursday, February 22, 2007

Harry Domash's Fire Your Stock Analyst - Analyzing Stocks On Your Own - Book Review

Fire Your Stock Analyst: Analyzing Stocks On Your Own

What Is It About?

This book is about learning how to analyze stocks on your own. Over the course of several chapters the author explains how to get started analyzing stocks, what tools to use, and how to implement the acquired tools. The book covers stock analysis from both a “value” and “growth” point of view and also mixes a variety of fundamental and technical techniques to demonstrate how to analyze stocks.

What Did I Get Out Of It As A New Investor?

This is a good book for a new investor. After spending some time learning about how to think about the stock market, eventually one must figure out a way to participate in the market. This book helps nudge the new investor in that direction.

By covering such topics as valuation, industry analysis, management quality, and price charts, the book covers most major topics in stock evaluation. The book also walks one through financial statement analysis, analyst analysis, and how to look for accounting red flags. Additionally, the book touches on price charts discussing moving averages, volume trading, and trend identification. Overall, this book provides a comprehensive review of every major approach to the stock market.

Most importantly the book ends with two sections which lay out possible approaches to investing from a “value” point of view (that is finding companies priced less than their fair value) or the “growth” point of view (finding companies whose value is mis-priced based on their growth). The author does this by walking the reader through an eleven step analysis for each category, applying what the reading learned from the first two sections of the book to demonstrate how the acquired tools are used in practice.

The Good News

A solid effort to help a new investor learn tools and techniques to put into practice the theory one has learned.

The Bad News

I would classify this has a intermediate text meant for those new investors who have gain some familiarity with general approaches to investing and who are ready to learn more practical techniques.

The Bottom Line

A good book for those looking to apply what they have learned from reading more introductory texts.

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Excellent book for new stock investors.