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Economics/Economic analysis for share market

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Question
I am in the process of buying shares. What type of Economic analysis you would recommend to me ?

Answer
Welcome to "allexperts" forum and thank you for selecting me to answer your question.

Share is a high risk money making business. Hence a proper analysis of the economic factors contributing to the progress or down fall of companies are important.

Investors purchase stocks (Shares and securities) of public corporate organizations with the objective of making profit and growth.  But the economic factors in a nation can be favourable or destructive to the continued performance and profitability of organizations.

1)Population :  
The favourable factors of population are (a) Increase in population supplies more labour force (b) More population creates more demand for various commodities and services. Hence the investors should find and invest in securities of companies, which will benefit by these favourable factors. The unfavourable factors of population are (a) The consumption of essential or survival items increase. This will create shortage of supply and price increase (b) Political forces can divert the thinking of the population and lead to strikes and industrial unrest (c) The type of population in a region may not be useful for the skill needs (d) Capital intensive industries (like refineries with automated process) may not need more labour. So population growth do not contribute much for their operations and profitability.  
So, the investors should analyse these impact of population growth based economic factors on the company in stock market, and accordingly invest.

2)Research and Development :
The research and development (R&D)activity in a nation (both government and private) affects the growth and profitability of every company. Companies benefiting by the priority R&D are attractive for investment. (Ex : Communication, Construction/infrastructure, computer/internet etc..).

3)Capital formation :   
The country’s Gross National Product (GNP) is the total productive contribution of all industries. Identify the companies contributing more to GNP, their location, property value (fixed assets), credibility, corporate image  etc..  and invest in their stocks. How a company invest their funds in fixed assets and use of these assets is an economic factor to be evaluated for investment.

4)Resources :
Material resources contribute to the economic development of a nation. The quantity and quality of natural resources used by a company is to be analysed. The availability of resources decides the growth and profitability. Similarly, the raw materials used by a company and their continued availability has an impact on the company’s survival (Ex : Crude oil in case of oil industries, iron/steel  in case of machinery and automobile industries).

The above analysis shows the trend of organisational progress, profit orientation and declaration of dividend. This increases the return on share investment. Also the share value growth provides the dimension of capital appreciation. Based on economic analysis, the "bullish" shares, which exhibit an increasing trend in market price should be selected.

With regards.
drvsrs
Book store : http://drvsrs.com/store/page1.html
Web : www.drvsrs.com  

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Dr.VSR.Subramaniam

Expertise

Basically a B.Sc (Physics) from the University of Madras, India. Started the career in production engineering under German and Italian experts. MBA in Management from IIM, Ahmedabad (India). Ph.D (Management) from the University of Bomaby (the first ever awarded in this subject). Headed the computer centres of Multi nationals; "Data Processing expert" of the Commonwealth, London (To implement World Bank and UNDP Computer softwares); "Consultant Adviser" to the Caribbean Development Bank (CDB), Barbados. Associated with Nobel Laureate in Economic Science-1979, Arthur Lewis (Past President of CDB) & 4 more on his introduction. Visiting professor to many universities. A Trained ISO 9001:2000 Quality Auditor. Over 40 years of combined experience in Accounts, Computer Software, Economics, Engineering, Management, Science, Technology, Research & Development and Qulaity systems. Author of over 60 Application Research papers. Currently a free-lance consultant in ISO Quality Systems, Socio-Economic development acceleration, Innovative software designs. Can answer any question in Theoritical/Applied-economics with an in-depth and innovative dimension. I DO NOT ANSWER : 1. STATISTICAL data & analysis. 2. PRIVATE questions, as they do not appear for PUBLIC view & search 3. Examination & Project report oriented questions. Website http://www.drvsrs.com

Experience

Experience in the area Over 40 years in Industrial, Service and Economic development sectors. Socio-economic development oriented expertise (1982-86). With Commonwealth Fund for Technical Cooperation, London as a "Data Processing Expert". With Caribbean Development Bank, Barbados (UNDP,World bank set up) as a "Cnsultant Adviser". See "http://www.drvsrs.com/drvsrs.htm" and "http://www.drvsrs.com/publication.htm". National & International awards. R & D Author at http://ideas.repec.org/e/psu50.html and http://www.ssrn.com/author=360079

Organizations
Intellectual Consultants. A proprietory Research and Development unit under the theme "Innovation. Information & New Concepts"

Publications
See at http://www.drvsrs.com/publication.htm & http://dvsrs.com/store/page2.html

Education/Credentials
See full details at http://www.drvsrs.com/drvsrs.htm (1) D.Litt in Computer Science - 1983. World University, USA. (2) Ph.D - 1975. First management doctorate awarded by the University of Bombay, India, after the inception of the subject. (3) MBA – 1966. IIM, Ahmedabad. India. First batch. 4) B.Sc - 1959. Physics. University of Madras, India

Awards and Honors
Biography is listed in International Who is Who of Intellectuals (UK), Men of Achievement ( UK ), Men of Distinguished Contributions (USA). National and International awards and Citations.

Past/Present Clients
See at http://www.drvsrs.com/software.htm

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