That includes who’s running it, what sector is it active in, its consumer perception, so many different components that sometimes past performance is anything BUT an indication of future gains. Often secrecy is paramount: Management wars, stock-splits, all the tools are THERE, but you never know who’s going to use which one to squeeze out some more profit or to buy out someone else.

So, since we need to go hunting, let’s begin with the environment and slowly zoom in. Before we invest in a company, it’s worth our while to study the sector it operates within. Is it a growth industry or one that’s on the wane? How about regulation – is it stifling the industry or prodding it to new horizons? Where do the raw materials come from? If the answer is “a war zone”, maybe you should reconsider.

Next, we look at the company’s LOCATION within that environment. What’s the market share? Is it expanding or static? Is the company a potential takeover target? Who are the competitors? How well is the fair value of the share performing compared to other companies in the sector?

Next on the list comes the company itself. Most publicly-traded companies are run by outsiders, not family members, who are often more concerned with their golden parachutes than the actual company. Fortunately, a CEO’s paycheck is public record. You can easily see if he or she is overpaid or not. The average, by the way is 70 times the lowest salary in the company. How many members of management are professionals? How many are simply overrated salespeople? Are their any conflicts of interest amongst board members? Finally, seek out the press and social media. Try to gauge corporate culture, atmosphere and morale.

At the end, we zoom in on the paperwork. Look at the charts and seek out the key moments. When did shares spike up or down? What was the related reason? How is the stock performing related to other benchmarks? Then, earnings reports and conference calls. Compare results to previous reports and competitors. You’ll probably be looking back about 3 years to get a fair coverage. What’s the equity-to-debt ratio? Too much inventories or too little? Capital efficiency – how much is diverted to R&D? how much to satisfying shareholders?

Through all these levels, you’re looking for the company’s strengths, its weaknesses, the opportunities it faces and the threats – what we call SWOT analysis.

After all that, you’ll be ready to invest in a share or – at worst – to short it.