How does an analyst actually analyze a share? As an amateur can you do the same?

Not every analyst or investor has the same methodology to analyze a share and invest. You have to choose what suits you and stick to that for long periods of time. However, these are some of the broad things that you must do. There are 4 actions that you will see in the market – what people do to earn money. Broadly you can decide into which category you fit in..and make it work

1. Fundamental : Decision making based on analysis of the company’s financial information. It also involves the qualitative analysis of its business, competition, status, and economic environment. Involves reading and understanding the quantitative details, market share, company’s ability to attract talent and stuff like that. Most big investors use this.

2. Technical : Using stock charts, chart patterns to decide which share to buy, and learning about the Price – Volume relationship and the high quality trading decisions.

3. Statistical: Developing models derived from a database of multiple variables.

4. Arbitrage: The simultaneous purchase and sale of a security, securities or derivatives in order to extract a low-risk profit.