This is very closely along the lines of what I have been thinking a lot about lately regarding investing. You are basically betting that a company will not go

This is very closely along the lines of what I have been thinking a lot about lately regarding investing. You are basically betting that a company will not go bankrupt (when the stock is worthless..). The rest of the price fluctuations are just people's opinions. If I buy stock in companies I know nothing about, how can I possibly predict how well they are doing against the competition and why they are not going to go bankrupt. I think there is a place in an investment bank for quantitative analysis, but not for the regular investor. Most of the formulas they give are pretty shoddy anyway. When I have money to invest I will probably buy a big ol' index fund, which is like betting on the US economy, which will (hopefully) always be doing well. I might also then invest in a few companies that I know, understand, and really like.