File Size: 341 KB
Print Length: 49 pages
Simultaneous Device Usage: Unlimited
Publisher: Trader University; 2 edition (August 5, 2016)
Publication Date: August 5, 2016
Sold by: Digital Services LLC
Language: English
ASIN: B01JUSNELO
Text-to-Speech: Enabled
X-Ray: Not Enabled
Word Wise: Enabled
Lending: Not Enabled
Enhanced Typesetting: Enabled
Best Sellers Rank: #31,597 Paid in Kindle Store (See Top 100 Paid in Kindle Store) #11 in Kindle Store > Kindle eBooks > Business & Money > Investing > Stocks #20 in Books > Business & Money > Investing > Analysis & Strategy #30 in Kindle Store > Kindle Short Reads > 90 minutes (44-64 pages) > Business & Money
The author sent me a review copy of this book. It was a quick read, but was packed with valuable information.It really didn't have anything to do with Warren Buffet, but was more of a basic primer on how to calculate the value of a stock. According to the book, a great business has five qualitative attributes:1. It's product is not overly complex.2. It has brand recognition.3. It's products don't require a lot of research and development4. The consumer has to purchase the product over and over again (the author is especially critical of car manufactures for violating this rule by making their products last too long).5. The company has significant power to raise its prices without its customers leaving.These are qualitative judgments, which are somewhat vague and could be debated by different investors. But the author also offers ways to quantitatively judge a company's value. He explains how to calculate several different figures using the company's financial statements, and what their significance is. These are:1. The earnings per share.2. The ROE.3. The ROTC.4. The ratio between long-term debt and earnings.5. The amount of stock buybacks and/or dividends.After reading this information, I had one glaring question in my mind: What about the price?!Luckily, the author answered this question in the next chapter, giving some quantitative rules of thumb that an investor can use to determine whether the price of a stock is fair.
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