In this approach, we start by understanding what is going on in the world on a macro scale such as GDP, employment, taxation, interest rates, etc. From there, we slowly deduct our way down to a micro scale in figuring out what type of company we want to select from our portfolio. It is like a deduction process. Start big and slowly reduce down. Macroeconomic factors to national level, and further down to the market/industry or even individual companies. Unlike many years ago in the past, we now live in an interconnected world economy.