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Don’t you want to earn money without having to work for? Planning to start investing but don’t have enough money? Well, I think share is a great idea. I do believe we can make more out of share just by understanding it in depth. These videos helped me a lot in clearing the idea about share and investment. I’ve made short notes of these videos to help me memorize hope it will be helpful.

1. What is Value Investing?

Course Objectives:

  1. The difference between value trading and valuing investing
  2. The difference between an asset and liability
  3. Who Created Value Investing

2. Value a Small Business like Warren Buffett

Course Objectives:

  1. Describe a small business model
  2. How money flows through a small business
  3. A comparison of a small and large business
  4. How do you value a small business

You’re the owner when you buy share of the business.

3. What is a Balance Sheet and Margin of Safety

Course Objectives:

  1. Understand the importance of a balance sheet
  2. How to determine the equity of a business
  3. Understand a company’s margin of safety
  4. Business value – A comparison of Net income and Equity

How safe is that investment? …off to the balance sheet!

4. What is a Share

Course Objectives:

  1. What is a share?
  2. What is Shares Outstanding
  3. Comparing terminology between a whole business and 1 share
  4. Basic Valuation Techniques for 1 share
  5. Why is Stock investing lucrative

Key Terminology:

Total Revenue: Total money spent by the customers in business (e.g.: ice-
cream stand)
Cost of Revenue: Total cost of revenue (e.g.: ice-cream, employee, rent)
Income Before Taxes: Total Revenue – Cost of Revenue
Net Income or Earnings: Income Before Taxes – Taxes (IMP)
Dividend: Part of Net Income or Earnings that go to the owner or share
holder.
Equity or Book Value: Other part of Net income or Earnings that go back to
the business.
Board of Directors: Representators of Share holders
CEO: Head of the employees, all of whom work for the owners.
Market Price: Price set by the owner to sell the business.
Book Value(Share): Equity (Company)
Earnings(Share): Net income (Company) Also known as EPS, Earning Per Share
Income Statement: Used to find the company profit i.e. net income or
earnings
Balance Sheet: Used to determine the margin of safety i.e. equity or book
value. It gives the idea of what would happen if the business liquidated
right now! i.e. Total Assets – Total Liabilities = Equity
Risk: Market Price – Equity (i.e. The closer the equity is to the market
price, the safer the investment).
Shares Outstanding: How many pieces the company have been divided into.
Share: Business / Shares Outstanding
Three documents that determines the company value: Income Statement,
Balance Sheet and Cash Flow Statement

Share Terminology:

Shares Outstanding: How many pieces the company have been divided into.
Market Price: The price determined for the share.
Earnings (EPS): Earnings Per Share
Book Value: Equity of a share. The money owner would get if the business
gets isolated at the instance.
P/E: The Price to Earning Ratio = Market Price / EPS

For every [[P/E Ratio]] dollars I spend buying this stock, I
should receive 1 dollar in profit a year later.

Emotion trading offers really cheap prices and really expensive prices.

Your job is to always calculate the intrinsic value of the business
regardless of the size, then compare the value to the price it trades for.

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