00:00Stock market fundamentals refer to the measurable financial and economic data used to determine
00:05a company's or market's intrinsic value, distinct from price-chart-based technical analysis.
00:11At the company level, the core metrics are 1. Earnings per share, EPS, net profit divided
00:17by outstanding shares, which drives most valuation models. 2. Price-to-earnings ratio, P.E.
00:24Comparing share price to EPS, historically the S&P 500 has averaged AP, E around 15-20x,
00:33though this varies widely by sector and era. 3. Revenue growth, showing whether the business
00:39is expanding, typically assessed year-over-year. 4. Debt-to-equity ratio, indicating leverage risk,
00:46lower is generally safer but not universally better, since some sectors like utilities carry
00:52structurally higher debt. 5. Free cash flow, cash generated after capital expenditures,
00:58often considered harder to manipulate than earnings. At the macro level, fundamentals include GDP growth,
01:05inflation rates, central banks like the Fed typically target around 2%, interest rate policy,
01:11and unemployment figures, all of which affect corporate borrowing costs and consumer spending.
01:16The relevant metrics shift by context. Growth investors prioritize revenue trajectory
01:22and total addressable market. Value investors focus on P, E, and book value, while short-term
01:28traders weight fundamentals less than technical signals. Sector matters too. P.E. norms for tech
01:35companies differ substantially from those for banks or industrials. I can't provide real-time current
01:40values for these ratios since they fluctuate constantly and I don't have live market access.
01:45Any specific number you use should be pulled from a current data source rather than assumed
01:50static. Practically, before investing, check a company's EPS trend over 3-5 years, compare its P, E to
01:58sector peers rather than in isolation, and track macro indicators like interest rates since they
02:03influence valuations market-wide, not just individual stocks. Finally, remember that everything we
02:09discussed today is for educational purposes only and does not constitute financial advice.
02:14Good luck to everyone, and see you in the next video.
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