If you want to learn how to be a professional value investor, this course is for you. This course is not for the faint of heart. There's a lot of material. You don't need much by way of prior knowledge, but you do need to make a significant time commitment. You're first going to learn how to determine the level of quality of a business. This requires a detailed understanding of financial statements, financial metrics, return measures, soft factors (management quality, composition of board, competitive advantage, etc.), and red flags. And you won't just use this independently, you'll put them within a broader framework. You're then going to learn how to value a business. I will cover many valuation techniques. That way you can apply the one that makes the most sense given the circumstances. Ideally, you want a divergence between quality and price. That is, you want to buy a company that is high quality at a fair price, or an average quality business at a below average price. The idea is to always look for those mis-pricings. But unless you know how to assess quality and how to come up with a correct valuation, you'll never learn how to find geniune mispricings. Lastly, all throughout this course we're going to help you build a mental framework that helps you to make smart decisions when things get tough. There is no specified time that this course will take. I recommend viewing the content multiple times. Pause and digest when necessary, and when you get it, move on.
In this video you will develop a basic understanding for how Income Statements are created and can be interpreted.
In this video you will develop a basic understanding for how Balance Sheets are created and can be interpreted.
In this video you will develop a basic understanding for how Cash Flow Statements are created and can be interpreted.
Most people do not really know what earnings are about. In this lesson we define earnings concretely.
Here we related earnings with free cash flow, and we discuss how understanding both is critical to the investor
In this lesson, we review what we learned in the prior lessons by going to real document as they are found on the SEC website.
We understand how to measure the returns companies make on their investments.
Here we learn the benefits of measuring a companies performance on an equity basis, and we discuss the pitfalls of which an investor must be aware.
Here we learn of the benefits of using the Return on Assets measure and also the pitfalls
Here we learn about the benefits and pitfalls of using the Return on Invested Capital Measure
Here we look at an example of when looking at return measures can lead you astray
Here we introduce the role that financial metrics play in evaluating a company
Here we introduce the checklists used by Benjamin Graham to separate good or great companies at attractive prices.
Here we introduce the bankruptcy prediction called the Altman Z score
Here we learn about a model that predicts accounting manipulation
Here we learn about a model that helps identify turnarounds as well as partition the universe of stock between high quality companies and low quality companies.
An exploration on some of the non-quantitative key information is found here.
A risk factor that is hard to measure, but is critical to uncover. It happens when the asset on the balance sheet is not financed with similar liability in terms of risk and duration
Another way of calculating the ROE. This method allows you to tease out the key drivers behind the ROE.
A detailed exploration on the PE Multiple
An exploration on the PEG ratio, the Price-to-Book multiple, the Price-to-Sales multiple, and the Price-to-Cashflow multiple.
This is a detailed account on how to go from Market Cap to Enterprise Value
Here we learn about EV-to-EBITDA and EV-to-EBIT
Here we discuss the way to approach long-term investing.
Here we approach short-term investing
A way to come up with a fair value multiple by examining the past values for this multiple
Here we look at how the S&P 500 can tell us what the fair value for a company.
Introduction to a valuation methodology called the Earnings Power Value
Our first example for EPV analysis is for a company called World Fuel (INT)
Second example of EPV analysis for a company called Fastenal (FAST)
How to calculate discount rates
How to calculate and understand Weighted Average Cost of Capital and Cost of Equity
The valuation short-cut seen through the perpetuity pricing model.
The basic on how to construct a Discounted Cash Flow Model
First DCF example on Microsoft
Second DCF example on Union Pacific
A novel way on using the Discounted Cash Flow model to understand the expectations built into the stock at the current price.
How to use the DCF to understand the right historical multiple.
An exploration on the valuation methodology called the Sum of the Parts
Analyze ownership to further learn more about a company
The conclusion of our course
I've been a professional value investor for over 10 years working at various prestigious hedge funds as well as international private equity funds. Recently, I've begun the process of creating my own hedge fund that buys and sells US and Latin American equities. I've been obsessed by how markets work and I've spent a tremendous amount of time honing my craft. Over the last 10 years, I've developed my own system in how to analyze companies. While I'm a value investor at heart, I've studied pretty much every investing methodology under the sun and I've managed to salvage useful concepts from all of them. Students will see just a little of this in this course, which is really about explaining value investing from the perspective of the long-term investor. I believe the best learning process is to start out messy, overwhelm yourself with lots of information, and put it into a cohesive structure by prioritizing, testing, and eliminating concepts and ideas. This takes time, but it forced one to make a subject that they understand intimately.