Investing is all about taking risks in order to get a reward. When getting started in stocks you have to analyze the company's growth so you make money. The most basic measure of a stocks worth involves that companies earnings. When you buy a stock, you're acquiring a piece of the company, so profitability is an important. Before deciding how much to spend, you want to know how much money that store makes. If it makes a lot, you'll have to pay more to acquire it.