THE INTERPRETATION OF FINANCIAL STATEMENTS (BY BENJAMIN GRAHAM)
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- Опубликовано: 31 май 2024
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Fundamental analysis & value investing 101. This video presents the 5 greatest takeaways from Benjamin Graham’s classic, The Interpretation of Financial Statements.
A playlist that will help you in mastering Benjamin Graham’s art of Value Investing: bit.ly/2Txvxgd
Top 5 takeaways from Benjamin Graham’s The Interpretation of Financial Statements:
00:00 Intro
02:04 1. Understanding the Income Statement and the Balance Sheet
05:13 2. Industry Specifics
07:53 3. Watered Stocks
09:35 4. The Liquidation Value of a Firm
11:29 5. Expected Returns of the Quantitative Investor
TL;DW:
- Know thy income statement and balance sheet
- Ratios are useful when considering the fundamentals of a company, but beware. If the numbers are healthy or not depends on the industry.
- It’s quite common that stocks are “watered” to look like they perform better than they actually do
- If a stock is priced lower than its current book value, the intelligent investor should take a closer look. This, could be a great value investing opportunity
- To achieve maximum portfolio returns, the value investor should do both a quantitative and qualitative analysis of his stock market investments
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.
A playlist that will help you in mastering Benjamin Graham’s art of Value Investing: bit.ly/2Txvxgd
Hey, great video - But when I try to apply this to a particular company, I get lost in all their accounting jargon.
Would you be able to make a video explaining how to interpret a companies Filing History?
Because I just seem to be looking at 40 pages of jargon (Most of which probably isn't even relevant)
Might I ask what is the yearly average return of your personal portfolio ?
hey Swedish is this stuff you're teaching in this video and others for thee American stock market?? or is it the same for all markets
This is really a great video buddy:) Like the way you use illustrations to explain ideas.
If the value of the dollar is waiving on the faith and confidence of the people then at what point is the dollar bubble going to pop? We might pretend one pigeon shit is equivalent to 1 dollar which is might just realistically be. The fédérale is running the biggest ponzi scheme ever does anybody look into the numbers? If you dont own real estate or commodities then the net value of any given investor or the GDP then you pretty much might say that figure is what you are worth in pigeon shit. But yea ofcourse lets keep going on and believe the dollar currency is really worth something.
Personally I’ve read all of Graham’s books and I must say you do a great job summarizing his books
Awesome to hear it, thank you! His greatest work is yet to come though, stay tuned ... 😁
True
Do you have a an additional resource on chapter 2? It's already difficult for me to fully understand the debit/credit concepts on the balance sheet example. Thanks!
Hi do you happen to sell your old books copy? hardly find hardcopy of this book. Hope I could scout help from you. Thank you
@@maryjanevillanueva3924 it seems to be on Amazon...
8:59 Very interesting point. The more assets a company has, the more room for depreciation, which negatively effects net income. "It's the income statement that reveals the real value of assets, not their arbitrary figures in the balance sheet." - Benjamin Graham.
Well, bear in mind that the book was written before cash flow statements, and Dep&Amo are not necessarily a loss of money.
@@timtimterex2506 thats why i reccomend the book warren buffett and the interpretation of financial statements
@@drek273 same 👍
I'm miss Anna Antwain Origin from Ukraine Please I want you to assist me in investing a total amount of ( **** ) which I inherited from my late parents I lost my parents during this war going on over here in Ukraine, I am 22years old I am seeking for your assistance I have no business idea, I would like you to help me get this fund invested in your country while I will come to stay with you and continue my education in your country.
I like this dude he doesn’t play around with the subject like all these other Chanel he gets straight to the point and explains it clearly learned a lot here than any other Chanel
Gosh, you are a genius! I don't know how you manage to summarise 500 pages into 5 slides but you do this brilliantly! I find myself saving nearly each one of your videos for future reference. Absolutely great job, thank you so much!
Me too
Anna Y I appreciate your comment a ton. Thank you for your support!
Damn I must have gotten a summary of the book. Mines only 121 pages!
you are extremely smart for linking together multiple books. So that if a person watches one video, they will get curios and watch the other. I watched 10 videos in the past 3 days that way. GOod job!
I’ve been trying to find info to learn this stuff properly for months. I’m willing to learn and put time in but I need the topics structured in a particular way for me to get better results. These videos help me learn the correct system and read the most useful books. This is perfect for me.......subscribed, thank you 🙏
I'm new to investing and learning a great deal from you. Thank you for your great work!
What a great video with a lot of value! Our team absolutely loves watching your videos!
Hope your channel grows to million subs, you deserve it you always do a goodjob in doing your vids :)
Your explanation (and use of images) made understanding this subject so much easier. Thank you.
my god, I swear this is the best youtube channel I've ever come across. Keep up the amazing work! :)
The best video in the RUclips which I have already seen about this book.
A fantastic summary. You are very talented at summarising complex areas in easy to understand terms. Thank you for creating and sharing this.
Huge fan of this page! Your videos are a must before making any investment book purchase. I just recently began my investment journey and there are so many books to sort through. Your videos help minimize the list. I’m grateful. Keep up the good work.
Cheers Franck! Glad that you find the channel helpful :)
Thanks for your work, you’re videos are awesome and interesting!
This just reaffirmed that I think in pictures. I struggle(d) with these ratios but watching your videos, completely made me understand these. (And I am really good at analysis). I don't even know how I made it out with a Finance degree lol! But I sure struggled (first option was Med....so...) Anyway. These are great. I am going to binge on all of them and will come out with a 'beware' sign. Game is on!
Extremely intriguing as usual ! Thanks !
Rhys Martins, thank you, I'm very glad to hear it! 😁
Thanks for Uploading! Can't wait to read it!
Ty. I'm learning a lot from your channel. This video helps so much.
Thank you for providing these great summaries! The visual representations are very helpful to focus. Keep up the great work!
This is one of those watch a few times videos.
Great video explaining things in simple language
Qualitative filters = investigative journalism on the company you want to invest in, Quantitative = No hanky pinky in financial statements. Nice job Swedish Investor!
This is the most intresting video , loved it !!!!
loved the intro! 😆 another fantastic video!
Great work. Really appreciated the knowledge! 👏🏼
Investing is the online way I can keep on dancing and making money on the side. Thank you for this video, it helps a lot!
Hi Swedish Investor, I like your channel very much, as I am also interested about investing.
You are excellent in summarising best books of this field. Keep it up.
Subrata Dutta thank you for these kind words! 👍 Glad if I can help, and perhaps inspire some too 😊
Very impressive explanation.
This video explained balance sheet better than my university lecturer. Thanks!
Simply amazing!!!!
Thank you.
Your videos are very educational. Great job!
Thanks. Really love your step by step explanation.
Kindly share.links to the books
Wonderfully funny and informative video!!! Love it.
(Just one thing: Please revise the P/B part.)
Thank you brother
Thanks for video and link to more
Great video!
Great video and a great book!
Nice one SI. Am enjoying your videos a lot. very helpful.
🌟
It's worth subscribing this. Keep up good work
Thank you
Your channel is awesome.....Thanks lot
Thanks
Wonderful
For those who are confused about "-B" at 3:23, it means literally remove the letter "B" from "EBIT". Took me a while to figure that out...
gr8 job thanks
Thanks sir
This is gold. Thx a lot
Can you also do a video on how you pick a particular stock and what things you looked for using a hybrid of all these approaches that you learnt? That would be a great learning for most of us I think - finding our own way to do this.
Great vid!
Great!!
This is great
Very good and informative video for investor, thank you!
Hung Huei Tiong, that is great to hear. Thank you for your support! 🙌
@@TheSwedishInvestor I have been investing in Share Market for 19 years, yet still find your video very informative. It is your hardwork, indeed.
You've been there for longer than I have! Glad that I'm able to deliver some value, even to someone with that kind of experience 👌
Great video. 🦦
thanks sir you are doing a great job,,
Dhaval Pingulkar, thank you! 😁👌
Great analysis and summary of Ben Graham's financial statement analysis methodology.
Liked! Subbed!
Wonderful! 🙌😁
I'm miss Anna Antwain Origin from Ukraine Please I want you to assist me in investing a total amount of ( **** ) which I inherited from my late parents I lost my parents during this war going on over here in Ukraine, I am 22years old I am seeking for your assistance I have no business idea, I would like you to help me get this fund invested in your country while I will come to stay with you and continue my education in your country.
What a great way of EXPLAINATION, step by step in boxes.
Can u please also make video on
EDUCATION OF A VALUE INVESTOR by GUY SPIER [ no one had explained it clearly, could you explaine it in easy way like this ]
Thanks
Great videos man, now I never have to read again! Kidding, but great job!
GREAT VIDEOS!
Great to hear that you enjoyed it José Francisco Jimenez 🙌
Golden!
Awesome
Imagine you are me. Having an academic in accounting and finance. Studying for CPA exam to get my title and still suck at this😂😂
same here hahahahaha
Hello bro😅 that's funny
Where are you from bro?
Lol this comment is funny but true memorizing ratios isn't something I mastered neither.
@@joeblack1490 where are you from?
Great video Swedish investor, thanks for your amazing video =)
Great book on balance sheet. Master it.
Cheers Vibetrading! 🙌
Thanks!
😁
4:26 I didn’t expect that.
chia sẻ đơn giản, dễ hiểu!
this is why I always take intangible assets off my analysis.
at 10:00 how do I know if all the assets is bloated or not if I want to calculate the book vaule?
I love the illustration. Do you draw all those pictures and what software do you use?
I was not such a big fan of this book. I still own it and it is still on my shelf. I liked the rapid interpretation of financial statements by marry Buffett better. Felt like it taught the subject a lot easier and better.
On that note, I also do not like or pay much attention to intangible assets unless the company is a massively well known company with a massive MOAT. Outside of that, I could care less about it. I try to find the meat and potatoes which is the actual stuff that matters. Good review though.
What program do you use to create your videos/illustrations?
1:18 Wouldn't that be zero companies? A company jingle is an internally generated asset that can no longer be recognised on the balance sheet under US GAAP. The book was probably written before this change in accounting standards though.
How is this channel not more than a million subscribers?
Becarful and vigilant reply on WhatsApp only ;;;;;+;;;;1;;;;;7;;;;6;;;;2;;;;2;;;4;;;;8;;;;2;;;;3;;;;;2;;;;;0"";??
which book is better this or the one with "warren buffett and the interpretation of financial statements"?
can you make a vid about methods on analyzing the qualitative characteristics of companies?
The black magic of balance sheets and income statements.
Love these videos!
Quick question: Do you use some kind of program/website for the visualisations?
Price to book is price / shareholders equity
Can you go through these strategies with a P&L statement?
What software are you using to create these videos? Very nice 😎
According to take away 3 we should take a company in consideration which have more revenue than assets ,But it shows that it requires less capital to generate more revenue, eg see's candy 🍬🍬
What exactly is the book value? You said it's either the Sum of Assets OR the Sum of Liabilities. I'm a bit confused. Thanks!
Can you teach where to find annual report as well?
There is more of this in Good cheap stock
4:01 - those intangibles :D
3:23-3:27 Lol :D Precious, I never thought stocks can be so funny x)
Love it, thank you! 🙌
What is the normal standard returns yield on 1 lac or 2 lac investment?
What is the minus before ? ty ?
Great video! Thank you so much for all the work! You might want to check the pronunciation of "fun"damentals :-) Thanks again
Haha, I appreciate it, I'll work at it 👍
10:00 book value
As far as i know, book value should be equal to shareholder's equity or the difference between assets and liabilities. Your definition of p/b ratio ignores the debt of the company as it only has assets as the book value.
Do you have this in PDF?
I come from the security analysis video after struggling to understand the book by myself, then I have to put the Intelligent Investor video on queue after also failing to undestand the book fully and I also have to put the Common Stock and Uncommon Profits on the whatchlist after the mention on the video. This journey keeps getting larger and larger ain´t it, welp, guess I better get to work right?
Haha, I love it Gengarin! 😂
I'm miss Anna Antwain Origin from Ukraine Please I want you to assist me in investing a total amount of ( **** ) which I inherited from my late parents I lost my parents during this war going on over here in Ukraine, I am 22years old I am seeking for your assistance I have no business idea, I would like you to help me get this fund invested in your country while I will come to stay with you and continue my education in your country.
Why is a 5% net margin for a health tech firm bad and for a distribution firm good? What variables of a firm does one use to decide whether a high low net margin or a high net margin is good or bad?
How can one assess whether the P/B Ratio is good or not? How you refer to in the video, Mr. Swedish Investor, sir, a money bank may have a low P/B Ratio while a consulting firm has a high P/B , what decides if either is good or bad? What elements of the firm's industry decide whether it's good to have low or high P/B and do you have any guidelines for reasonable p/b ratios for industries?
This focus on the analysis of a company’s balance sheets, operations and competitive value as the method of determining the future value is the wrong approach to take, it’s much better to analyse the market price curve and try to figure out some sort of mathematical property that will let your predict the future.
Hi. I like your video’s and subscribed your channel. Could you please make a review of book “Security Analysis” by Benjamin Graham? Thanks.
Wonderful to hear M Hoque! Glad that you like it! Security Analysis will come, be sure to stay tuned for it! 👌
Would you be able to do a more in-depth video about the P/B Ratio. Google says a fair number is between 1 and 3, but whenever I assess different companies I'm getting numbers from 10 right up to 95.
I am not sure if you are still interested but using a discounted cash flow approach would be better for making investment decisions.
As far as book value is concerned, P/B's are typically lower for banking stocks, metal stocks, etc. While it is higher for high-growth companies, IT stocks, etc. So, a fair number would be dependent on the industry and the company's peers. A ratio below 1 is extremely undervalued provided the figures are stated honestly in the balance sheets and the business is profitable.
Stumbled upon this channel by chance. Great videos for finance fundamentals! Which software do you use for creating such animations?
do intangible depreciate?