Common Myths About Fundamental Analysis in Nepal

In the Nepal Stock Exchange (NEPSE), many investors and traders still carry several myths and misconceptionsabout Fundamental Analysis — one of the most powerful tools for intelligent investing. While this method is globally recognized for identifying undervalued companies and predicting long-term performance, in Nepal, it is often misunderstood or ignored due to lack of awareness and proper education. Breaking these myths is essential for anyone who wants to invest logically and build lasting wealth.

The first common myth is that Fundamental Analysis is only for big investors or financial experts. Many believe that only large institutions, banks, or millionaires can benefit from it. In reality, every investor — whether you’re starting with NPR 10,000 or 10 lakh — can use fundamental analysis to make better decisions. Studying earnings, balance sheets, and cash flows helps investors of all levels identify strong companies and avoid weak or risky ones.

The second myth is that Fundamental Analysis is too complicated for beginners. While it involves understanding financial ratios and company performance, it is not as difficult as many think. With proper guidance, anyone can learn to read EPS (Earnings Per Share), P/E Ratio (Price-to-Earnings), ROE (Return on Equity), and Dividend Yield. Once you understand the logic behind these ratios, analyzing companies becomes both simple and rewarding.

Another common misconception is that Technical Analysis makes money faster while Fundamental Analysis is slow and outdated. The truth is, both methods serve different purposes. Technical analysis helps with timing entries and exits, while fundamental analysis helps select what to buy and why to buy. Without a strong foundation, even the best technical setups can fail during economic instability.

Some investors also believe Fundamental Analysis doesn’t work in Nepal because the market is small or influenced by rumors. However, this is completely false. The same economic and financial principles that work in global markets apply in NEPSE as well. In fact, in a developing and volatile market like Nepal’s, understanding fundamentals gives investors a massive edge by helping them identify genuinely valuable companies among the noise.

Finally, many think you need to be an accountant or finance graduate to do fundamental analysis. In truth, it’s not about academic qualification — it’s about logic, curiosity, and discipline. Anyone can learn to analyze companies with consistent effort and proper training.

As Sandeep Kumar Chaudhary, Nepal’s leading Technical and Fundamental Analyst and founder of the NepseTrading Training Institute, rightly says — “Fundamental analysis is not about numbers; it’s about understanding businesses. With patience and curiosity, anyone can master it.” With over 15 years of experience in banking and capital markets, and professional training from Singapore and India, he has trained more than 10,000 Nepali investors to think logically and invest with confidence. His NepseTrading Training Institute has become Nepal’s most trusted platform for mastering both Technical and Fundamental Analysis with a practical, real-world approach.