Easiest sectors to learn FA?
Analysts often use key operating metrics that are unique to a sector, such as RPM - Revenue Pasenger Miles - for airline stocks, net interest margin for banks, etc. These are easy enough to get acquainted with.
Then there are the people who just use discounted cash flows for everything, or maybe price/stated book value (what I've been accused of doing ( - _-.) So with that, that aspect of presumed FA would allow any sector to be chosen and looked at, if these are the predominant or only factors of FA being used.
It seems to me that if a person is doing deep fundamental research, SWOT (strength,weakness, opportunity, threats) including digging deep into the financials of the company or sector, one might consider choosing a sector or sectors first where the accounting is easier to understand than sectors which seem (to me) to have their own arcane accounting methods -- such as with banks, insurance companies (especially), maybe retail (with off-balance sheet commitments), shipping, and so on. (OTOH, maybe garnering knowledge in these sectors is where the opportunity is, because so many analysts fail to adequately understand the accounting here.)
I might start with something that "seems" straightforward like distributor stocks. Or maybe something in the raw material sector. |
