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Chapter 3. The Basics of Fundamental Analysis > Common Sense and Being Alert

Common Sense and Being Alert

Some Examples

  • Do you ever notice that a particular retailer’s trucks are prolific on the roads, suggesting that the masses are ordering goods from them?

  • Have you noticed a new product in everyone’s homes? Like those massive digital clocks with temperature gauges and thermometers? Who makes those? Look on the back, find out who makes them, and then find out if the company is listed on the stock market or whether it is a subsidiary of another company which is listed on the stock market.

  • What toys are in vogue with your kids? What are the latest crazes? Who makes those toys? Who has the marketing and distribution rights on those toys?

The common sense approach is one endorsed by the greatest investors such as Warren Buffett and Peter Lynch. Nowadays there’s no excuse for not being able to find things out. The Internet has enabled each of us to become a modern day Sherlock Holmes when it comes to tracking down information. Research isn’t half the pain it was only five years ago; you can simply plug in any criteria to a search engine and sure enough, a whole collection of answers will pop out in seconds.


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