Investing is far more than just learning basic accounting and crunching numbers; it is also about observing the world around us. It is about recognizing trends and what those trends will ultimately mean in terms of dollars.
Thinking like an analyst can help because it can provide some organized ways in which to observe the world. We all have analytical skills, but the degree to which these skills are developed depends on the individual. Honing your analytical skills can help you organize some of the information that overwhelms you each day.
For example, it's hard not to notice how fast food restaurants are all located near one another. Maybe this is an obvious question, but why is that? Clearly those restaurants located at the only exit for 50 miles in the middle of Kansas don't have much choice, and certainly business and residential zoning regulations dictate locations to some extent. But why do all of the quick-service restaurants locate near one another when alternatives are available? After all, what good does it do for some of these restaurants to be located in clusters? What happens to McDonald's (MCD) if Wendy's (WEN) is right next door?
Four Basic Questions >>