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Investing v/s Trading

May 25, 2011
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1102979_32644255A lot has been happening at Pristine lately. We are currently working on releasing a new course on stock markets Although many people here at Pristine have known the theory all along, but when we were putting together the content for this course we realized that there are two different philosophies operating when it comes to stock markets.

One school of thought says that each stock has a particular value. If I can evaluate it properly, then I know whether the stock is overpriced – in which case sooner or later its going to come down, or undersold – in which case its bound to go up. Based on this, I choose to buy or sell stocks. In fact this is the technique which we employ for our Financial Modeling courses. Our last model on LinkedIn for example was a spot-on example of how accurate our valuation was.

We predicted that the share would be priced between 32 USD and 35 USD. The LinkedIn model was then featured on the popular Financial Modeling blog – fimodo.

The other school of thought does not bother to get into the intricacies of how the stock is valued internally. It worries about how the stock is valued externally, wrt to the market. It looks at how it is performing in the past, and how it behaves over a period of time. This is the technical analysis part wherein, the stock is analyzed for a certain set of patterns, and the trader takes certain calls about how the stock is going to perform in the near future.

The current course that we are building aims to clarify the differences between the two and give more actionable tips for both these types of investors.

We are conducting a free webinar next month on the same topic, grab your seat!


About the Author

Trusted by Fortune 500 Companies and 10,000 Students from 40+ countries across the globe, it is one of the leading International Training providers for Finance Certifications like FRM®, CFA®, PRM®, Business Analytics, HR Analytics, Financial Modeling, and Operational Risk Modeling. EduPristine has conducted more than 500,000 man-hours of quality training in finance.


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