Support our online development, and advance our onground research initiatives in free market economics, as we seek to showcase the brightest Next-Gen minds.
THE ME-P DISCLAIMER: Posts, comments and opinions do not necessarily represent iMBA, Inc., but become our property after submission. Copyright © 2006 to-date. iMBA, Inc allows colleges, universities, medical and financial professionals and related clinics, hospitals and non-profit healthcare organizations to distribute our proprietary essays, photos, videos, audios and other documents; etc. However, please review copyright and usage information for each individual asset before submission to us, and/or placement on your publication or web site. Attestation references, citations and/or back-links are required. All other assets are property of the individual copyright holder.
A BRIEF REVIEW FOR PHYSICIAN INVESTORS
By Dr. David Edward Marcinko MBA CMP™
SPONSOR: http://www.CertifiedMedicalPlanner.org
QUESTION: We are in near bear market correction territory – especially for tech stocks – so what are the 2 major types of valuation approaches for common stock?
ANSWER: There are basically two different approaches for common stock valuation; top-down and bottom-up. Under either of the two fundamental approaches, a physician investor will have to work with individual company data. In reality, each of these approaches is used by investors and security analysts when doing fundamental analysis.
CITE: https://www.r2library.com/Resource/Title/082610254
With the bottom-up approach, investors focus directly on a company’s prospects. Analysis of such information as the company’s products, its competitive position, and its financial status leads to an estimate of the company’s earnings potential, and, ultimately, its value in the market. Considerable time and effort are required to produce the type of detailed financial analysis needed to understand a firm’s standing. The emphasis in this approach is on finding companies with good long-term growth prospects, and making accurate earnings estimates.
The top-down approach is the opposite of the bottom-up approach. Investors begin with the economy and the overall market, considering such important factors as interest rates and inflation. They next consider likely industry prospects, or sectors of the economy that are likely to do particularly well (or particularly poorly). Finally, having decided that factors are favorable for investing, and having determined which parts of the overall economy are likely to perform well, individual companies are analyzed.
***
COMMENTS APPRECIATED.
Thank You
Subscribe to the Medical Executive-Post
***
***
***
Share this:
Filed under: "Ask-an-Advisor", CMP Program, Glossary Terms, Investing, Touring with Marcinko | Tagged: bear market, bottom-up, CMP, CMP Program, Investing, top-down |
The Leading Business Education Network for Doctors, Financial Advisors and Health Industry Consultants 
hi
LikeLiked by 1 person