Most people think you need to understand difficult financial statements in order to make a good investment decision. In this week’s episode, we show how you can value a company with only basic financial understanding, and how to find payback time.
In Episode 45 You Will Learn
- The difference between value investing and Rule #1 investing.
- The simple principles that Warren Buffett and Charlie Munger use to invest.
- The principle of arbitrage.
- How to value a hypothetical lemonade stand using basic financial information.
- How to generate financial statements to value what a company should be worth.
- How to figure out the total value of a company based off of expected cash flow.
- What payback time is and how long you should be willing to wait to see a return on your investment.
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