E-S-C Analysis

Economic-Sector-Company Analysis is just like a funnel used to seperate one ideal stock from a big lot. The impurities in the form of not so desirable stocks are inspected and thereby removed and then a fine range of few stocks are selected for investment. In short E-S-C analysis is used for filtration of fundamentally good companies from the economy as a whole.
E-S-C analysis is a part of security analysis where forces affecting the value of the global and national economy are taken into consideration. Later as per the economic conditions, various sectors viz; IT Sector, Retail Sector, Power Sector, Insurance Sector, Service Sector, Auto Sector, Banking Sector etc. and industries within these sectors are examined on the basis of demand-supply factors. Ultimately, a scanning of the companies including their financial data, management, business and competition with others is done. This can further be elaborated to Global economy- local economy-Sector-industry-company. This reduces the risk of random selection and maximizes profits.
Fundamental analysis helps in analyzing the performance at each level:
Firstly forecast the performance of all the major economies of the world and analyze their growth cycle i.e. the rate of inflation or recession. This Study might indirectly reveal the condition of Power sector or Banking Sector.
Secondly study the local economy in comparison with the world economy in terms of its GDP, currency valuation, Government taxation policies, Employment and other natural factors. Analysis at this stage automatically helps to generate the performances of Agricultural sector, IT Sector, Retail Sector etc.
Subsequently evaluate different sectors in accordance with the conditions prevailing in the economy. Some sectors (agricultural) work better than others during specific economic conditions (monsoon).
The segregation of the sector into various industries (sugar, cotton etc) is the following step. The fittest during that period is taken into consideration.
Ultimately once the possible industry is narrowed down, the investor is left with a few potential individual stocks based on the synthesis of their financial statements and management and most importantly their performance as compared to other businesses within the same industry (Renuka, Balrampur Chini, Triveni etc).
So if you are looking for a successful life time value investment in the stock market, just go for it!!!
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