Qualitative Analysis

Understanding People and Qualitative Analysis

Qualitative analysis can sound almost like “listening to your gut,” and indeed many qualitative analysts would argue that gut feelings have their place in the process. That does not mean, however, that it is not a rigorous approach. Indeed, it can consume much more time and energy than quantitative analysis.

People are central to qualitative analysis. An investor might start by getting to know a company’s management, including their educational and professional backgrounds. One of the most important factors is their experience in the industry. More abstractly, do they have a record of hard work and prudent decision-making, or are they better at knowing—or being related to—the right people? Their reputations are also key: do their colleagues and peers respect them? Their relationships with business partners are also worth exploring since these can have a direct impact on operations.

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