Good evening, I am David Li, a grade 10 TALONS student, and for my in-depth project this year I am doing financial analysis and studying how this can be applied to the stock market. Throughout the year my goals are to have a basic understanding of financial literacy, to learn how the stock market functions, and be able to use this knowledge to attempt to predict how certain events or policies can affect the market.
Financial analysis is taking data, whether it is information from the news, data from Yahoo finance, or any other form of information, and using it to try to predict the future of a certain part of the market. For example, if I hear that a certain currency has high inflation, I can predict that gold prices or bit-coin prices are probably going to rise, while if I hear that a travel ban is going to happen I can predict that cruise stocks are going to fall. Through being able to analyze data I can compare companies, learn or at least understand economic trends, and potentially utilize this skill
I have always been interested in data and information, so when I heard that accounting was no longer a viable option for in-depth I instantly turned to financial analysis. I am also thinking of potentially working in this field in the future, so exploring this through the in depth project can really be helpful.
I am going to learn financial analysis by reading related books and articles, applying them to analyze businesses and current affairs, and using this knowledge to try to predict the future of specific parts of the market. I will talk more in-depth about my plan in the plan section.
After discussing with my mentor, he suggested I divide my five-month period into four sections.
For the first month, I should focus on reading and researching to gain a better understanding of how the economy and the market functions. He gave me several book recommendations, including “The Economics Book” (very descriptive name) which I am currently reading, “经济解释” (Explanation of Economics), and “The Interpretation of Financial Statements”.
After I have a reasonable understanding of the general market, I can start to focus on researching and analyzing specific companies, which my mentor can guide me in and correct me if I make any mistakes. He suggested I spend about one week on each company, which should be sufficient time for me to research and understand how the company functions, and he can check my work at the end of each week.
After about four to six of these projects, I can start analyzing and comparing multiple companies or even entire industries and attempt to predict the future growth of these companies and analyzing how certain events can affect these companies/industries. My mentor’s advice was that I spend two to three weeks on each of these comparisons, and we can meet each week to discuss my progress.
I can keep doing this until late April, by which time I can start working on my final presentation. I am still not quite sure about what exactly my final presentation is going to be, but it will probably be along the lines of analyzing current affairs and attempting to predict the near future or comparing companies and predicting their growth.
Who can I ask for help from?
I am doing pretty well at the moment, as I have multiple sources to ask for help from including my mentor, my aunt, who works in real estate investment, and my grandmother’s student, who is currently an economics professor at Nanjing University. I also often talk to friends or family members about political or economical news, and their opinions always help me a lot. When I am really out of ideas on things to read about, I sometimes even look for economy-related conspiracy theories online, since although the theories themselves are ridiculous. oftentimes the root problem that they are talking about is actually legit.
So far I have read about 40 pages into “The Economics Book” and had a discussion with my mentor about what this project is going to look like. As I had to change projects at the last second I wasn’t able to do as much as I was hoping for, but at this rate, I should be able to stay on track and stick with my plan.