Thanks for talking about valuation. This is high quality content. Such a powerful line "Not buying greatness due to valuation".... PS: this is my first comment on a YT video ever
I periodically watch this video, just to recalibrate my mind to de-emphasize the valuation mindset and focus on the anti-fragile aspects of the investment. Pure gold, thanks Brians...
This is by far the best investment lesson in all the internet! “What matter is that you buy high quality businesses” and hold them for a long time as long as the the business still executing. Excellent job!!!
Love this video and loved the point about how when not focusing too much on valuation in your videos whenever someone watches an older video they can still learn something valuable. In my case this has been true when watching some of you guys older content. Like your video on Airbnb
Wow. Super super wow!!! Thank you so much guys. It's kinda funny: I found your channel just a couple of days ago; however, over the years, I've gathered all this wisdom from the original sources: Taleb's Incerto, Chris' 100 baggers, Munger's almanack and speeches, etc; and made my own checklist (not so different from yours). It's really amazing to come across this magnificent channel, and particularly this absolutely outstanding video that summarizes all this world-class knowledge in 30 minutes (as the other video explaining the checklist), and realize that there are more experienced and seasoned investors that have followed the same principles many years to date. I have no words to describe all my appreciation. Absolutely brilliant! Thank you Brians!!! ✌🏻👏🏻🍀
This is the most refreshing and enlightening finance video I've seen. Makes so much sense. Appreciate your insight on how you value fledgling companies.
EASILY one of the most profound videos on valuation in the tech/digital age… didn’t know I needed this to reaffirm my own approach. Guess the conclusion is “optionality in stock markets”
Hope you enjoyed the video! If you are confused by anything you heard, Brian and I are launching a LIVE course on how to read financial statements. Interested? Details found here: maven.com/brian-feroldi/
Gosh, you guys are amazing. So clear and to the point.. I am a super big fan. Anyone has impressed me after Warren Buffet and Peter Lynch, it is you guys! Keep making all videos. I am running through all of your old videos.
Great video, totally agreed. Why value investing is out is because great growth companies grow at only 10-20% in old days. But thanks for technology now great growth companies grow at 50-100%. It can easily "grow into" the high valuation
I’ve just joined The subscription group and I see so much value that I just want to say thank you guys for all the hard work Brian if you would think Brian who contribute to so much quality information. I would love to get some insight and thoughts on Cardano, ADA!
You guys are invaluable (pun semi-intended). As a beginner investor I need to keep watching your videos to stay on track during this volatility (I couldn’t have entered at a worse time and I’m down about 30-40%). I subscribe to Motley Fool and their picks have absolutely killed me but I’ll stay the course for now because of the likes of you guys. I like your honesty, your meticulous analyses and thought processes and also your transparency when things are going wrong. I’ll be buying your book!
Great, next-level thinking in this video. Mediocristan, Extremistan, the fractal nature of investing...this is why the Brians are my investing Sherpas. Investing SHOULD be about buying great BUSINESSES. Period. That said, I side more with Brian F on this one: Must be a great business, but valuation does matter. Some. The Nifty Fifty were the great, can't miss, buy at any price businesses of the sixties and seventies. Microsoft, Cisco, Exxon, GE and Intel were the great, can't miss FANG stocks of the turn of the century. In either case, you would have underperformed the market. Great growth companies CAN be had at reasonable valuations. Examples from my own portfolio: AMZN, PYPL, SQ, FTNT, Z, GOOGL, CRM, WDAY, AXON, ZNGA and FB. All are growing revenue at 20%-plus; all can be had for EV/sales of 15 or less. I have no problem paying higher multiples, but when I do I have to feel really, really good that they're going to rack up outlier-sized revenue gains for many years (and that's really, really hard to predict). My best advice: The higher multiple you pay, the more hours of research you should do. Also, don't buy ANYTHING that doesn't score well with the Brians ;-)
Excellent video ! Saw so many value investing videos and they are so focused on valuation, even though the underlying business is not so great! Loved this video. Taught me so much
I believe from the beginning of the theology of Warren buffet was not centered on valuation. It was on MOAT. Valuation is only useful for understanding margin. A famous quote from Warren buffet is "it's better to buy a wonderful company for a fair price than a wonderful price for a fair price". The focus is to first find a wonderful business that you understand with a good business model and wonderful management, it's after all that, that you look to valuation, to understand how much you are willing to pay for the company.
Hey Brian! Stumbled across you on Twitter and now found you here on YT! You and Brian have given me almost as much financial education as I got in college! Scary (for what I paid) but also goes to show there are many different ways to learn as you’ve taught me there are many different ways to invest! Keeps the videos coming! Love them.
Stock price will catch up wth earnings, says a lot for a lot of companies, thank you for this video, great to get another perspective on investing thesis! 😀
Excellent video! I love it. The past half year, however, has shown that valuation sometimes matters more to the market than anything else. And, as Keynes famously said, the market can remain irrational longer than you can remain solvent. Two of the worst things about periods like this are (a) one wonders whether things will ever change and (b) one wonders whether your initial thesis about the company is really right. From an educational perspective, it's very important to talk about (a) how bad one feels during these periods (lots of real emotional pain) and (b) how one deals with this pain and these doubts and concerns as one lives through them.
Great comment Russ! Yes, valuations matter A LOT in the short-term. We made this video to show what we've learned about valuations over time and how much nuance there is to valuation.
Very good point. Have to say I too have been focusing too much on P/E ratings. I will think about how to approach growth companies going forward. Maybe I’ll get some inspiration from your ranking system and adapt it to my needs. Thanks a lot guys!
Thanks guys, really appreciate the breakdown of why you invest the way you do. Probably the most important video to date as it gives the viewers context
Love the content, and I get what you are saying, what i struggle with is not knowing if you are paying a eye watering high valuation and then seeing stock go down or sideways for the next 5 years, when you could have waited for a more fairly valued entry point (and of cause you risk never entering the stock for the same reason)
Recent to the channel but already loving your content. Like Feroldi, I am learning how to deemphasize valuation after passing on $NET at $16 because it was slightly overvalued, and selling $FB too soon for the same reason. Thank you for your contribution and keep on the good work
I loved this video. Thanks for making it. Such a simple tip to just try and make each subsequent purchase at better and better valuations. Waiting for the perfect valuation may be the biggest mistake we can make as investors. And even if the numbers aren't mathematically better the second time around (say the p/s is about the same), there might be something you learn about a company that makes you like it even more, thus increasing your perceived value, which can be helpful to rely on sometimes.
Hi Guys, Great video. Amazing content shared on all your videos actually. Thoroughly enjoying it. A quick question though. May sound too naive as I started investing in individual stocks just last March 2020 downturn by joining motley fool, so many of the same concepts shared there by you 2 and David/Tom etc.. But I am also reading other books trying to find my own journey. One question that comes to mind is whether this method of "no valuation"- has this only worked due to this great bull run we had over last 14yrs? Or really the examples of this "high PE" for quality business has been true for decades? Any sort of data backtesting you have done to build even more conviction in this approach? Thanks
@@BrianFeroldiYT Nope, the Brian's cannot be WRONG!! Haha Fair enough. I think this argument (valuation vs no valuation) will always prevail, doesn't matter what era we speak off. And that's what makes the market. Anyways thanks for the reply and amazing content again. Learning lots through the live stock research from scratch type videos.
You can look at the NASDAQ during 2000 for a quick back test. Just count how many companies are above their 2000 peak. Hint: there are not that many However, if you had amazon among 20 other losers, it would have made up for all your losses and more
Love your videos! Love the Fool. Admire and appreciate the transparency of both. Running near 60% accuracy, but one winner has wiped out all my losers combined. If only I had learned that much earlier.
Awesome video! I think Tesla is still dramatically undervalued if you're holding 10+ years. You have to focus on the energy, AI/tech side of what they do and will offer. Even the arbitrage of auto bidder software. I'm putting this on the internet and my prediction is a decade or more from now the story as a car manufacturer will be analogous to what Amazon was as a bookstore. Because they've had to vertically integrate and pioneer various technology and manufacturing processes we will see a AWS type product which will dwarf auto sales. Tesla will be top three largest companies by market cap by 2030 and a lifestyle brand that many rely on in day to day activities. On the other end of that is the likes of Ford and GM, which will either fade away or be aquired over time. These are not value picks nor should the dividend be enticing. They are a parts aggregator and not an actual manufacturer. This will become more evident over time as technology and the need for vertical integration is deeply necessary to maintain margins and still compete. Dealership models will fade away. Service revenue will also decline due to EVs requiring less maintenance. Between Osborne effect of transitioning from ICE to EVs and vestigial assembly lines and ICE engineers they're already facing huge headwinds. I'll probably ruffle a few feathers here but hey, that means I'm taking the path less traveled and my conviction has unwaived since 2018+.
I have been playing with your reverse DCF. great tool, but I wonder if you would add cash used for buybacks to the FCF and substract SBC from the FCF? thanks
Hey Brians, thank you so much for making this video on the valuations necessity for price analysis, I really agree with you guys a lot, especially for hyper-growth and SaaS businesses, traditional valuation cannot be simply applied. For which other business metrics should be used effectively instead.
Very valid points, well thought out explains and just as The financials are changing in the traditional banking industry so is evaluating companies and stocks P/E!
Looks like you have come a long way sailing in the market... 😁 Looking forward to more quality content... Good going... Thanks for sharing your experience..
It would be great to get an update reflection on the ideas stated in this video. Do you still have the same approach? How did your portfolio perform overall?
Would you have held through 90% draw down of AMZN if you bought in 2000? Instead if you paid a fair valuation price of around say 20$, would you have held? How about buying a great business with all the qualities you mentioned but at a fair valuation whenever it comes and held through instead?
Hi Brian, you guys are great teachers and your videos help me a lot. I was thinking that maybe you should add one more subject to the anti-fragile framework. Perhaps one of the most important would be the competence of management, because only a competent and visionary CEO is able to keep a company growing over the years and under any macroeconomic scenario.
Great suggestion! My framework somewhat accounts for the "competence of management" because it accounts for their track record as a public company. Brian Stoffel believes that is covered completely by the "ownership" section. Thanks for sharing!
Great video Brians! TSLA is a classic for me in terms of being unsure on valuation with so much of its growth built in to its price with its 300+ P/E. Just wondering if you have a preference in terms of companies to invest in within their growth cycles? Judging from your styles I would assume in the early profit stage? Probably when P/Es are positive but at their highest!?
fantastic content i have never been solely about value. for me a company has to shine, with quality and class, then you may find value, go to 2 stores to buy some Jeans, one sells cheap imports, at a bargain price, --- the other sells Levi, Wrangler, Diesel. etc and it's obvious depending on the store you shop at, you are getting what you pay for, you may wait for the store to go on sale but you're still getting what you pay for.. lots of people buy at bottom prices or the so-called dips. Well, I follow the William O'Neil school of thought, why would I want to buy a stock that drops in price? I invest long term, I want companies that are rock solid that are heading to realms of name branding that will be on peoples lips. yep people will disagree but hey i don't care I'm doing ok with my theory
@@BrianFeroldiYT omg i just read back and realized how cocky I sounded, that really was not my intention, and I certainly did not intend to antagonise please accept my apologies and I hope you guys have a really nice relaxed and happy thanksgiving
Shout out from the Philippines! Admire your videos Brians, my question is on the methodology of the scoring, I mean it's hard to gauge when you'll give a full point, when is it a half point or a quarter of a point or a zero? I mean it will again differ from each person right? So sometimes one business will seem anti frigile to one person and not to another......
The answer there is "it depends". The faster the growth, the wider the moat, the larger the opportunity, the better the financials, the more you should pay. When then inverse is true, the less you should pay
Interesting video even though I do not agree with you. Valuation matters a lot. If you completely ignore Valuation, you wont know what you will be paying for a business! You gave example of Amazon, but it was as you mentioned an exception. How likely is it that every other company be as good as amazon? If you had bought companies like CISCO and Intel in the peak of DOT com bubble, you will be at a loss till today! You cannot expect every Company to be as good as Amazon. Value investing is not just a few multiples. You need to look at what kind of Returns is the Business generating on its invested capital (ROIC), Returns on Equity, Return on Assets etc Buying a Stock is not about a Ticker symbol or Stock Price, it is about being a Part-Owner of a business. If you buy a Stock at some outrageous Valuation like TESLA currently, and if for some reason the stock falls in half and stays there for the next 10 years, will you be still holding that stock? I dont think so.
Hi guys, a question here, whats your take on companies that previously considered Blue Chip like G.E and Exxon Mobil, and now no longer in the list? How will they do going through Anti-Fragile screener?
In general, those companies are heading towards irrelevance. They could be turnaround companies, but most likely not. But we don't study them closely enough to know.
"Why don't you guys ever talk about valuation?" We get this question all the time. Now, you know why!
where can we see your holdings?
@@serafeiml1041 boards.fool.com/profile/TMFTypeoh/info.aspx
so basically "valuation" is "over-valued" 😆 i actually agree with your views u guys are brilliant thanks so much!
Thanks for talking about valuation. This is high quality content. Such a powerful line "Not buying greatness due to valuation".... PS: this is my first comment on a YT video ever
We are honored Azhar that you saved your first comment for us!
I periodically watch this video, just to recalibrate my mind to de-emphasize the valuation mindset and focus on the anti-fragile aspects of the investment.
Pure gold, thanks Brians...
This is one of my favorite videos on youtube and I constantly go back and reference it. Has completely changed my investing perspective.
same here
This is by far the best investment lesson in all the internet! “What matter is that you buy high quality businesses” and hold them for a long time as long as the the business still executing.
Excellent job!!!
Thanks Joeury Nunez! Really appreciate that!
This is one of the best videos I've ever watched in years
Wow -- what a compliment!
ABSOLUTELY!
How many times have I watched this investment lessons playlist？ I re-watched these videos every week. The best of the best RUclips Financial channel
If you do not do valuation, how do you know at which price to buy then?
Love this video and loved the point about how when not focusing too much on valuation in your videos whenever someone watches an older video they can still learn something valuable. In my case this has been true when watching some of you guys older content. Like your video on Airbnb
Thanks Mya!
Wow. Super super wow!!! Thank you so much guys. It's kinda funny: I found your channel just a couple of days ago; however, over the years, I've gathered all this wisdom from the original sources: Taleb's Incerto, Chris' 100 baggers, Munger's almanack and speeches, etc; and made my own checklist (not so different from yours). It's really amazing to come across this magnificent channel, and particularly this absolutely outstanding video that summarizes all this world-class knowledge in 30 minutes (as the other video explaining the checklist), and realize that there are more experienced and seasoned investors that have followed the same principles many years to date. I have no words to describe all my appreciation. Absolutely brilliant! Thank you Brians!!! ✌🏻👏🏻🍀
Amazing!! What is more amazing that you are sharing this free on RUclips.
This is the most refreshing and enlightening finance video I've seen. Makes so much sense.
Appreciate your insight on how you value fledgling companies.
I love your videos! Watching in 2022 and they are still relevant! and will be in 2050 as well!
Thank you, Aayush Maheshwari!
EASILY one of the most profound videos on valuation in the tech/digital age… didn’t know I needed this to reaffirm my own approach. Guess the conclusion is “optionality in stock markets”
Appreciate that!
Hope you enjoyed the video! If you are confused by anything you heard, Brian and I are launching a LIVE course on how to read financial statements. Interested? Details found here: maven.com/brian-feroldi/
Gosh, you guys are amazing. So clear and to the point.. I am a super big fan. Anyone has impressed me after Warren Buffet and Peter Lynch, it is you guys! Keep making all videos. I am running through all of your old videos.
Thanks Arsalan Yousuf!
Cannot express how much I appreciate you guys and the quality content you provide.
Great video, totally agreed. Why value investing is out is because great growth companies grow at only 10-20% in old days. But thanks for technology now great growth companies grow at 50-100%. It can easily "grow into" the high valuation
This channel deserves Million+ subs!
Great content. Thanks much for all the value you guys provide.
Wow, thank you!
Love what you are doing. You are my favorite financial channel now
This is the best video I've seen
I’ve just joined The subscription group and I see so much value that I just want to say thank you guys for all the hard work Brian if you would think Brian who contribute to so much quality information. I would love to get some insight and thoughts on Cardano, ADA!
Awesome! Thank you!
You guys are invaluable (pun semi-intended). As a beginner investor I need to keep watching your videos to stay on track during this volatility (I couldn’t have entered at a worse time and I’m down about 30-40%). I subscribe to Motley Fool and their picks have absolutely killed me but I’ll stay the course for now because of the likes of you guys. I like your honesty, your meticulous analyses and thought processes and also your transparency when things are going wrong. I’ll be buying your book!
You guys are so AWESOME thank you!
Our pleasure!
Thanks Brians. Very informative. This is becoming my favorite finance channel.
Wow, thanks!
You guys are doing great! I really learned a lot from this video.
Thanks for watching!
Another great video Brian. Your channel is a hidden gem in the financial world of RUclips. Really appreciate your content!
Glad you enjoy it!
Great, next-level thinking in this video. Mediocristan, Extremistan, the fractal nature of investing...this is why the Brians are my investing Sherpas. Investing SHOULD be about buying great BUSINESSES. Period. That said, I side more with Brian F on this one: Must be a great business, but valuation does matter. Some. The Nifty Fifty were the great, can't miss, buy at any price businesses of the sixties and seventies. Microsoft, Cisco, Exxon, GE and Intel were the great, can't miss FANG stocks of the turn of the century. In either case, you would have underperformed the market. Great growth companies CAN be had at reasonable valuations. Examples from my own portfolio: AMZN, PYPL, SQ, FTNT, Z, GOOGL, CRM, WDAY, AXON, ZNGA and FB. All are growing revenue at 20%-plus; all can be had for EV/sales of 15 or less. I have no problem paying higher multiples, but when I do I have to feel really, really good that they're going to rack up outlier-sized revenue gains for many years (and that's really, really hard to predict). My best advice: The higher multiple you pay, the more hours of research you should do. Also, don't buy ANYTHING that doesn't score well with the Brians ;-)
PS: love the pensive-Feroldi-pose cover photo. When is Stoffel going to mix up his pose? Just kidding. Don't care. Focus on companies, please.
"The higher multiple you pay, the more hours of research you should do." Love that!
Excellent video ! Saw so many value investing videos and they are so focused on valuation, even though the underlying business is not so great! Loved this video. Taught me so much
Glad you enjoyed it!
I really love this channel and feel like I am learning a lot! Could you guys do a stock from scratch for NVDA?
On our list! Thanks for the suggestion Caleb Halleran!
Great video appreciate the hard work you put into this video
probaly the best 30 minutes an investor can spen!
Glad you liked it!
I believe from the beginning of the theology of Warren buffet was not centered on valuation. It was on MOAT. Valuation is only useful for understanding margin. A famous quote from Warren buffet is "it's better to buy a wonderful company for a fair price than a wonderful price for a fair price". The focus is to first find a wonderful business that you understand with a good business model and wonderful management, it's after all that, that you look to valuation, to understand how much you are willing to pay for the company.
Very insightful, I've learned to focus on valuation less and less, but still let it prevent me from buying sometimes, for me it's Tesla
Same here Wei! It's something I've struggled with my entire investing career!
When a company is very unlikely to grow into its overblown valuation, you are smart not to buy it
This is gold... absolutely fantastic material here! Great job guys
Much appreciated!
Bravo! Bravo! Bravo! Such great content as usual. This is priceless.
Wow, thank you!
Hey Brian! Stumbled across you on Twitter and now found you here on YT! You and Brian have given me almost as much financial education as I got in college! Scary (for what I paid) but also goes to show there are many different ways to learn as you’ve taught me there are many different ways to invest! Keeps the videos coming! Love them.
Awesome! Thank you! I l have learned more outside school than in it too!
Stock price will catch up wth earnings, says a lot for a lot of companies, thank you for this video, great to get another perspective on investing thesis! 😀
So much value in this video! thank you for all your hard work
Thanks for wATCHING!
Excellent video! I love it. The past half year, however, has shown that valuation sometimes matters more to the market than anything else. And, as Keynes famously said, the market can remain irrational longer than you can remain solvent. Two of the worst things about periods like this are (a) one wonders whether things will ever change and (b) one wonders whether your initial thesis about the company is really right. From an educational perspective, it's very important to talk about (a) how bad one feels during these periods (lots of real emotional pain) and (b) how one deals with this pain and these doubts and concerns as one lives through them.
Great comment Russ! Yes, valuations matter A LOT in the short-term. We made this video to show what we've learned about valuations over time and how much nuance there is to valuation.
@@BrianFeroldiYTit matters long term as well. If you bought msft in December 1999, you’d have to wait for 17 years to recover your principal!
Very good point. Have to say I too have been focusing too much on P/E ratings. I will think about how to approach growth companies going forward. Maybe I’ll get some inspiration from your ranking system and adapt it to my needs. Thanks a lot guys!
I did the same thing in the beginning, Kenny.
Thanks guys, really appreciate the breakdown of why you invest the way you do. Probably the most important video to date as it gives the viewers context
Glad it was helpful!
Good presentation and reminder to focus on buying good company at fair price or reasonable valuation.
There's no right or wrong answer. Valuation is tricky!
Hey guys, I am new to investing and I love your content. Keep up the good work!
Awesome! Thank you!
Love the content, and I get what you are saying, what i struggle with is not knowing if you are paying a eye watering high valuation and then seeing stock go down or sideways for the next 5 years, when you could have waited for a more fairly valued entry point (and of cause you risk never entering the stock for the same reason)
It's a risk for sure -- the answer will only become obvious in hindsight
@@BrianFeroldiYT too true
Very high quality content. You both are a killer combo.
Recent to the channel but already loving your content. Like Feroldi, I am learning how to deemphasize valuation after passing on $NET at $16 because it was slightly overvalued, and selling $FB too soon for the same reason. Thank you for your contribution and keep on the good work
Welcome aboard!
Gives lot of insight of investing. learned so much!
Glad to hear it!
this is a great video!!!! keep up the great work bro. you could even say your RUclips channel is undervalued, you deserve a lot more subscribers🤣.
I appreciate that!
Thank you brian so much !!
Much Love from Malaysia!!
Keep rocking !!
My pleasure!
Great content and critical thinking guys, much appreciated!
Appreciate that!
Really enjoyed this video. Makes a lot of sense. Keep up the excellent work guys!
Awesome, thank you Jay!
Thank you for Another gem..
Our pleasure!
Valuation is still incredibly important. I don't agree with most of this. But I'm a big fan of your other stuff.
Fair enough -- these are our thoughts. Feel free to disagree!
I loved this video. Thanks for making it. Such a simple tip to just try and make each subsequent purchase at better and better valuations. Waiting for the perfect valuation may be the biggest mistake we can make as investors. And even if the numbers aren't mathematically better the second time around (say the p/s is about the same), there might be something you learn about a company that makes you like it even more, thus increasing your perceived value, which can be helpful to rely on sometimes.
Glad you enjoyed it! Buying at better and better value points isn't easy, but it can be done!
valuation is VERY important.
also future trends, management, TAM, growth etc
To some people, yes. We just wanted to present another side.
Hi Guys, Great video. Amazing content shared on all your videos actually. Thoroughly enjoying it. A quick question though. May sound too naive as I started investing in individual stocks just last March 2020 downturn by joining motley fool, so many of the same concepts shared there by you 2 and David/Tom etc.. But I am also reading other books trying to find my own journey. One question that comes to mind is whether this method of "no valuation"- has this only worked due to this great bull run we had over last 14yrs? Or really the examples of this "high PE" for quality business has been true for decades? Any sort of data backtesting you have done to build even more conviction in this approach? Thanks
That's something to think about -- and we don't have good backtesting data. We reserve the right to be wrong!
@@BrianFeroldiYT Nope, the Brian's cannot be WRONG!! Haha Fair enough. I think this argument (valuation vs no valuation) will always prevail, doesn't matter what era we speak off. And that's what makes the market. Anyways thanks for the reply and amazing content again. Learning lots through the live stock research from scratch type videos.
You can look at the NASDAQ during 2000 for a quick back test.
Just count how many companies are above their 2000 peak.
Hint: there are not that many
However, if you had amazon among 20 other losers, it would have made up for all your losses and more
So so so helpful. Great insight and those charts really help to Crystalize the message 👏👏👏
You are so welcome
Really good lecture. Thanks!
Would be awesome with something similar about when/if you sell/trim your positions :-)
Great suggestion!
Thanks for an another great video. Feel really bad if I don’t press the like button. 😆
😂
Thanks and great content
such a great video, thanks guys!
Glad you enjoyed it Corey!
Terrific educational video, Brian & Brian keep up the great work!
Thanks, will do!
Love your videos! Love the Fool. Admire and appreciate the transparency of both. Running near 60% accuracy, but one winner has wiped out all my losers combined. If only I had learned that much earlier.
A hard lesson to learn!
incredibly useful information, really appreciate sharing this with us
Glad you enjoyed it!
Great video and very informative. Thanks!
Glad you enjoyed it!
Awesome video!
I think Tesla is still dramatically undervalued if you're holding 10+ years. You have to focus on the energy, AI/tech side of what they do and will offer. Even the arbitrage of auto bidder software. I'm putting this on the internet and my prediction is a decade or more from now the story as a car manufacturer will be analogous to what Amazon was as a bookstore. Because they've had to vertically integrate and pioneer various technology and manufacturing processes we will see a AWS type product which will dwarf auto sales. Tesla will be top three largest companies by market cap by 2030 and a lifestyle brand that many rely on in day to day activities.
On the other end of that is the likes of Ford and GM, which will either fade away or be aquired over time. These are not value picks nor should the dividend be enticing. They are a parts aggregator and not an actual manufacturer. This will become more evident over time as technology and the need for vertical integration is deeply necessary to maintain margins and still compete. Dealership models will fade away. Service revenue will also decline due to EVs requiring less maintenance. Between Osborne effect of transitioning from ICE to EVs and vestigial assembly lines and ICE engineers they're already facing huge headwinds.
I'll probably ruffle a few feathers here but hey, that means I'm taking the path less traveled and my conviction has unwaived since 2018+.
It's possible!
One thing that stood out to me , in the context of the Brian's videos is TSLA's optionality
I have been playing with your reverse DCF. great tool, but I wonder if you would add cash used for buybacks to the FCF and substract SBC from the FCF? thanks
Hey Brians, thank you so much for making this video on the valuations necessity for price analysis, I really agree with you guys a lot, especially for hyper-growth and SaaS businesses, traditional valuation cannot be simply applied. For which other business metrics should be used effectively instead.
Glad it was helpful!
Bull market = valuation doesn't matter and everyone is a genius
Very valid points, well thought out explains and just as The financials are changing in the traditional banking industry so is evaluating companies and stocks P/E!
Yup, valuation is tricky!
Love you both! 😘
Thanks Niraj Pavagadhi!
Excellent piece! I learned that lesson too
Rock on!
Nice thougts and really good vibes. Thanks
Glad you enjoyed it!
Looks like you have come a long way sailing in the market... 😁
Looking forward to more quality content... Good going... Thanks for sharing your experience..
Thanks a ton!
Very interesting thoughts, thanks for sharing
Great stuff!!
Glad you enjoyed it
Amazing content. Thanks guys.
Thanks for watching!
It would be great to get an update reflection on the ideas stated in this video. Do you still have the same approach? How did your portfolio perform overall?
Would you have held through 90% draw down of AMZN if you bought in 2000? Instead if you paid a fair valuation price of around say 20$, would you have held? How about buying a great business with all the qualities you mentioned but at a fair valuation whenever it comes and held through instead?
It ain't easy! But that's investing!
Amazing video. Great insight.
Glad it was helpful!
Brilliant !
Thanks!
"Stock price in the long term follow earnings"
100% Benjamin
Hi Brian, you guys are great teachers and your videos help me a lot.
I was thinking that maybe you should add one more subject to the anti-fragile framework. Perhaps one of the most important would be the competence of management, because only a competent and visionary CEO is able to keep a company growing over the years and under any macroeconomic scenario.
Great suggestion! My framework somewhat accounts for the "competence of management" because it accounts for their track record as a public company. Brian Stoffel believes that is covered completely by the "ownership" section. Thanks for sharing!
Great video Brians! TSLA is a classic for me in terms of being unsure on valuation with so much of its growth built in to its price with its 300+ P/E. Just wondering if you have a preference in terms of companies to invest in within their growth cycles? Judging from your styles I would assume in the early profit stage? Probably when P/Es are positive but at their highest!?
fantastic!
Thank you! Cheers!
Learnt a lot. Thanks. SNOW, MU, HITI, TTCF suggestions for your framework videos.
Added!
Great info
Glad you think so!
Hi Brians, thanks so much for your videos. Could you please do a video on Matterport since it’s going to merge with ghvi next week? Thanks
On our list! Thanks for the suggestion Jennifer T!
amazing content
Thanks SET!
Great video! How do you (Brian Stoffel) cope with price falling alot during the stocks Journey if you don't look at valuation?
We have a video coming out about this
Very very good video
Many many thanks
great video guys. you talke about some morgen housel article. i cant find here
Here ya go: www.fool.com/investing/general/2013/01/15/in-hindsight-how-much-should-you-have-paid-for-tha.aspx
@@BrianFeroldiYT thanks chief
fantastic content i have never been solely about value. for me a company has to shine, with quality and class, then you may find value, go to 2 stores to buy some Jeans, one sells cheap imports, at a bargain price, --- the other sells Levi, Wrangler, Diesel. etc and it's obvious depending on the store you shop at, you are getting what you pay for, you may wait for the store to go on sale but you're still getting what you pay for.. lots of people buy at bottom prices or the so-called dips. Well, I follow the William O'Neil school of thought, why would I want to buy a stock that drops in price? I invest long term, I want companies that are rock solid that are heading to realms of name branding that will be on peoples lips. yep people will disagree but hey i don't care I'm doing ok with my theory
To each, his own. This is just our view!
@@BrianFeroldiYT omg i just read back and realized how cocky I sounded, that really was not my intention, and I certainly did not intend to antagonise please accept my apologies and I hope you guys have a really nice relaxed and happy thanksgiving
AQB?
Shout out from the Philippines! Admire your videos Brians, my question is on the methodology of the scoring, I mean it's hard to gauge when you'll give a full point, when is it a half point or a quarter of a point or a zero?
I mean it will again differ from each person right? So sometimes one business will seem anti frigile to one person and not to another......
Of course, that's why you need valuations to protect you from overpaying when you are wrong about your assumptions
can you please elaborate about price to sales and to gross profits around what number should it be relative to growth percentage
The answer there is "it depends". The faster the growth, the wider the moat, the larger the opportunity, the better the financials, the more you should pay. When then inverse is true, the less you should pay
@@BrianFeroldiYT gotcha 😍🔥 thanks boss
Interesting video even though I do not agree with you.
Valuation matters a lot. If you completely ignore Valuation, you wont know what you will be paying for a business!
You gave example of Amazon, but it was as you mentioned an exception. How likely is it that every other company be as good as amazon?
If you had bought companies like CISCO and Intel in the peak of DOT com bubble, you will be at a loss till today!
You cannot expect every Company to be as good as Amazon.
Value investing is not just a few multiples. You need to look at what kind of Returns is the Business generating on its invested capital (ROIC), Returns on Equity, Return on Assets etc
Buying a Stock is not about a Ticker symbol or Stock Price, it is about being a Part-Owner of a business.
If you buy a Stock at some outrageous Valuation like TESLA currently, and if for some reason the stock falls in half and stays there for the next 10 years, will you be still holding that stock? I dont think so.
We don't expect everyone to agree with us. We just wanted to shed some light on another way to think about valuation.
Great content as always! Hope you guys can do a video on $NET soon!
Will add this to our list Alex Tay!
@@BrianFeroldiYT thank you!
Hi guys, a question here, whats your take on companies that previously considered Blue Chip like G.E and Exxon Mobil, and now no longer in the list? How will they do going through Anti-Fragile screener?
In general, those companies are heading towards irrelevance. They could be turnaround companies, but most likely not. But we don't study them closely enough to know.