Starting the Analysis Starting the Analysis ( )
. SEC..
The Security Analysis Process 20
TOP-DOWN( ) BOTTOM-UP( )
TOP-DOWN 1. : 2. : 3. : -- 4. :
1. 2.
Buy-side. Sell-side
Research Report 1. (Introduction) 2. 3. 4.
Research Report 5.
Research Report 6. 7. ( ) 8.
--Introduction : : ( (cash cow) ) 3 5
: : ) ( 20%) (sell)
Model Research Report
!
* :
* : 1.? 2.?
2000 25 30 40% 1999 55% 59%
The Analyst Responsibility ( ) top-down analysis 1. macroeconomic prospects 2. capital markets 3. industry outlook 4. company-specific evaluation
(Market timer)!
EX (GNP)
?!
The Cascade of Projections.Topdown. US GNP 1% 1.5% GNP 3% 4.5%
Selecting Stocks for Study Top-Down Versus Bottoms-up Top-down ( 10% 5%) Bottoms-up
bottoms-up 1 2 3 / 2.0 50 Peter Lynch bottomsup
P/E P/E bottoms-up
Limited Time and Resources
The Margin of Safety
Graham Dodd
15% 30 35 35/30=117% 15% 120 85 90
intrinsic value relative value acquisition value leveraged buyout value liquidation value
Economic and financial Projections the margin of safety