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How Different Standing Points Could Lead to Different Opinions

Most analysis that is done today is called time series analysis. That is to say, that analysts, when studying a company, compare where it is today, as opposed to where it was in the past, and where it might be in the future. Because a good time series analysis involves multiple time points, the average analyst can do this for only a few companies that s/he gets to know relatively well.

Another type of analysis, e.g. that practiced at Value Line, is called cross-sectional analysis. That is you hold the point in time constant (e.g., at today), and compare a bunch of companies across the spectrum at that single point in time. Such a comparison would rate companies compared to others at the same time, rather than compared to itself at different times.

BY DEFINITION, a cross-sectional analysis "ignores many of the indicators  [that others, mainly time series analysts], would typically consider in assessing bankruptcy risk." In a sense, that's the whole point. It's neither better or worse than time series analysis, but it offers a different standing point; like getting a sky level point of view as opposed to aground level point of view. It is valuable insofar as it provides the portection of a diversified viewpoint, in much the same way as having a diversity of stocks protects an investment portfolio.