If I give anyone $1,200 and ask them to spend it at free will, most people will find it easy to spend the money within 24 hours.
Without opposing the former, below, is the latter: what one seeking to invest in oneself or in the good could do, also, the five things that I would do with $1,200. Continue reading
The greatest investor of all times puts high emphasis in the importance of business valuation. Think about it, if you were buying a private business, terms like earnings-per-share (EPS) or price-earnings (P/E) and many other ratios, do not matter if you are purchasing a private entity. You shouldn’t change this approach when valuing a public company.
The important thing to know is how much cash the company will generate. Where will the cash go? To pay for expenses or buy equipment, pay employees or to their bank account, this is the key.
There is a pretty famous example detailing valuation. It involves a “dollar machine” handing out one dollar every year for ten years. Pause for a moment and think, how much would you pay for this machine? See the answer at the end and measure how you did! Continue reading
As of April 19th, 2017, AutoNation is trading for $43 and has a market cap of $4.37 billion. The company trades under the ticker symbol “AN” in the NYSE. This is not utterly important! Forget this! Leave it for the end, how does AN generate cash?
Warren Buffett tells us to judge the performance of a company by looking at their 4-5 year history, at the minimum, preferably 10 years, if available. Look for the intrinsic value of the company and pay a fair or bargain price. Let’s go step-by-step: Continue reading
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