Advanced fundamental analysis training
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amir
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Introduction:
Fundamental analysis is a type of market analysis that is used to evaluate the real value of an asset or company. Investors and traders can use this type of analysis in any market, including the forex market, and with its help, make informed decisions about their investments. Fundamental analysis is divided into two parts: preliminary and advanced. We have dedicated this article to the concepts that we learn in the advanced fundamental analysis training course.
Advanced fundamental analysis explores complex concepts and techniques that go beyond basic fundamental analysis. Therefore, if you are a beginner, you should first complete the introductory course and then apply for the advanced course training.
Concepts related to teaching advanced fundamental analysis
Advanced fundamental analysis provides investors and analysts with advanced tools for in-depth evaluation of companies, assets, industries and markets. Some of the most important ones are:
1. Valuation modeling
Mastery of more complex and detailed valuation models is critical in advanced fundamental analysis. This skill includes discounted cash flow (DCF) analysis, which is not taught in the introductory course. Discounted cash flow provides a valuation based on a forecast of future cash flows and can be used to estimate a company’s intrinsic value or the value of an investment. In addition, the advanced course includes learning relative valuation techniques.
2. Analysis of financial statements
While basic fundamental analysis only deals with the superficial interpretation of financial statements, advanced fundamental analysis requires a deep understanding of financial reporting methods and the ability to detect possible warnings (red flags) or deficiencies in the company’s accounting affairs. You must learn how to comprehensively analyze financial statements to obtain an accurate assessment of a company’s financial condition, profitability, liquidity, and operating efficiency. This includes trend analysis, ratio analysis and cash flow analysis.
3. Competitive advantage analysis
Another important skill in advanced fundamental analysis training is evaluating a company’s competitive advantages. You must learn how to identify and analyze sources of competitive advantage, including economies of scale, network effect, brand awareness, and intellectual property. Additionally, understanding industry dynamics, barriers to entry, and competitive positioning is essential to assessing a company’s long-term prospects and sustainability.
4. Evaluation of corporate governance and management
In the course of preliminary fundamental analysis, there is no need to evaluate a company’s management method in detail; But professional analysts must have the skill to check the quality of the company’s management team and its governance. For this, it is important to evaluate components such as executive compensation, board composition, shareholder rights, and transparency in financial reporting. Understanding the impact of corporate governance on a company’s long-term performance is critical to making informed investment decisions.
5. Forensic analysis and fraud detection
Advanced fundamental analysts must be familiar with forensic or criminological analysis skills and be able to detect and identify cases of fraud, manipulation or deficiencies in the company’s financial and accounting affairs. Techniques such as the Beneish M-Score, off-balance sheet analysis, and the review of red flags in financial statements and management documents can help.
6. Geopolitical and macroeconomic analysis
Advanced fundamental analysis goes beyond simple corporate analysis and requires a deeper understanding of the macroeconomic and geopolitical factors that influence industries and markets. A professional fundamental analyst must be skilled in analyzing macroeconomic indicators, global business dynamics, regulatory environments (various regulatory bodies in any field; for example, the Securities and Exchange Commission), and political risks that may affect a company’s performance. to have
7. Evaluation of environmental, social and corporate governance index
The environmental, social, and corporate governance index (ESG) is a measure that shows the level of activity of a company in the aforementioned social goals. With the increasing importance of ESG factors in investment decisions, advanced fundamental analysis should include the evaluation of a company’s environmental, social responsibilities, and corporate governance practices. For example, by examining this index, one can find out how much the company participates in environmental sustainability measures, what is its approach to the working community, whether it is socially responsible or not, and whether it uses risk management strategies. .
Differences between advanced fundamental analysis and introductory fundamental analysis
Some of the differences between advanced fundamental analysis and basic fundamental analysis are:
1. Depth of analysis
In the advanced fundamental analysis training course, we deal with deeper analysis and we must have a complete understanding of the fundamentals of fundamental analysis. In the advanced course, we explore more complex aspects of financial analysis and learn methods of forensic analysis and corporate governance assessment. Meanwhile, in preliminary fundamental analysis, it is sufficient to understand the fundamental factors influencing the asset value and basic concepts such as financial statements, ratios and industry analysis.
2. Scope of concepts
In the introductory course, the basic principles and basic evaluation methods are emphasized; While in advanced fundamental analysis, company analysis, competitive advantage evaluation and in-depth analysis of financial statements are required. Therefore, we are facing a wide range of concepts.
3. Valuation techniques
In teaching basic fundamental analysis, it is enough to know simple evaluation methods such as P/E ratio and book value, and less emphasis is placed on complex models; But advanced fundamental analysis requires skill in using complex valuation techniques such as DCF (discounted cash flow) models. In addition, learning to examine growth rates, risk factors, and long-term forecasts is essential.
4. Risk Assessment
The next difference between introductory and advanced fundamental analysis courses is risk assessment. In the introductory course, there is only a passing reference to risk factors and may not deal with specific methodologies. In advanced fundamental analysis, this is not the case, and you must be able to thoroughly examine the risks associated with investments, industry-specific risks, management quality, and geopolitical factors.
5. Application
Introductory fundamental analysis is suitable for retail investors and beginners who can use it to make informed investment decisions. But advanced fundamental analysis is useful for professional analysts, portfolio managers, and institutional investors, and they use it for accurate asset or company selection, analysis, and strategic investment decisions.
6. period
Introductory fundamental analysis works better for the medium term; Therefore, advanced fundamental analysis is more suitable for long-term perspectives.
final word
In this article, we talked about advanced fundamental analysis and the concepts you need to master it. Don’t forget that both introductory and advanced courses have their place in investment analysis. If you are a beginner, it is better to start with the fundamentals of fundamental analysis first; Because the advanced course concepts are more complex and may discourage you from further learning. After you’ve mastered the introductory course, take the advanced fundamental analysis course to become a professional fundamental analyst.
