It may seem like a given that you should do your homework before plunking down your hard-earned cash on a company's stock -- but many people don't.
What Does the Company Do?
Warren Buffett famously says he doesn't invest in what he doesn't understand. If the greatest investor of the past 60 years is brave enough to acknowledge that he doesn't understand all companies, we should all probably take heed. This first basic question is a simple one, but that doesn't mean it's easy. To answer the question, there are plenty of places to look, including the company's website.
Is the Company Profitable?
What Is the Company's Earnings History and Outlook?
How Richly Is the Company's Stock Valued?
Who Are the Company's Competitors?
Who Runs the Company?
How Clean Is the Company's Balance Sheet?
Have You Read the Company's 10-K and 10-Q Annual Reports?
Are There Any Red Flags That Call Into Question the Company's Integrity?
Is the Company's Competitive Position Sustainable?