You’ve probably heard the age-old stock market advice to buy low and sell high. But how do you know what’s high and what’s low in advance? Is a stock like Ford Motor cheap because it trades for the same price as two Big Macs, while Berkshire Hathaway is expensive because it costs more than most people’s houses? Well, no. It simply isn’t that simple. But in this video, you’ll learn how to value a stock properly, with three different methods. By using P/E ratios , by using DCF, and finally, by using a third option, a much lesser-known method, which falls somewhere in between the two most common approaches. And yes, there will be tons of references to Warren Buffett, but you’ll have to wait a little until his first appearance.
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Timestamps for this masterclass in stock market valuation:
00:00 Intro
01:27 Relative Valuation (P/E)
12:40 Discounted Cash Flow Analysis (DCF)
32:08 Growth + Dividends + Multiple (TIKR)
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My goal with this channel is to help you make more money and improve your personal finances. How to become a millionaire? There are many ways to get there – investing in the stock market, becoming a stock trader, doing real estate investing, or why not becoming an entrepreneur? But whether you are interested in how to invest in stocks or investing strategies for creating passive income with rental properties – I hope to be able to provide you with a solution (or at least an idea) here. Warren Buffett - the greatest investor of our time - says that you should fill your mind with competing ideas and then see what makes sense to you. This channel is about filling your mind with those ideas. And in the process – upgrading your money-making toolbox.