Warren Buffett summarises three categories of information in his latest annual report and accounts:

"Our long-held acquisition strategy is to acquire businesses that have consistent earning power, good returns on equity and able and honest management."

Berkshire Hathaway, 31 Dec 2018 annual report, Note 2, page K-77

http://www.berkshirehathaway.com/2018ar/linksannual18.html

As you mentioned fundamental analysis, imo, the three most important issues at firm-level are:

1. Is the financial reporting reliable? I would have a look at the degree of accrual accounting abused to evaluate the "honesty" of the management. Firm managers tend to manipulate earnings to prolong overvaluation caused by market mispricing of financial information released by the firm (Jensen, 2005, Agency Cost of Overvalued Equity).

2. Earnings growth, earnings persistence in comparison to cash flows.

3. The risk of debt and ability to meet the firm's obligations.

Of course, market analysis and products are also important though.

Dear Prof. Prokopowicz,

According to traditional Financial Economics the three categories of information are (a) Public, (b) Private and (c) Mixed. According to our Econophysics research and our discovered Millenial Systems Classification and Systems Integration Theory (Mallick (2012, 2015), Mallick, Raychaudhury, Mallick and others and the discovery of the "P"particle of Nature which produces the Econophysics Field Theory (Mallick et. al (2016, 2017, 2018, 2019)) in the AGGNNNetworks Millenial Standard Fundamental Model of Econophysics Statistical Meanfield any systems classification of Information force can be coupled or by the Higgs-Mallick mechanics Quantum Mathematics of "Market Strings" Mallick (2018) systems integrated by our discovered RHMHM Functor Algebra Calculus Quantum Mathematics (www.econometricsociety.org/[email protected]) to result in Systems Electronic Stock Markets equilibrium in the Learning Field by satisfying the Laws of Econophysics (Mallick et. al. (2012, 2014, 2015) and others)). Hence, in accordance with our Light and Electromognetic wave environment (Quantum correlation in statistical meanfield by Copenhagen intrepretation and Schroedinger potentials in starred General Relativity using String Matching Field Theory) the transversality of the dynamics of the field in spacextime agrees with the SO(32) Field equations at RTP of country internetworked stock exchanges and is "sustainable" by Higgs-Mallick mechanics and Haag Theory dimensional compounding result.

S.K.Mallick Earl Fitzpatrick of York, KBE, QC, Fellow EPS

for S.K.Mallick, S.Raychaudhury, S.Mallick

of The RHMHM School,

USA, Japan, India

Dear Colleagues and Friends from RG,

The use of Big Data Analytics analytical and database technologies, i.e. technologies typical of the current development of the fourth technological revolution Industry 4.0 and the development of applications of these technologies and ICT information technologies in the field of economic and financial analysis as well as reporting and reporting of economic entities determined the development of Financial Industry 4.0. In recent years, The Financial Industry 4.0 has grown in importance in business, economic and financial analytics, carried out on large quantitative data sets obtained from conducted research, and in predictive analyzes to determine the likely development of enterprises and institutions in subsequent years. ICT and Industry 4.0 information technologies are increasingly being implemented in business intelligence, to conduct Business intelligence type analyzes and research processes conducted on Big Data Analytics analytical platforms to support and improve business entity management processes. In recent years, new ICT information technologies, internet technologies and advanced data processing technologies Industry 4.0 have been used in many areas of economics, finance, banking, management, marketing, etc.

The multi-faceted, functional and technological synergy of the development of these fields leads to the development of applications of ICT information technologies etc. in the field of advanced quantitative analyzes referred to as The Financial Industry 4.0 in economic and financial issues. In addition, the development of applications of The Financial Industry 4.0 in economic and financial analytics is one of the features of the development of modern knowledge-based economies. Technological progress in this issue is also an important attribute of comparative advantage between individual entities operating in the commercial financial sector. Therefore, improving the techniques of developing the applications of The Financial Industry 4.0 in economic and financial analytics becomes an important factor of competition between banks and other financial sector institutions in which financial risk management processes are a key issue for generating revenue from sales of financial products offered. In addition, the development of applications of The Financial Industry 4.0 in economic and financial analytics can significantly contribute to the improvement of system credit risk management processes in central institutions of the commercial and public financial system of the state, i.e. in central banking.

The multifactorial complex The Financial Industry 4.0 are also used to analyze quantitative results of scientific research. Correctly implemented econometric methods allow for objective processing of large quantitative data sets, thanks to which research theses are verified. The use of ICT information technology for the needs of econometric and statistical analytics allows for automation, standardization, objectification of carried out verification processes of quantitative data describing complex processes, etc. and reduction of the costs of analyzes. The computerized processes of using econometric and statistical tools for analyzing large quantitative data sets have enabled the development of analytics based on the use of advanced data processing technology Industry 4.0, including data processing in the cloud, in Big Data database systems, the use of Business Intelligence analytical platforms, the Internet of Things technology learning machines, artificial intelligence etc. Without statistical methods, it was not possible to effectively develop advanced Data Analytics, Data Science, etc. advanced analytics. Therefore, without the use of complex econometric models in verification processes and the analysis of large quantitative data sets, the development of scientific research would be much slower. than proceeding.

The Financial Industry 4.0 is particularly helpful in building complex, multifactorial models describing the functioning of complex economic organizations. An example is Business Intelligence analytics based on data from one side of the financial statements from previous periods and from data describing the current market situation and other aspects of the enterprise environment. In the Busines Intelligence computerized analytical platforms, The Financial Industry 4.0 is built by combining the formulas of economic and financial indicators, taking into account the mutual correlations and relationships between specific economic and financial categories that describe the functioning of a given entity, examined from previous studies. These correlations may relate, for example, to the impact of changes in the market environment on revenues from the sale of products or services. Changes in sales correlate with the efficiency of using fixed and working capital, with the level of debt, profitability, with the possibility of generating equity for further investments, etc.

In recent years, the application of Financial Industry 4.0, Business Intelligence, Data Science, Data Analytics, Big Data in the field of fundamental and technical analyzes carried out to examine future trends in the capital markets, including securities markets, has been growing. The Financial Industry 4.0 on the basis of this type of models allows on the basis of historical data, e.g. quantitative data contained in the financial statements of economic entities describing the economic condition and financial effectiveness of a specific company or institution to carry out predictive analyzes of the most likely extrapolation of the development trends of a given entity in correlation with specific factors market, economic and financial environment in order to prepare development forecasts for the specific economic entity surveyed in subsequent years. The multifactorial complex The Financial Industry 4.0 are also used, among others, for the forecast valuation of securities and other capital assets valued on the stock exchanges, commodity exchanges, currency markets and others. The multifactorial complex The Financial Industry 4.0 are also used to estimate the forecast level of stock indexes, to carry out fundamental analysis of securities issuers, forecasts of the development of financial markets, the likelihood of the emergence of the next financial and economic crisis.

In view of the above, business entity management processes are increasingly supported by computerized Business Intelligence platforms that facilitate multi-criteria analysis and reporting. This reporting would not have been possible without the use of complex econometric models whose formulas are entered in computerized analytical platforms. Complex, multi-criteria analyzes carried out using complex econometric models for verifying the operations of large companies require aggregation and analytical processing of large data sets in Big Data database systems. Specialized IT companies produce applications helpful in conducting economic analyzes, i.e. the Business Intelligence platform. Increasingly, large and medium-sized companies use these platforms adapting them to the specifics of their business. In connection with the above, the effective application and continuous improvement of certain complex, multifactorial econometric models used in Business Intelligence, Data Analytics, Data Science, Big Data Analytics, etc., significantly supports organization management processes and by using statistical methods also allows the development of various types of analysis predictive.

I conduct research in this area. I described the above issues in scientific publications that are available on the Research Gate portal. I invite you to cooperation.

Do you agree with me on the above matter?

In the context of the above discussion, I ask the following questions:

- Has the application of Big Data Analytics analytical and database technologies, i.e. technologies typical of the current development of the fourth technological revolution Industry 4.0 and the development of applications of these technologies and ICT information technologies in the field of economic and financial analysis as well as reporting and reporting of economic entities determined the development of Financial Industry 4.0?

- Is The Financial Industry 4.0 growing in business, economic and financial analytics, as well as in predictive analyzes of determining the development of enterprises and institutions in the coming years?

- In connection with the development of Financial Industry 4.0 and Business Intelligence, Data Science, Data Analytics, Big Data, etc., will the level of precision of determining future development trends in the scope of fundamental and technical analyzes carried out to investigate the development of the situation and future trends be shaped in capital markets, including stock markets?

- What are the main determinants of the development of The Financial Industry 4.0?

- Will The Financial Industry 4.0 increase the effectiveness of economic and financial analyzes?

- What do you think about this topic?

Please reply.

I invite you to discussion and scientific cooperation.

Thank you very much.

Best wishes.

Dariusz Prokopowicz

Dear Christopher C Kelly, Khanh Hoang, Sir Soumitra Kumar Mallick, Thank you very much for your answer and participation in the discussion. I, too, believe that fundamental analysis of certain assets quoted on capital markets is such a complex, multi-faceted process that it is not easy to list just three of the most important elements. In addition, certain key elements of fundamental analysis will depend on its specificity, type of assets, type of capital market, market situation, etc.

What do you think about it?

Thank you very much and best regards,

Dariusz Prokopowicz

Our discussion shows that which categories of information are considered key when conducting fundamental analysis of companies, listed companies, issuers of securities is determined by the types of economic entity, the type and specificity of the main field of activity of the enterprise, the specificity of the industry or sector, etc.

Best regards,

Dariusz Prokopowicz

Dear Christopher C Kelly,

Thanks for the three categories of information according to Warren Buffett. Thanks for the link to Warren Buffett's financial statements, where the key information categories are listed.

Thank you, Regards,

Dariusz Prokopowicz

Fundamental analysis consists of three main parts:

• Economic analysis.
• Industry analysis.
• Company analysis.

Dear Chuck,

Yes, that is correct. You have listed the three main problem areas that are investigated when conducting fundamental analysis. I would also add that, within the framework of economic analysis, the key area of research carried out is the financial analysis concerning the economic entity under study (company, enterprise, corporation, financial institution, etc.), and within this, the ratio analysis, i.e. the financial analysis carried out using a set of specific financial ratios. Consequently, this area of concern is sometimes referred to as economic and financial analysis. Industry analysis, on the other hand, falls within the field of sectoral analysis also referred to as sectoral economic analysis. But since you also mentioned economic analysis, I am guessing that this is primarily a macroeconomic analysis of the entire economy (national or international, possibly global if the company operates on a global scale).

Thank you very much,

Best regards,

Dariusz