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best strategy to pick a winning long term investment in 2023 ||fundamental analysis for long term investment in stock market 2023

best strategy to pick a winning long term investment in 2023(fundamental)

in previous blog we had explained about technical aspect for long term investment , you can read that by clicking here

"The economy always grows in the long run." Warren Buffett's statements acknowledge that short-term bear cycles are not as important when looking at the big picture of the economy, but it is also true that not every stock or company grows in lockstep with the economy. There are numerous stocks in each sector to invest in or avoid investing in. The choice of stocks to invest in from each individual sector like banking and finance, infrastructure, pharmaceuticals, technology, etc. is always a matter of research, and investors look for various key factors to keep in mind while picking stocks for the long term. Long-term investing is basic and simple but requires the right guidance.

By the end of this blog, you will understand everything there is to know about long-term stock investing while keeping all of the stock market's key factors and fundamentals in mind. You will be equipped with all the skills and factors required for long-term investment.

This post was created by analyzing various books written by Warren Buffet and other legendary writers, as well as Chua I-Min's globally famous courses. We also conducted research on all stocks that provided the best ROI in the previous decade and created a detailed report on which factors we would have chosen if we were doing it today instead of ten years ago.

To know whether a stock is good for the long term, one must analyze its market share, fundamentals, and innovation for future projections. Companies that rise after the market breaks or falls demonstrate that they have strong market research and innovation capabilities, as well as the largest market share in their respective industries, making them more likely to succeed in the long run.

fundamental analysis for long term investment in stock market 2023 

Fundamental analysis is all about evaluating a company's actual value based on various fundamental factors. Unlike technical analysis, fundamental analysis is easily understandable and simple. However, for proper research, we have to use both fundamental and technical analysis. Fundamental analysis is mainly used for the long term because market dynamics make it difficult to apply technical analysis mathematically over a period of 5-10 years. Here are various fundamental points to keep in mind while investing


Always go with the biggest fish in the pond. The company with the largest market share in any sector or industry is a good stock pick. Alternatively, you can buy the top three or five companies in that sector for better risk management.

For example, in India's pharmaceuticals sector, the top ten companies by market capitalization are as follows :-

Sun pharmaceuticals limited 
Cipla Limited
Divis Laboratories
Dr. Reddy Laboratories
Apollo hospitals enterprises
Torrent pharmaceuticals limited    
Max health institute limited
Abbot India limited
Zydus Life-science limited
Alkem Laboratories limited

Now, the total market capitalization of all pharmaceutical companies in India is around 4072200 crore rupees, and from that market share, the top 5 companies have a market share of around 10%. So, instead of selecting a company like XYZ OP Limited, which lacks dominance in the sector, choosing companies with market dominance can be a good long-term strategy.

In any sector, if we are betting for the long term, dominant market shares are preferred as these companies are too big to fail. Pharmaceuticals, information technology, fast-moving consumer goods (FMCG), petroleum, and the oil industry will all survive for 10 or 20 years, but most small businesses will need to do something extraordinary to stay alive in the market. Although there is a possibility of large market-cap companies failing, it is highly unlikely.


Dividend is a part of the profit that a company pays to its investors or shareholders. The general idea is that if any company is constantly paying dividends to shareholders, it simply means that the company is balanced, good, and profitable. However, not every profitable company pays dividends. There are two possible outcomes if a profitable company pays dividends or not.

(i) COMPANIES PAYING DIVIDENDS  - Only strong companies are capable of paying dividends constantly and continuously. Dividend-paying companies show the fact that their directors, promoters, and board are confident in their financials and future growth. However, paying dividends can prove to be a burden if anything happens to the company's financials and it is not able to provide the dividend or has to pay a lower dividend than the previous financial year. It is hard for board members to decide not to pay dividends if the company was continuously providing dividends..

(ii) COMPANIES NOT PAYING DIVIDENDS - Just because dividend-paying companies are good, doesn't mean that every profitable company has to pay a dividend. Generally, growth companies or companies that are battling for market share within a sector decide not to pay earnings to shareholders and reinvest that money in the company to increase its equity amount.

In simple words, continuous dividend-paying companies are a logical choice, but companies in a growth and expansion period are also capable of multiplying your money exponentially. 


Companies have to declare their annual report every year, which is a must-follow rule for any public company. This rule came into existence after the stock market crash of 1929, which compelled companies to declare their reports.

Financial reports consist of many parts, such as infographics on the company's goals, operations of present or previous years, CEO's letter to shareholders, financial data, balance sheet, cash flow, and so on


Companies that do not invest or take interest in innovation or research and development have a higher chance of losing their market share or dominance in the long run. There have been many cases in the past three decades where companies with a huge market share in the industry were completely wiped out or failed badly due to the lack of innovation or futuristic research and development.

If we think deeply about the business dynamics and ecosystem of industries, this is how the market works, as stated by Aman Gupta, co-founder of the leading music wearables brand Boat, "when the market changes its needs and shape with time, new players enter the market and dominate it. That's how this ecosystem works.

So while investing in any company, you should also keep an eye on the research and development department of the company, or fundamentally research whether the product or service of the company is relevant as per the changing time or market space.

The market history of Nokia is a good example of the lack of innovation. Nokia was the biggest player in the mobile industry between the period 1990 to 2005. Nokia's name was synonymous with mobile phones, and it was famous for producing durable and reliable mobile phones. It was a monopoly player in the market, but the company was not able to cope with the changing market trends and industry requirements. It failed to embrace the smartphone revolution, and at that period of time, new players entered the market and dominated the industry.


fundamental analysis is an essential instrument for making long-term stock market investments. It's critical to focus on basic aspects of a firm, such as market share, dividend consistency, annual reports, and innovation, while investing in it. These aspects should be considered in addition to short-term market movements. Businesses with sizable market shares, dependable dividend payments, and a keen emphasis on innovation and R&D are probably attractive long-term investments. Yet, as the Nokia instance demonstrates, investors must also be aware of the constantly shifting market dynamics and industry trends. Investors can make wise judgements and succeed over the long run in the stock market by keeping these fundamental ideas in mind and completing appropriate research.

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