Fundamental and Technical Analysis: Rapid Fire
Chapters in this video
- 0:00 Fundamental versus technical: Carla and Sam
- 1:08 The intrinsic value buy-sell rule
- 2:03 Financial statements: photograph versus movie
- 4:00 Liquidity trap: why quick ratio drops inventory
- 5:17 Charts, contrarian sentiment, and index weighting
- 6:33 Bond Buyer 11, 40, 25: GO and revenue memory aid
- 7:19 Tender offers, unqualified opinions, and total cap
- 8:07 Rapid-fire summary deck
What this video covers
- How fundamental analysis calculates intrinsic value to flag undervalued buys and overvalued sells, and the difference between top-down and bottom-up approaches
- Why the balance sheet is a snapshot at a point in time while the income statement and cash flow statement cover a period, and that land is never depreciated
- How FIFO and LIFO inventory accounting distort earnings and taxes in rising-price environments, and why LIFO is barred under International Financial Reporting Standards (IFRS)
- The current ratio versus the quick ratio (acid test): why inventory is subtracted because it is the least liquid current asset
- What contrarian indicators (put/call ratio, VIX, short interest) signal when extreme fear is bullish and complacency is bearish
- Why the Dow Jones Industrial Average is price-weighted while the S&P 500, Nasdaq Composite, and Russell 2000 are market-cap-weighted, and how the Bond Buyer 11, 40, and 25 indexes split general obligation and revenue bonds
- Who may and may not trade on material nonpublic information during a tender offer, and the total capitalization formula (long-term debt plus preferred stock plus common equity)
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