Sunday, 11 May 2008

Motley Fool and stock market investments

I am studying how to invest on stock exchange. I began my journey by reading a book Motley Fool -> Online Guide to Investing.

Having read that I am reading now

This book is supposed to teach me how to evaluate financial position of the company. Learn how to interpret various metrics for quantative analysis and teach some obvious things happening on stock exchange. I have read half of the book and so far I must say half of it was childish but the other half is pretty decent and dives into what I was expecting to find in this book. Currently I am reading a chapter on analysis of financial statements of companies, which ought to be published every year. I must admit that some metrics might be misleading, for instance if company has got lots of Accounts Receiveable you would think it is good. That means that many other companies or people own money to company but company needs to collect that money. If that value increases and the current assets (cash) does not increase -> that means that company has problems collecting its debt and it is considered to be bad debt. There are many more metrics to analyse and I am really just scratching the surface.

Have you ever traded on stock exchange? Do you have any useful tips?

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