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Company Valuation, Common Sense version

There are many techniques people use to arrive at a definitive company valuation. They carry fancy titles like Discounted Cash Flow (DCF) and employ formulas which make your head spin. Funny thing, though: many people do extremely well without even knowing what a DCF is, or whether it comes with fries. You remember the husband in […]

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Now You Can Evaluate A Company, Part 2

Okay, last week you saw where I start when trying to evaluate a company to invest in: P/E and growth. The mathies among you no doubt began to wonder: hey, is there a way you can connect those two together? There is. Mr. Lynch brought an obscure ratio to the front page: the PEG ratio (PE-Growth). […]

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Evaluate a company

How Do You Evaluate A Company? Step 1

You’ve heard it before: two people stand on a corner and an accident happens. Ask them a few hours later what happened, and you get two very different stories. The young teen tells the story of a hapless young driver getting blindsided by an arrogant driver in a Mercedes, who didn’t want to slow down a little […]

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Some More Moat-ology

Let’s say you’re a company and (this being fairy tale time) very profitable. You roast and sell nice, but overpriced, coffee. What’s the first thing that happens? Competition: someone out there thinks that if you can make money at something, they can just come in and take your lunch away from you. As the acerbic Kevin O’Leary of […]

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More Moat-ology

Last week you learned about the #1 thing top investors look at when they size up a company for investing. If you ever watch the ABC/CNBC series Shark Tank, you will notice it’s the number one thing the sharks look at to decide if they’re going to invest their own money in a business venture. They […]

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