Not really!
I know how to drive them, but if you asked me how they work, I would not really know how to definitely explain it.
That small technical limitation on my part doesn't stop me from knowing whether XYZ Autos is a quality company or not. I don't understand the cars they make, but I do understand XYZ Autos. Moreover, that understanding is critical to making a decision about the value of their stock.
There are many good and objective ways to value stocks and improve your finances. These involve looking at various financial .
However, one of my simplest rules for investing is that you always must understand what you are buying!
This is by no means original with me. It is a basic part of fundamental analysis!
How deeply you must research in order to understand a company before you invest in it is a rather personal decision!
Some investors feel fine with just a general understanding, while others want to know everything there is to know about the company. I think that somewhere in between is perfect.
But you must know what makes a company different from others and whether that difference adds any real value or not.
Sometimes being different is not good ...
Buy what you definately understand for a reasonable price and ...
You will be well on your way towards successful investing!