Preston It's the second time I'm watching your videos, this time I'm writing things down and reading all the comments, description and actually thinking about what I see. So I want to thank you for the hard work put in this videos and for taking the time to make them. You are awesome and explain everything so well that even I can learn. Thanks again, I really hope you had a chance to meet Warren Buffett and he congratulated you for doing this.
There are no words to express how valuable are this lessons.... Thanks fot sharing all this info and for the awesome clarity in which you explain everything.
u guys taking this example too seriously.. can't u guys just have a sense of humour and laugh at Bob Loudly's comment.. geez! he's just trying to make people laugh..
No she's not the winner even though she makes almost two third of what the owner makes. You forgot to factor in TIME. The employee can only get 20$/hr by trading her time with it. That's most she can makes.The owner could have 10 more ice cream stand running at the same time without needing to trade in her time! $200/hr, or even more! Sky is the limit for the owner.
These video you made are gold!!!!!!! I’ve been looking for something like this for a while.I’m so glad I run across these video. You made it so so so simple. Thanks a life time.
It has been about 3 years since I started learning value investing and this video series was my very first material. 3 years later, I still think this series of videos contain excellent information and is a great place to start, or supplement our studying of value investing theory etc. I can't say I'm a great investor or not on only 3 years of results, but I can say I feel like I somewhat understand what I am doing and continued to add to my knowledge of value investing with various other resources. I can at least know what is a very, very clearly good investment and what is very, very clearly a bad investment. It's a start for sure!
Im so excited to be an investor, I will do my absolute best to learn everything I can, Thank you Preston for this eloquent and articulate video, easy to understand, subscribed! Can't wait to see what the investing future brings me in the next coming years!!!
I am brand new to investing and just started learning. This video course is awesome for someone like me because it starts at a level where even with my 0 knowledge I am able to pick up and understand it. Thank you for taking the time and effort to produce it.
Valuing the business is a great starting point for determining the timing of the sale. If the approximate selling price is within the seller's acceptable amount, it's time to start the process. Sellers can get maximum profits for the sale of their business if they create a competitive environment when buyers compete against each other for the purchase. The value of the business is ultimately determined by the amount a willing and informed buyer will pay for the business. Creating a competitive environment, causes the buyers to reach deeper into their pockets for fear of loss. The seller will get better terms as well in a competitive environment.
I came back to watch this video again and I can now clearly understand. After doing tons of research, I can actually understand this a lot better. Even tho it was taught well
This is simple and easy to understand! I have been investing in stocks and ETFs for almost a year but my friends aren't interested. I think these videos might change their mind!
This is God's work. I'm currently reading The Intelligent Investor and Poor Charlie's Almanak, these videos are helping me put things into perspective to a great degree; God bless you. My first run through Graham's book had me feeling like I was reading hieroglyphics but it's a lot smoother now. Thanks for this.
The magic happens 13:18:00 the amount of money you pay, related to the return you will get back. In the example to get $20,000 annual. If you pay 400,000 you will get back 5% of your investment 200,000 you will get back 10% 100,000 you will get back 20% so do you rather get 5% back or 20%?
Preston, Great video, In minute 14:17 the slide says: "Warren Buffett likes to find companies that trade for less than 15 times the earnings" Can you please give an example? Thanks
Here's what I think it means: $20,000 is net income (or earnings) per year, therefore 15 * $20,000 = $300,000 Therefore he's looking for businesses that cost under $300,000 making that net income. (at least from my interpretation, I think it's right.)
#prestonpysh - Your opening stanza under the description of the video shows: Download Preston's 1 page checklist for finding great stock picks: buffettsbooks.com/checklist Isn't it a bit too early for someone to straight away access this PDF? Won't it leave the follower confused, to begin with?
Hi Preston, The videos are highly informative and interesting to learn. Appreciate you for sharing this on youtube. These cover everything from basics to the high-end technical or financial stuff. I have one small concern or feedback - I feel the music at the start as well as the background music is loud and distracting.....and its not melodious either. Except for the videos are wonderful.
Hi Presto, I think its okay, since it plays only for a while at the start/end. The only issue was when the music as well as your audio plays at the same time (when u read/explain the objectives) where I could neither enjoy the music nor focus on your voice. You could either keep music and the slides (with bullet points) or you could just the keep voice (audio) and slides. Otherwise the idea of having light music at the start/end is good and pleasing.
On a profit and loss statement. Technically Net income is before you pay taxes. If you’re investing the net income (before taxes) back into the business its generally tax deductible. As a result you’re reducing your tax liability. If you taking the net income and putting in your pocket then that figure would be subject to taxes.
Great video and very useful tool. The question I have is what is the time frame for valuing the company and it's returns. Or rather over what period of time would you or rather Warren Buffet expect his ROI. Over his life time or over a few months? I know he is a buy and hold value investor so wouldn't his evaluation for his return be over at least 10 years? Your thoughts
Hello Preston, Kudos for the amazing work you are doing. I got a question, you mentioned "Find Companies that trade for less than 15 times the earnings", I want to understand here that trading price for a company would be mentioned in few dollars per share whereas the earnings of any company would be in thousands/millions of dollars, so how can we determine the companies that are trading for less than 15 times the earnings.
Earnings of a company are usually denoted in Millions. So the key is to divide the earnings of the company by the total number of outstanding shares to arrive at the earnings per share!! In case the earnings is 10 million and the total shares outstanding is 2 million it would make the earnings per share as $5. So now you can calculate the price to earning ratio!!
Thank you! very helpful. Question: So what's the reasonable rate to pay for a business? Also, What changes when the owner works in the business? does he get a regular wage?
Great video! I'm working my way through the lessons and I'm learning a lot of useful information. I have a question about the statement at the very end of the video. "Warren Buffet likes to find company's that trade for 15 less than their earnings." How do I calculate something like that if I'm trying to compare company's and what they are trading for compared to their earnings. Any help would be great
But why would someone want to pay more for a smaller percentage return? And in the end, if you are making the 20k then won't you want to pay lesser so that you get a greater share of your money back? I'd appreciate help. Thanks
I haven't yet gone into your next lessons yet, so it might be a bit redundant. Just wanted to know on what basis did you make those valuations of 400k, 200k and 100k for the business?
When you say Mr. Buffet likes companies that trade for less than 15% times the earnings is that the earnings per share? Also, where do you find the earnings on MSN money. Thanks for a great video!!
would it be wrong to assume that the price paid is for ownership of the business for more than an year and return would be for the whole duration and upon sell the asset would have appreciated?
+Ian Njoroge Not at all. That is called total return which is fine. But not every company pays shareholders dividends on profits each year so the only way to achieve a return is for earnings to rise over the ownership period which allows new buyers to pay higher price than you to obtain ownership for themselves. The difference is capital gains.
I've heard that the key ingredient in becoming wealthy through this is time. So is it too late for a 32 yr old to start doing this? How long could one expect to be wealthy from this if he started at 32? Loving the video's by the way. Very easy to understand. Thank you
No. 35 was the age being highlighted as over the hill in entrepreneurial terms! A research shows that not only do more older people start businesses but also that businesses started by older people are actually more successful on average. A lot of elders starts in old age. A saying is made real life starts 40. To answer your question, it will take time depends on how you work hard on it. So how long will it be probably? That my friend I cannot answer, but lemme give you alternative, read a book a week, watch this kinds of videos, do something, be optimistic in the future, fix your mindset,, some entrepreneurs started in the old. Older than you! 60+, Millionaires and Billionaires. Now, don't ask WHEN would you expect to be wealthy. WHY is much more important. The BIGGER THE WHY, THE EASIER THE HOW.
Can the owner also put the net income back in the business by way of paying down the debt? Would that be MORE important to increase the equity in the business?
Yes! Paying down debt will invariably lead to an increase in equity! Even though this is not directly reinvesting it back into the business it still ads to it's worth!
Hi i bought your books, and they are providing me so much information, tx so much! i have a question, i was trying to download the "Download Preston's 1 page checklist" that appear in this video description and the link is dead? tx
I calculated the rent ($10 an hour*24 hours in a day*30 days in a month). This doesn't make sense to me because that $7200 a month rent for a small ice cream shop is crazy.
So you know ice cream shops that are open 24 hours? If you calculate only business hours (which are the only ones where there's US$100 revenue as well), it makes more sense. Anyway, it's just an example.
Thanks Preston. Can I ask a stupid question. Is net income the same as net profit/loss? When a company announces its quarterly results, the net profit/loss they talk about is the net income after tax?
![Blox Fruits Dragon Rework Update [Full Stream]](http://i.ytimg.com/vi/EqDAp8udhm0/mqdefault.jpg)
I liked you made this video as if you're teaching a 10 year old. Very simple and understandable.
I'm not 10 so it's painfully boring...
@@joiehelianth5196 i am 9 and its too difficult for me
@@Pisauce am 13 and just became a billionaire
Preston It's the second time I'm watching your videos, this time I'm writing things down and reading all the comments, description and actually thinking about what I see. So I want to thank you for the hard work put in this videos and for taking the time to make them. You are awesome and explain everything so well that even I can learn. Thanks again, I really hope you had a chance to meet Warren Buffett and he congratulated you for doing this.
Likewise.
thank you so much for breaking this down. i've never quite understood the real meaning of those terms till now
There are no words to express how valuable are this lessons.... Thanks fot sharing all this info and for the awesome clarity in which you explain everything.
A perfect balance of jargon and simplified explanations.
You made it so easy. May God bless you, AMEN. 🙏
The real winner here is the employee that makes 20$/hr at a small icecream stand.
Bob Loudly man your fucken stupid
u guys taking this example too seriously.. can't u guys just have a sense of humour and laugh at Bob Loudly's comment.. geez! he's just trying to make people laugh..
very hilarious Bob.. laughed so much when i saw this comment
En TraVest Thanks, man; I appreciate it xD
No she's not the winner even though she makes almost two third of what the owner makes. You forgot to factor in TIME. The employee can only get 20$/hr by trading her time with it. That's most she can makes.The owner could have 10 more ice cream stand running at the same time without needing to trade in her time! $200/hr, or even more! Sky is the limit for the owner.
This is everything I was looking for in a beginner level course. Thank you so much!
You have moved me to the next level in my understanding of stocks. Thanks again 1000x
These video you made are gold!!!!!!! I’ve been looking for something like this for a while.I’m so glad I run across these video. You made it so so so simple. Thanks a life time.
I'm amazed at how clear these lessons are! I'm not used to this in the finance space. I got here from the Kindle book. Thank you so much.
It has been about 3 years since I started learning value investing and this video series was my very first material. 3 years later, I still think this series of videos contain excellent information and is a great place to start, or supplement our studying of value investing theory etc.
I can't say I'm a great investor or not on only 3 years of results, but I can say I feel like I somewhat understand what I am doing and continued to add to my knowledge of value investing with various other resources. I can at least know what is a very, very clearly good investment and what is very, very clearly a bad investment. It's a start for sure!
Preston should have continued with teaching, you are the best teacher
this is very helpful! ive been watching all the lessons and its explained so easily! thank u.
Im so excited to be an investor, I will do my absolute best to learn everything I can, Thank you Preston for this eloquent and articulate video, easy to understand, subscribed!
Can't wait to see what the investing future brings me in the next coming years!!!
Apollo make any good investments 6 months on?
3 years lol
I am brand new to investing and just started learning. This video course is awesome for someone like me because it starts at a level where even with my 0 knowledge I am able to pick up and understand it. Thank you for taking the time and effort to produce it.
God bless you Mr. Preston Pysh. I love you for sharing knowledge.
amazing set of videos...there's nothing that can get better than this..
Valuing the business is a great starting point for determining the timing of the sale. If the approximate selling price is within the seller's acceptable amount, it's time to start the process. Sellers can get maximum profits for the sale of their business if they create a competitive environment when buyers compete against each other for the purchase. The value of the business is ultimately determined by the amount a willing and informed buyer will pay for the business. Creating a competitive environment, causes the buyers to reach deeper into their pockets for fear of loss. The seller will get better terms as well in a competitive environment.
I came back to watch this video again and I can now clearly understand. After doing tons of research, I can actually understand this a lot better. Even tho it was taught well
This is simple and easy to understand! I have been investing in stocks and ETFs for almost a year but my friends aren't interested. I think these videos might change their mind!
Explained so clearly and simply. Thankyou so much for the knowledge.
This is God's work.
I'm currently reading The Intelligent Investor and Poor Charlie's Almanak, these videos are helping me put things into perspective to a great degree; God bless you.
My first run through Graham's book had me feeling like I was reading hieroglyphics but it's a lot smoother now.
Thanks for this.
great video, clean,clear and easy to get first time round. great job
"Warren Buffet likes to find companies that trade for less than 15 times the earnings". Great Video
I really want to thank you for taking your time and create theses very helpful videos you have. There are very helpful for entry investors.
The magic happens 13:18:00 the amount of money you pay, related to the return you will get back.
In the example to get $20,000 annual.
If you pay 400,000 you will get back 5% of your investment
200,000 you will get back 10%
100,000 you will get back 20%
so do you rather get 5% back or 20%?
Preston,
Great video,
In minute 14:17 the slide says: "Warren Buffett likes to find companies that trade for less than 15 times the earnings"
Can you please give an example? Thanks
Here's what I think it means:
$20,000 is net income (or earnings) per year, therefore 15 * $20,000 = $300,000
Therefore he's looking for businesses that cost under $300,000 making that net income. (at least from my interpretation, I think it's right.)
Kiwi nerr
Pretty sure he's just referring to the P/E Ratio
@@Kiwinnit earnings are 20k for the year, So 20k x 15=
@@ireneburns5135 nerr, thats an answar??? Shit!
Watching in 2020... thank you!
#prestonpysh - Your opening stanza under the description of the video shows:
Download Preston's 1 page checklist for finding great stock picks: buffettsbooks.com/checklist
Isn't it a bit too early for someone to straight away access this PDF? Won't it leave the follower confused, to begin with?
straightforward and easy to understand
but we should also check for the equity it is trading for or to take the projected earnings in the future?
Hi Preston,
The videos are highly informative and interesting to learn. Appreciate you for sharing this on youtube. These cover everything from basics to the high-end technical or financial stuff. I have one small concern or feedback - I feel the music at the start as well as the background music is loud and distracting.....and its not melodious either. Except for the videos are wonderful.
Amazing Content, Can't believe this is free
Preston, great training videos, excellent teaching techniques. I am watching them a second time. Really good stuff !!!!
Really good straight forward overview ... thank you for taking the time to post and share ...
I liked the way you teaching ❤️❤️
Mate you're awesome. Very clear and concise. Thank you.
Nice soundtrack! Great value!! Thank you!!!
Best videos on RUclips am learning from them ! TY
This series is amazing. Thank you for sharing your insight with the world
thank you for taking the time to make these i really appreciate it
That was super!
Can you do something like this if i want my business to franchise? How to value my francise business. Thank you.
Hi Presto,
I think its okay, since it plays only for a while at the start/end. The only issue was when the music as well as your audio plays at the same time (when u read/explain the objectives) where I could neither enjoy the music nor focus on your voice. You could either keep music and the slides (with bullet points) or you could just the keep voice (audio) and slides. Otherwise the idea of having light music at the start/end is good and pleasing.
Hey preston, do a video on divident, its certainly underrated topic in value investing, so you should do one!!
Nice, it is pretty well explained. My second video till now, I was taken notes and following by doing my own calculation. Crystal clear :)
You're an absolute legend!
the income-before-taxes to net income is corporate tax, and than from net income to your personal wallet (dividends) is income tax?
Thank you Sir. Fan from Singapore
Dope channel!! Subscribed. ✊💸💸💸💸💸💸
These are very good videos, appreciate your hard work!
a super awesmome clear lesson
On a profit and loss statement. Technically Net income is before you pay taxes. If you’re investing the net income (before taxes) back into the business its generally tax deductible. As a result you’re reducing your tax liability. If you taking the net income and putting in your pocket then that figure would be subject to taxes.
How to calculate the free cash flow for this business? would it be equal to the net income? Or is this business model to simple to calculate it?
For this simple example they would be one in the same
Great work. A question. Can the owner Nancy put before tax earning back to the business? Thanks.
Thanks, that helps a lot, you make great vids that are easy to understand
Grear video, you sound like the guy that teaches on the DAW REASON.
Whant an excellent quote. Incredibly inspirational for sure!
Excellent Video, made me think, thanks
thank you very much!!!!!!!!outstanding explanation!!
Thank you for great content!
Terrific--engaging and accessible!
Great video and very useful tool. The question I have is what is the time frame for valuing the company and it's returns. Or rather over what period of time would you or rather Warren Buffet expect his ROI. Over his life time or over a few months? I know he is a buy and hold value investor so wouldn't his evaluation for his return be over at least 10 years? Your thoughts
Hello Preston, Kudos for the amazing work you are doing. I got a question, you mentioned "Find Companies that trade for less than 15 times the earnings", I want to understand here that trading price for a company would be mentioned in few dollars per share whereas the earnings of any company would be in thousands/millions of dollars, so how can we determine the companies that are trading for less than 15 times the earnings.
Earnings of a company are usually denoted in Millions. So the key is to divide the earnings of the company by the total number of outstanding shares to arrive at the earnings per share!! In case the earnings is 10 million and the total shares outstanding is 2 million it would make the earnings per share as $5. So now you can calculate the price to earning ratio!!
Thank you! very helpful.
Question: So what's the reasonable rate to pay for a business? Also, What changes when the owner works in the business? does he get a regular wage?
Great video! I'm working my way through the lessons and I'm learning a lot of useful information. I have a question about the statement at the very end of the video. "Warren Buffet likes to find company's that trade for 15 less than their earnings." How do I calculate something like that if I'm trying to compare company's and what they are trading for compared to their earnings. Any help would be great
But why would someone want to pay more for a smaller percentage return? And in the end, if you are making the 20k then won't you want to pay lesser so that you get a greater share of your money back? I'd appreciate help. Thanks
I love you man! Thank you for this.
So the business is owned by an equity, while the owner is a director or shareholder and gains dividends from the net income after tax.
I haven't yet gone into your next lessons yet, so it might be a bit redundant. Just wanted to know on what basis did you make those valuations of 400k, 200k and 100k for the business?
When you say Mr. Buffet likes companies that trade for less than 15% times the earnings is that the earnings per share? Also, where do you find the earnings on MSN money. Thanks for a great video!!
Outstanding video 👌👌 👌
Thanks for that, really well laid out and easy to understand!
I wish you were my professor in any class! I grasp everything you say so easily
wow!!!! basic and yet powerful
how do you determine the earnings from the net income and value?
Nice Video but you didn't explain how he comes up with a specific price per share.
Nice explanation, subscribed!
would it be wrong to assume that the price paid is for ownership of the business for more than an year and return would be for the whole duration and upon sell the asset would have appreciated?
+Ian Njoroge Not at all. That is called total return which is fine. But not every company pays shareholders dividends on profits each year so the only way to achieve a return is for earnings to rise over the ownership period which allows new buyers to pay higher price than you to obtain ownership for themselves. The difference is capital gains.
Superb Teacher. Thankyou so much for your awesome efforts. :)
thanks man..........................
ok, so what is the ideal yield %? at least 50%+?
thanks for this. now rolling on to the next video....
Thankyou so much
Thank you very much! 😑🙏🏼
good teacher
I've heard that the key ingredient in becoming wealthy through this is time. So is it too late for a 32 yr old to start doing this? How long could one expect to be wealthy from this if he started at 32? Loving the video's by the way. Very easy to understand. Thank you
+Bertram Okoro open a spreadsheet and let it calculate for you. ;)
No. 35 was the age being highlighted as over the hill in entrepreneurial terms! A research shows that not only do more older people start businesses but also that businesses started by older people are actually more successful on average. A lot of elders starts in old age. A saying is made real life starts 40. To answer your question, it will take time depends on how you work hard on it. So how long will it be probably? That my friend I cannot answer, but lemme give you alternative, read a book a week, watch this kinds of videos, do something, be optimistic in the future, fix your mindset,, some entrepreneurs started in the old. Older than you! 60+, Millionaires and Billionaires. Now, don't ask WHEN would you expect to be wealthy. WHY is much more important. The BIGGER THE WHY, THE EASIER THE HOW.
Thanks.
Thanks, Its really Help for beginners.
Is that anual EPS or quarterly EPS that Buffet uses?
Bravo! Very helpful!
Thank you.
So what is the business intrinsically worth?
Can the owner also put the net income back in the business by way of paying down the debt? Would that be MORE important to increase the equity in the business?
Yes! Paying down debt will invariably lead to an increase in equity! Even though this is not directly reinvesting it back into the business it still ads to it's worth!
Hi i bought your books, and they are providing me so much information, tx so much!
i have a question, i was trying to download the "Download Preston's 1 page checklist" that appear in this video description and the link is dead?
tx
Thank you for sharing such great data! Greatly appreciated.
this video was very helpful
I calculated the rent ($10 an hour*24 hours in a day*30 days in a month). This doesn't make sense to me because that $7200 a month rent for a small ice cream shop is crazy.
So you know ice cream shops that are open 24 hours? If you calculate only business hours (which are the only ones where there's US$100 revenue as well), it makes more sense. Anyway, it's just an example.
yeah i didn't think of that
my lemonade stand is open 36 hours a day
Thanks Preston. Can I ask a stupid question. Is net income the same as net profit/loss? When a company announces its quarterly results, the net profit/loss they talk about is the net income after tax?
Yes, they are the same thing.