Synopses & Reviews
In Fire Your Stock Analyst!, San Francisco Chronicle investment columnist Harry Domash presents a start-to-finish approach to stock selection that draws on winning techniques from the world's top money managers, uses readily available information, and is easy to implement. Learn how to select stocks based on value, growth, and momentum strategies; assess valuation, profitability, risk, business plans, management, and upside/downside potential; decide when to sell; and much more. You'll find everything you need to become a more successful - and self-reliant - investor!
Synopsis
Pick your own stocks--and outperform the experts! "San Francisco Chronicle" investment columnist Harry Domash has crafted a start-to-finish approach to stock selection that draws on winning techniques from the world's best money managers, uses readily available information, and is easy to learn if you're willing to invest the time. Whether you're a growth or value style investor, this book will show you exactly how to identify the best stocks for your portfolio. You'll learn to assess everything that affects a company's stock price--profitability, underlying financial strength, competitive position, industry, business plans, management competence, upside/downside potential, and more. Like no other book, "Fire Your Stock Analyst!" cuts to the chase, capturing the essence of today's most successful stock-picking strategies. It's all you need to liberate yourself from the "experts" and become a more successful investor.
You'll find
- Disciplined, step-by-step strategies for every intelligent investor
- No "get-rich-quick" formulas; just practical techniques you can really use
- Separate selection strategies for value and growth investors
- Assessing valuation, risk, profitability, management competence, and long-term growth potential
- Using the analysts' recommendations for your benefit--not theirs
- Crucial issues most investment books ignore--including when to sell
Consistently picking winning stocks isn't magic--you can do it. It simply takes knowledge, skills, and discipline. If you've already got the discipline, this book will give you the knowledge and the skills."This is a thoughtful book that will stir the imagination andwhet the appetite of anyone considering investing in stocks. It will serve as a foundation for lifelong education in how to improve your wealth and your understanding of financial statements." --Victor Niederhoffer
Chief Speculator, Manchester Investments,
and author of the bestselling "Education of a Speculator""Just finished reading Fire Your Stock Analyst! and I must say I'm delighted--it's sensible, balances risks with rewards, has a lot of real-world practical examples carefully worked out, and a lot of tangible parameters (e.g. the "Quick-Hype Checks"). This is the book I wish I had time to write." --David Edwards
President, Heron Capital Management, Inc. "Fire Your Stock Analyst! grabbed my attention early and held it to the very end. This is a good book if you are interested in being your own stock guru or just getting started in common stock investment analysis." --Nicholas D. Gerber
Portfolio Manager, Ameristock Funds "A refreshing antidote to run-of-the-mill investing 'how tos.' In Fire Your Stock Analyst!, Harry Domash combines the wisdom of many of the nation's top money managers with his own earthly style of stock picking. The net result is an insightful and useful treatise on investing that works for both growth and value plays." --Charles Mulford
Invesco Chair and Professor of Accounting, Georgia Institute of Technology,
and co-author of "The Financial Numbers Game: Detecting Creative Accounting Practices" "Fire Your Stock Analyst! is a must-read for novice and expert investors alike, offering honest and up-to-the minute advice on topics such as accounting fraud, and guidance on the investment-research process. Harry Domash offers up a greatcombination of textbook knowledge backed by real-world examples." --Richard H. Driehaus
Driehaus Capital Management, Inc. "Fire Your Stock Analyst! provides well thought out, sensible, step-by-step strategies for analyzing stocks, including when to sell. These analytical methods, used by pros though rarely explained to individual investors, will help you improve your results in the market right away."--Jon D. Markman
Managing Editor, CNBC on MSN Money
About the Author
HARRY DOMASH publishes Winning Investing, a monthly stock and mutual fund advisory newsletter. He also teaches stock and mutual-fund analysis classes, is a frequent speaker at the American Association of Individual Investors' meetings, and conducts fundamental analysis workshops. Domash's investing tutorial column appears in the San Francisco Chronicle and the Santa Cruz Sentinel. His fundamental analysis columns have appeared in Business 2.0 magazine. He is the author of The Everything Online Investing Book: How to Use the Internet to Analyze Stocks and Mutual Funds. He runs the www.winninginvesting.com
site for personal investors.
Table of Contents
Introduction. Acknowledgments.
I. GETTING STARTED.
The Analysis Process.
Finding Candidates. Analyzing Stocks. Quick Prequalify. Detailed Analysis. When to Sell. Summary.
Evaluating Risk.
Market Valuation. Market Direction. Spotting Strong Industries in a Weak Market. Company-Specific Risks. Company-Specific Risks Described in Subsequent Chapters. Summary.
Screening.
Quicken Growth Screen. Quicken Value Screen. “MSN Money” Down and Out Value Stock Finder. Multex Investor Bulletproof Stocks. The Zen of Screening. Premade Screens. Summary.
II. ANALYSIS TOOLS.
Analysis Tool #1: Analyzing Analysts' Data.
Who Are the Analysts? Analysts' Ratings. “Sell” Is a Four-Letter Word. Consensus Ratings. Do Strong Buys Outperform Sells? Number of Analysts. Sentiment Index. Analysts' Estimates. Forecast EPS Trend. Earnings Surprise. Sales Forecasts. Regulation FD. Research Reports. Summary.
Analysis Tool #2: Valuation.
Implied Growth. Growth at a Reasonable Price. Dividends. Summary.
Analysis Tool #3: Establishing Target Prices.
The Process. Cisco Systems. Summary. The Business.
Analysis Tool #4: Industry Analysis.
Industry Growth Outlook. Industry Concentration. Picking Winners in an Emerging Fragmented Industry. Industry Scuttlebutt. Summary.
Analysis Tool #5: Business Plan Analysis.
Introduction. Overblown Competitive Advantages. Business Plan Score Scorecard. Summary. Key Executive and Board Quality.
Analysis Tool # 6: Management Quality.
Clean Accounting. Earnings Growth Stability. Stock Ownership. Summary. Financial Fitness Counts.
Analysis Tool #7: Financial Fitness Evaluator.
Pinpointing Financially Challenged Companies. Simplify the Problem. Low Debt. Detecting Potential Busted Cash Burners. Detailed Fiscal Fitness Exam. Bond Ratings. Use Bond Risk Premiums to Identify Risky Debtors. Summary.
Analysis Tool #8: Profitability Analysis.
Where Do Earnings Come From? Analyzing Sales (Revenue) History. Analyzing Margins. Gross Margin. Operating Margin. Net Profit Margin. Comparing Margins. Gross Margins. Operating Margins. Analyzing Margins. High vs. Low Margins. Analyzing Overhead Expenses. Profitability Ratios. Return on Equity. Return on Capital. Return on Assets. Marginal Return on Assets. Cash Flow Analysis. Working Capital Changes. Cash Tells the Story. Dubious Allocations. Using Operating Cash Flow. Free Cash Flow. Quarterly Cash Flow Reports. EBITDA vs. Operating Cash Flow. Free EBITDA. Summary.
Analysis Tool #9: Detecting Red Flags.
Sales Growth Trends. Accounts Receivables and Inventories. Inventory Analysis. Statement of Cash Flows. Pension Plan Income. Yellow Flags. Summary.
Institutional Ownership.
Institutional Percentage of Shares Outstanding. Step 10: Ownership Considerations. Insider Ownership. Float. Insider Holdings. Summary.
Trends.
Tool # 11: Price Charts. Moving Averages. Avoid Downtrends. The Risk Zone. Chart Types. Trading Volume. Summary.
III. THE ANALYSIS PROCESS.
Quick Prequalify.
Company Overview. Snapshot Report. Valuation Ratios. Highlights Report. Ratio Comparison. Check the Buzz. Summary.
Value Investing: The Process.
Cycles. Normalizing. Value Analysis Process. Step 1: Analysts' Ratings and Forecasts. Step 2: Valuation. Step 3: Target Price Ranges. Step 4: Industry Analysis. Step 5: Business Plan Analysis. Step 6: Management Quality. Step 7: Financial Health. Step 8: Profitability Analysis. Step 9: Red Flags. Step 10: Ownership. Step 11: Charts. When to Sell. Summary.
Growth Investing: The Process.
Growth Candidates. The Process. Step 1: Analysts' Ratings and Forecasts. Step 2: Valuation. Step 3: Target Prices. Step 4: Industry Analysis. Step 5: Business Plan Analysis. Step 6: Management Quality. Step 7: Financial Health. Step 8: Profitability. Step 9: Red Flags. Step 10: Ownership. Step 11: Price Chart. Summary.
When to Sell.
Summary.
IV. MORE TOOLS.
Earnings Reports and Conference Calls.
Reported Earnings. Summary.
Detecting Scams, Frauds, and Pump and Dump.
Opportunity Knocks. Shoestring Operation. Hyping Pays Well. Quick Hype Checks. Summary.
How to Read Financial Statements.
Income Statement. Balance Sheet. Statement of Cash Flows. Finding the Data. Pro Forma Accounting vs. GAAP. Analysis Scorecards. Value Stock Analysis Scorecard. Summary.
Growth Stock Analysis Scorecard.
Summary.
Glossary.
Index.