Compounding Quality on LinkedIn: Peter Lynch is one of the best investors in the world. Here are his 20… (2024)

Financial Modeling 101What's a financial model?A financial model is like a big calculator that helps businesses and individuals plan and make decisions about money. It's a tool that uses numbers to show how things might turn out in the future.Here's what you'll learn:• Basic Guidelines for Financial Models• Revenue and Customer Acquisition Models• Cost of Goods Sold (COGS)• Personnel Costs (SG&A Expenses Part 1)• Other Overhead Expenses (SG&A Expenses Part 2)• Nonoperating Expenses• Common Financial Modeling Mistakes• Balance Sheet• Brief Digression on Cash Flow• Cash Flow Statement• Advanced Modeling Techniques• Expense Checklist Source: Dave Lishego📚 Grab the PDF in high resolution here:https://lnkd.in/dstKKajZ

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Data & Analytics GuideHere's everything you need to knowThe essence of data and analytics is about turning raw information into useful insights to help businesses make smarter decisions. It involves:1. Information Extraction: Collecting and analyzing data from various sources.2. Decision Support: Using insights to make informed and effective decisions.3. Business Intelligence: Understanding market trends, customer behaviors, and competition.4. Performance Measurement: Tracking and assessing the success of strategies.5. Predictive Capabilities: Forecasting future trends and outcomes.6. Innovation and Optimization: Finding new opportunities and improving existing processes.7. Personalization: Tailoring products and services based on individual preferences.8. Data-Driven Culture: Encouraging decision-making based on data and evidence.9. Continuous Improvement: Using data for ongoing refinement and better performance.📚 Grab the PDF in high resolution here: https://lnkd.in/eUgCNQkW

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BibleHere are 10 formulas everyone should know1. SUM:Adds up all the numbers in a range.Example: =SUM(A1:A5)2. AVERAGE:Calculates the average of a range of numbers.Example: =AVERAGE(B1:B10)3. COUNT:Counts the number of cells that contain numbers.Example: =COUNT(C1:C8)4. IF:Performs a conditional test and returns one value if true, another if false.Example: =IF(A1>10, "Yes", "No")5. VLOOKUP:Searches for a value in the first column of a range and returns a value in the same row from another column.Example: =VLOOKUP(D1, A1:B10, 2, FALSE)6. HLOOKUP:Similar to VLOOKUP, but searches for a value in the first row of a range and returns a value in the same column from another row.Example: =HLOOKUP(E1, A1:D5, 3, FALSE)7. INDEX/MATCH:Retrieves a value at the intersection of a particular row and column in a given range.Example: =INDEX(A1:C5, MATCH("John", A1:A5, 0), 2)8. CONCATENATE:Combines two or more text strings into one.Example: =CONCATENATE(A1, " ", B1)9. LEFT/RIGHT/MID:Extracts characters from a text string.Example: =LEFT(A1, 3) (returns the first 3 characters of A1)10. SUMIF:Adds up all numbers in a range that meet specified criteria.Example: =SUMIF(C1:C10, ">50")📚 Grab the PDF in high resolution here: https://lnkd.in/eh4m-uZU

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I struggled reading annual reportsYou know what was a game changer?The 6-step framework from Aswath DamodaranYou can steal it here: Have clear goalsAlways know why you are reading an annual report. What's your purpose?Here are 5 essential things:- Cash Flows- Investments in Future Growth- Operational Efficiency- Quality of Earnings- Risk1️⃣ Cash Flows- How much revenue is translated into cash flow?- How much capital does the company need to generate these cash flows?Free Cash Flow per share growth is one of the main drivers for stock prices.2️⃣ Investments in Future Growth- How much growth is generated by increased productivity?- How much growth CAPEX does the company use?3️⃣ Operational Efficiency- How efficiently does the company allocate capital?- Does management put a lot of emphasis on operational efficiency?The better the capital allocation skills of management, the better for you as an investor.4️⃣ Quality of EarningsNot all earnings are created equalLook for:- Amount reinvested- Return on invested capital (ROIC)5️⃣ RiskThere are two primary concerns regarding risk:- Operational risk involves issues related to the core business activities of the company.- Financing risk pertains to challenges associated with the company's funding methods.Now you know what you're looking for and why, you can start using Damodaran's 6-step approach.Step 1:Confirm the timing and currency- What period is covered?- What currency are they reporting in?Step 2:Map the business mix:- In which segment does the company operates?- What does the geographic breakdown look like? Step 3:Find the base inputs for valuationFrom the Balance Sheet:• How much debt the company have?• Does the company have more current assets and current liabilities?• Does the company have a lot of goodwill on its balance sheet ImageFrom the Income Statement• Are revenues steadily increasing over time?• Does the company need a lot of COGS to sell its products?• How much revenue is translated into net income? From the Cash Flow Statement• Are most earnings translated into operating cash flow?• Does the company have a positive free cash flow (operating cash flow – CAPEX)?• Did the company manage to increase its cash position compared to last year?Step 4:Keep diggingIn the footnotes look for:- Does the company use a lot of SBCs?- When does the company's debt mature?- ...Step 5:Confirm The Units- How many shares outstanding does the company have?- Does the company have preferred shares?- Are acquisitions paid with stocks?Step 6:Corporate Governance- Do insiders get special priveleges?- Does management have a lot of skin in the game? __📚 You liked this? Grab my Financial Analysis Course for free:https://lnkd.in/ewnHQ_Sw

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Investment MatrixAn overview with all assets classesYou'll learn about:• Savings accounts• Time deposit accounts• Long Term Negotiable Certificate of Deposit (LTNCD)• Treasury bills (T-bills)• Fixed Rate Treasury notes (FXTNs)• Retail Treasury Bonds (RTBs)• Corporate bonds• Equities (common stocks)• Equities (preferred stocks)• REITS• Money market funds• Bond funds• Equity index funds• Equity non-index funds• Balanced funds• Personal Equity and Retirement Account (PERA)• PAGIBIG MP2• SSS Peso Fund• SSS Flexi Fund• Cooperatives• Real Estate• BusinessSource: phinvest (by u/speqter and u/tagongpangalan)💡 You want to receive this document in high resolution? Grab it here:https://lnkd.in/eh8qxHbm

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Aswath Damadoran is the Dean of Valuation.He has taught millions of people how to value a company.Today I am sharing his valuation class (worth thousands of $) for free5 Rules on which Aswath Damodaran has built his success:1️⃣ Principle of Intrinsic ValuationDamodaran emphasizes the importance of intrinsic valuation, which involves estimating the fundamental value of an asset based on its expected future cash flows. He often advocates for using discounted cash flow (DCF) analysis to determine the present value of future cash flows.2️⃣ Risk and Discount RatesDamodaran stresses the significance of understanding and incorporating risk into the valuation process. He suggests using appropriate discount rates that reflect the risk associated with an investment. This may involve considering factors such as the company's beta, cost of equity, and risk-free rate.3️⃣ Narrative and NumbersDamodaran emphasizes the need to combine both qualitative and quantitative analysis. While financial numbers are crucial, understanding the narrative or story behind those numbers is equally important. Investors should consider both aspects to make informed investment decisions.4️⃣ Market Efficiency and Behavioral FinanceDamodaran recognizes the efficiency of markets but also acknowledges that markets can be irrational in the short term. He incorporates insights from behavioral finance into his analysis, recognizing that investor behavior may deviate from rational expectations.5️⃣ Margin of SafetyWhile this principle is not unique to Damodaran, he does emphasize the importance of incorporating a margin of safety in valuation. Investors should build a margin of safety into their estimates to account for uncertainties and unexpected events.📚 Grab the document in high resolution here:https://lnkd.in/eSdWRMyH

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Investing Mega InfographicA full Investing Book in 12 pages.🙏 Help me spread this free Cheat Sheet: like, share and comment!- 10 Profitability Ratios- 10 Cash Flow Ratios- 10 Balance Sheet Ratios- Profitability Analysis- Capital Allocation Metrics- Balance Sheet Analysis:- Capital Allocation 101- Financial Statements 101- How to analyze a 10-K- How to analyze a balance sheet- How to analyze an income statement- How to analyze a Cash Flow Statement💡 You want to receive this PDF in high resolution? Grab it here:https://lnkd.in/e2e4bWX9

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The 9 best investing podcasts1. We Study Billionaires2. Invest Like The Best3. In Good Company4. The Morgan Housel Podcast5. Investing By The Books6. The Acquirers Podcast7. The One Percent Show8. The Memo by Howard Marks9. Infinite Loops💡 What's your favorite podcast? Let it know in the comments📚 Did you like this? Grab my summary of all public writings of Warren Buffett here:https://lnkd.in/eAt_--Xs

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I struggled reading annual reportsYou know what was a game changer?The 6-step framework from Aswath DamodaranYou can steal it here: Have clear goalsAlways know why you are reading an annual report. What's your purpose?Here are 5 essential things:- Cash Flows- Investments in Future Growth- Operational Efficiency- Quality of Earnings- Risk1️⃣ Cash Flows- How much revenue is translated into cash flow?- How much capital does the company need to generate these cash flows?Free Cash Flow per share growth is one of the main drivers for stock prices.2️⃣ Investments in Future Growth- How much growth is generated by increased productivity?- How much growth CAPEX does the company use?3️⃣ Operational Efficiency- How efficiently does the company allocate capital?- Does management put a lot of emphasis on operational efficiency?The better the capital allocation skills of management, the better for you as an investor.4️⃣ Quality of EarningsNot all earnings are created equalLook for:- Amount reinvested- Return on invested capital (ROIC)5️⃣ RiskThere are two primary concerns regarding risk:- Operational risk involves issues related to the core business activities of the company.- Financing risk pertains to challenges associated with the company's funding methods.Now you know what you're looking for and why, you can start using Damodaran's 6-step approach.Step 1:Confirm the timing and currency- What period is covered?- What currency are they reporting in?Step 2:Map the business mix:- In which segment does the company operates?- What does the geographic breakdown look like? Step 3:Find the base inputs for valuationFrom the Balance Sheet:• How much debt the company have?• Does the company have more current assets and current liabilities?• Does the company have a lot of goodwill on its balance sheet ImageFrom the Income Statement• Are revenues steadily increasing over time?• Does the company need a lot of COGS to sell its products?• How much revenue is translated into net income? From the Cash Flow Statement• Are most earnings translated into operating cash flow?• Does the company have a positive free cash flow (operating cash flow – CAPEX)?• Did the company manage to increase its cash position compared to last year?Step 4:Keep diggingIn the footnotes look for:- Does the company use a lot of SBCs?- When does the company's debt mature?- ...Step 5:Confirm The Units- How many shares outstanding does the company have?- Does the company have preferred shares?- Are acquisitions paid with stocks?Step 6:Corporate Governance- Do insiders get special priveleges?- Does management have a lot of skin in the game? __📚 You liked this? Sign up to my newsletter and receive a course which helps you to analyze Financial Statements like a professional:https://lnkd.in/ewnHQ_Sw

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Supply & DemandOur entire economic system is based on Supply & DemandHere's everything you need to know:1. Price DeterminationSupply and demand are fundamental forces that determine the price of goods and services. When demand exceeds supply, prices tend to rise, and when supply exceeds demand, prices tend to fall.2. Elasticity MattersThe price elasticity of demand and supply is crucial. Elastic demand or supply means that a small change in price leads to a significant change in quantity demanded or supplied, while inelastic means the opposite. Understanding elasticity is essential for pricing strategies and investment decisions.3. Cyclical NatureEconomic cycles, such as booms and recessions, impact both supply and demand. During a recession, demand may decrease, leading to overcapacity in some industries. Conversely, during economic booms, demand may outstrip supply.4. Market EquilibriumThe intersection of supply and demand curves in a market represents the equilibrium price and quantity. Investors often look for opportunities where prices deviate from this equilibrium, aiming to profit from price corrections.5. Complementary and Substitute GoodsUnderstanding how goods are related is vital. Complementary goods, like cars and gasoline, have demand linked together. Substitute goods, like co*ke and Pepsi, compete with each other. Changes in one market can impact related markets.6. GlobalizationSupply and demand are increasingly influenced by global factors. Investors must consider international trade, exchange rates, and geopolitical events that affect the supply of and demand for goods and services.7. Government InterventionGovernments can influence supply and demand through policies like taxes, subsidies, and regulations. Investors need to anticipate how government actions may impact the markets they are interested in.8. Technology and InnovationTechnological advancements can disrupt existing supply and demand dynamics. For example, the rise of e-commerce has significantly altered the retail landscape, affecting both supply chain logistics and consumer behavior.9. SeasonalityMany markets exhibit seasonality, with demand and supply patterns varying throughout the year. Investors should be aware of these patterns to make informed decisions, such as when to buy or sell assets.10. Behavioral EconomicsHuman psychology plays a significant role in supply and demand. Investor sentiment, consumer confidence, and other psychological factors can lead to market fluctuations that may not always align with economic fundamentals.Source: Daily Study Shop.__📚 Grab the PDF in high resolution here:https://lnkd.in/eP3_i675

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