How To Calculate Weighted Average Cost of Capital WACC

January 2023: Nvidia + Tesla = 700 billion USD
June 2023: Nvidia + Tesla = 2 trillion USD
If you tell me the markets have gone crazy I won’t argue, I’ll even agree with you 100% immediately. However, that doesn’t matter. Markets can stay crazy and irrational longer than any of can stay solvent, and it works both ways. This is a very strong bullish cycle with lots of hot air and hype, but there is no telling how long it can continue.
There is a large group of investors that made life changing money in this 6 month period, and a large group that missed out. Members of my community were dollar cost averaging into some of these stocks so we are quite happy with our performance over the past 6 months, but if you are part of the group that missed out, what do you do now?
The time to decide your next moves and build your strategy for the next 6 months is now. There is no time to waste. Failure to plan is planning to fail. Simple as that. In the next 6 months you will see 3 major groups of investors:
1) some will chase this crazy market
2) Some will wait on the sidelines
3) some will have a real plan and strategy
Options 1 and 2 are equally bad.
When a market goes hot like this there is no telling how high it can go before a correction (which is bound to happen at some point!). However when it comes down it does so violently and destroys portfolios.
So you have a major risk either chasing this market or sitting on the sidelines.
What do you do? you become a part of group number 3. You learn how to find good companies to invest in long term by Dollar cost averaging your cost basis over the long haul. In this video I am showing the first step of this process, which is learning how to find the discount rate of a DCF valuation model for any public company, by calculating the WACC weighted average cost of capital of any company you are researching. The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets and that is the discount rate for your DCF model for any company.
Want to learn more on how to become part of group number 3 and have a strategy that works in either direction of the market? Join our 4,500 member private community and become part of group number 3: / tomnash
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Nothing in this video constitutes tax, legal, financial and/or investment advice, nor does any information in this video constitute an invitation and/or solicitation to invest in a particular security. This video merely expresses the author’s opinion and should be viewed as such. Before proceeding with any investments, you should do your own research and seek advice from an independent licensed professional.
The author of this video does NOT accept liability for any investment decisions, as this video is provided only for educational and entertainment purposes. Although the author has endeavored for the information in this video to be correct and accurate, he does NOT assume liability nor does he guarantee that the data will be updated, correct and/or accurate at all times.