Quality companies, buy at good value, hold forever

I feel like this is one of those “ teach a man to fish” moments. Thanks a bunch Chuck for taking the time to spell it all out! 🙏

Looks like mpw has started the turn around. Thanks for the good call

You may want to consider updating the nickname of Mr Valuation to Professor Valuation after this one. Video editing has improved considerably, thanks as always

Great video Chuck. These tutorials that you put up are priceless. Please keep doing them!

Thanks for your important lessons, Mr. Value!

Thanks Chuck much needed content for beginner investors like me please please continue this series!

FAST is something you have distributed to us, Chuck. It's more that any margin of safety, any potential growth, and any, ANY other potential benefit that one may have of individual investment. Be healthy, be strong.

Excellent explanation of the underlying basis of equity valuation. The similarities to bond valuation are underappreciated. I wonder about the history of the early dominant industrial behemoths, Standard Oil, US Steel, Vanderbilt Railroads. To come to such market domination, they must have had explosive growth at one point. Did Graham ever comment on that?

Thanks Chuck!

Excellent lesson and insight to investing the right way! I look forward to part 2 & 3 as well as all of your videos.

Outstanding logic and presentation!

Thanks Chuck, very informative!

Many thanks for this instructive video.

Thanks Chuck. Good stuff.

Well done

Great video, cant wait for the other two to come out.

“An investment operation is one which, on thorough analysis, promises safety of principal and a satisfactory return. Operations not meeting these requirements are speculative.” That principal will never change.

Thanks Charles! Can you review Cocoa and relatable companies?

thanks Chuck

would love a transcript of this vid, so I can re-read and make notes as your teachings sink in.

@rosalieroku3818

4 ай бұрын

Transcript is available at the bottom of the Description section. Auto generated by youtube

@bldrmtnman

4 ай бұрын

@@rosalieroku3818 when I click on "show transcript", KZread doesn't show any transcript, but jumps the view up to the video, not showing any sign of the transcript. Perhaps, there is some setting that I don't have set properly to allow the transcript to display. If you have any suggestions that would be helpful, I would appreciate it.

@rosalieroku3818

4 ай бұрын

@@bldrmtnman hmmm, I'll try to take a look. When I pressed the "show transcript " button it just came up.

@rosalieroku3818

4 ай бұрын

@@bldrmtnman I just tried it. The first time it just spun and did nothing. Then I tried again and it loaded. It's flakey, try fiddling around. Maybe try the app or the web page.

I call it " mean reversion value investing ". When I purchase a stock I set a target price and when it hits that price I sell. Been investing seriously for about 4 months and have an annualized return of 101 percent. Definitely been very lucky and know this rate of return will never last. MPW, HIW, and ADM have been my top earners. Dividends are just icing on the cake. I use fastgraphs daily kind of as a retirement hobby.

💫

I wonder what value Ben Graham's formula would put on Trump Media & Technology Group Corp. (DJT) Stock, 50 cents a share?

@ChuckCarnevale-yh2ot

4 ай бұрын

Doesn't apply to those kind of new companies need 5 or growth

@paoloberto5877

4 ай бұрын

A company with no positive earnings made by a criminal who has a consistent history in bankruptcy? Let me think…

Do you have an idea of what Warren Buffett's "secret stock" might be? Ishfaaq Peerally made a video about why he thinks it could be PayPal. It's in the financial sector for sure.

@FASTgraphs

4 ай бұрын

No, other than I don't think Warren Buffett is actually making the decisions today. I think his minions are.

I read again The Intelligent Investor recently. Just two decades in his adult life had stocks higher average PE than 15. When he first wrote his book stocks had PE 6 if I remember correctly. We live in a completely different investing world than Graham. Stocks still tracks EPS but at different PE multiples. Junk these days is priced like top quality company in Graham's days. Sad reality.

@FASTgraphs

4 ай бұрын

Yes it is a different world in the video cover that extensively if you watched it all the way through. Nevertheless, the grahams formula still as the video points out works extremely well for slow-growing companies that were the norm doing Ben Graham's investing career. Regards, Chuck

Chuck, I have an issue about my subscription. I bought a lifetime subscription and your site won't let me in, untill I give it my credit card information?? WHY? Is your difenition of a lifetime different than mine?

@FASTgraphs

4 ай бұрын

Contact support: support@fastgraphs.com

In my opinion, the most common mistake value investors make is being too doctrinaire about valuation.

@ChuckCarnevale-yh2ot

4 ай бұрын

That's a mistake

@FASTgraphs

4 ай бұрын

Price is what you pay value is what you get today there are too many geniuses in a bull market

@Cap_management

4 ай бұрын

The most common mistake is to think that value company is company with low PE. While true value company is growing company sold at a reasonable PE(known as GARP investing). The most common mistake is to differentiate between growth and value stocks as if they are two different groups. If you understand this principle than you will know why "value" ETFs have always so bad long term returns. They buy cheap PE stocks which, as a group are junk, indebted and non growing companies.

@ChuckCarnevale-yh2ot

4 ай бұрын

Low PE alone is not what makes a value stock. A low PE with strong fundamentals that imply a higher valuation with Mr. Market mis-appraising the value is a value stock. The PE is relative not a stand alone measure.

first

Hope you don't mind Chuck, if so delete the comment. I found in your guides the following info, which I thought was great and printed out for myself. The P/E Ratio - Definitions: The P/E Ratio can be defined in several ways, with each definition adding insight to its significance. The simplest definition is simply the price of the common stock divided by its earnings per share. This is a basic mathematical definition expressed as follows: PRICE/Earnings = P/E Ratio. FAST Graphs™ uses essentially three formulas to determine the intrinsic value of a business. These consist of two widely-accepted formulas, and the third formula is an extrapolation between the two. GDF - Formula #1: = 5% or less per year This is Ben Graham’s famous formula for valuing a business and is used for companies with earnings growth of 5% or less. This is the basic formula: V*= EPS x (8.5+2g). When this formula is utilized we designate it as such to the right of the graph in orange letters GDF, which stands for Graham Dodd Formula. This formula will compute a minimum P/E of 8.5 and maximum P/E of 18.5 depending on the growth rate of the prospective company (0% to 5%). However, for consistency, FAST Graphs caps the P/E ratio to 15 when utilizing this formula. P/E=G - Formula #2: = Greater than 15% per year Our second formula is the classic P/E=G (P/E equals earnings growth rate) and when this formula is used it is designated in the orange box P/E=G. This formula is used for faster growing companies showing earnings growth of 15% or better. GDF…P/E=G - Formula #3: = Between 5% - 15% growth per year Our third formula is designated GDF…P/E=G which stands for Graham Dodd Formula-P/E equals growth, to distinguish it from the other two. This is an extrapolation between the pure GDF and P/E=G. This formula is used for companies growing earnings of 5% to 15% (5.01% to 14.99%). This represents a range that the average company falls in. Therefore, when this formula is used, a straight 15 multiple (P/E = 15) representing average will compute. Earnings Yield the Inverse of The P/E Ratio Earnings yield is simply the inverse of the P/E ratio. When you divide the company’s earnings by its price the result is the return that all the company’s earnings would provide you if they were all to be paid to you. These numbers are what a business perspective value investor sees in their mind’s eye when they note a company’s P/E ratio. The following table calculates the earnings yield of various P/E ratios: P/E ratio 5 equals earnings yield of 20% P/E ratio of 10 equals earnings yield of 10% *P/E ratio of 15 equals earnings yield of 6.67% P/E ratio of 20 equals earnings yield of 5.00% P/E ratio of 25 equals earnings yield of 4.00 % P/E ratio of 30 equals earnings yield of 3.33% P/E ratio of 35 equals earnings yield of 2.86% P/E ratio of 40 equals earnings yield of 2.5% *the standard for most companies Consequently, when a business perspective value investor sees a P/E ratio for a certain company, they never attempt to argue about or try to speculate about what it ought to be. Instead they simply see it for what it is. Therefore, if that P/E ratio represents too low an earnings yield number, they are simply not interested in investing in that company. Also, they are unwilling to commit the necessary time and effort necessary for thoroughly researching the company as well. Moreover, they are focused on what the business can produce over speculating on what an emotionally driven market may or may not produce.

@FASTgraphs

4 ай бұрын

Don't mind at all, thanks for sharing with the other viewers.