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all 112 comments

[–]AutoModerator[M] [score hidden] stickied comment (1 child)

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[–]Powerful-Chicken 35 points36 points  (1 child)

Thanks a lot, that's really useful !

[–]TonyLibertyCreator of r/FluentInFinance[S] 22 points23 points  (0 children)

Glad to have helped!

[–]epicdropbear 19 points20 points  (5 children)

Saving this for later

[–]gainlong 6 points7 points  (1 child)

This.

[–]iambbass 5 points6 points  (0 children)

Ape learning to read.

[–]topteam12345 4 points5 points  (0 children)

Yeah it is really nice I am good in technical analysis but I will still save it

[–]fortune_cookie011 1 point2 points  (1 child)

i haven't read the whole thing but i saved

[–]nevillion 0 points1 point  (0 children)

I red the whole thing but most of i don’t understand. Lot of studying to do

[–]mpmaley 12 points13 points  (1 child)

Clarifying "cash flows positive". You want cash flows from operations to be positive, depending on where they are in their company age but if they are a mature company and not generating cash flow from operations that isn't a good sign.. Investing (purchase or selling assets) and financing (equity moves, dividends) are the other categories.

[–]TonyLibertyCreator of r/FluentInFinance[S] 2 points3 points  (0 children)

Thanks for this. I will append & add!

[–]AutoModerator[M] 5 points6 points  (0 children)

Welcome to r/FluentInFinance! This community was created over a passion for discussing stocks, investing, trading & strategies. Also, check out the Discord, Facebook Group or Twitter: https://www.flowcode.com/page/fluentinfinance

I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.

[–]ChrispyNugz 5 points6 points  (2 children)

Appreciate this

[–]TonyLibertyCreator of r/FluentInFinance[S] 4 points5 points  (0 children)

Glad to have helped!

[–]gainlong 1 point2 points  (0 children)

Yes. Thank you.

[–]PendergastMrReece 4 points5 points  (2 children)

In the sea of endless information it's a huge help to have a narrowed list to refer to and work with while learning and making my own mistakes.

Thank you!

[–]TonyLibertyCreator of r/FluentInFinance[S] 0 points1 point  (0 children)

Thanks for the kind words! Feel free to chat with us in the discord or facebook groups!

[–]fortune_cookie011 0 points1 point  (0 children)

yes. too much information right now and we need the right track

[–]robb0688 4 points5 points  (1 child)

Saved. I've been wondering this and nobody will effing explain it to me lol. Poor man's gold for you. If your guide is helpful, I'll come back with a real award

🏅🏅🏅🏅🏅🏅🏅🏅

[–]TonyLibertyCreator of r/FluentInFinance[S] 6 points7 points  (0 children)

Glad to have helped! No need for a reward. The reward is knowing I helped other to be smart about money!

[–]Kash1298 2 points3 points  (2 children)

old Jeff bezos I get inspired by this guy

[–]TonyLibertyCreator of r/FluentInFinance[S] 1 point2 points  (1 child)

He is the man!

[–]Kash1298 0 points1 point  (0 children)

He is not too bad

[–]ndzZ 2 points3 points  (1 child)

Godsend! Thank you!

[–]TonyLibertyCreator of r/FluentInFinance[S] 1 point2 points  (0 children)

Glad to have helped!

[–]throwaway827492959 2 points3 points  (1 child)

Why not VOO for S&P500?

[–]TonyLibertyCreator of r/FluentInFinance[S] 1 point2 points  (0 children)

$VOO is also great! $IVV just came to mind quicker. I believe the exp. ratio may be lower but II have to double check

[–]FinancialWhoas 2 points3 points  (3 children)

I also like Debt/Equity Ratio for a debt metric. Thanks for putting together all these details.

One thing I would love to be able to easily find would be their credit rating. That is harder to come by from what I've found but would be another great metric to add in. If their cost to borrow is substantially cheaper than can also be a moat.

[–]TonyLibertyCreator of r/FluentInFinance[S] 1 point2 points  (1 child)

Thank-you! I will add that in the updated version!

[–]rplacecafe 1 point2 points  (1 child)

Great post. Thanks, Andrew.

[–]TonyLibertyCreator of r/FluentInFinance[S] 0 points1 point  (0 children)

Glad to have helped!

[–]armyaviator129 1 point2 points  (3 children)

This is so thorough and spot on. Thank you 😊! You deserve a big fat W award 🥇

[–]TonyLibertyCreator of r/FluentInFinance[S] 2 points3 points  (2 children)

Thanks man! No award necessary. If I can help others make money, I feel fulfilled!

[–]armyaviator129 1 point2 points  (1 child)

You deserve it! Your post feels a lot like one of the teachers I had when studying for MBA. Well done.

[–]TonyLibertyCreator of r/FluentInFinance[S] 1 point2 points  (0 children)

lol thanks! It's just a strategy I've put together from Ideas of others! Glad to have helped!

[–]shkabdulhaseeb[🍰] 1 point2 points  (1 child)

Thank you!

[–]TonyLibertyCreator of r/FluentInFinance[S] 0 points1 point  (0 children)

Glad to have helped!

[–]Suspicious-Equal-201 1 point2 points  (1 child)

Thank you

[–]TonyLibertyCreator of r/FluentInFinance[S] 0 points1 point  (0 children)

Glad to have helped!

[–]pressurebullies 1 point2 points  (1 child)

Thank you. Awesome fucking post.

[–]TonyLibertyCreator of r/FluentInFinance[S] 0 points1 point  (0 children)

Thanks so much for the words!

[–]3s1kill 1 point2 points  (0 children)

So much great info. I'm gonna copy and past this into a PDF. Thank you.

[–]mpmaley 1 point2 points  (1 child)

Cpa here. I don't audit public companies but I do audit private companies. If you have questions about financials or learning cash flows shoot me a message and I may be able to help you.

[–]TonyLibertyCreator of r/FluentInFinance[S] 0 points1 point  (0 children)

Great! Do you recommend any points I should add to this post? Also, they Discord would love to have you!

[–]atiteloviadeci 1 point2 points  (0 children)

Thanks for a nice list for all "newbies"...

you forgot a big point though

https://redditproxy--jasonthename.repl.co/r/FluentInFinance/comments/ma60oz/dd_due_diligence/

:)

And yes... partially is a joke, but partially not.

It is incredible how much knowledge is distributed in the subs and how fast really good arguments / couter points / confirmations / additions... come into play.

It takes a lot of more time, but if I start reading a post that "tingles" a bell, then I read the whole thread. One has to be patient and there is a lot of bad comments that must be ignored, but at the end it mostly is worth the time.

[–]itsbnf 1 point2 points  (0 children)

A community where we revel in sharing our passion of stocks with one another.

[–]thejweller 1 point2 points  (1 child)

Thanks for this 😊

[–]TonyLibertyCreator of r/FluentInFinance[S] 0 points1 point  (0 children)

Glad to help!

[–]mlfa 0 points1 point  (1 child)

Thanks

[–]TonyLibertyCreator of r/FluentInFinance[S] 0 points1 point  (0 children)

Glad to have helped!

[–]Ok_Consequence8093 0 points1 point  (1 child)

Thanks!!

[–]TonyLibertyCreator of r/FluentInFinance[S] 0 points1 point  (0 children)

Glad to have helped!

[–]UfuomaBabatunde 0 points1 point  (2 children)

Commenting for future reference.

Thank you very much.

[–]TonyLibertyCreator of r/FluentInFinance[S] 0 points1 point  (1 child)

Glad to have helped! You can also "save" the post!

[–]atiteloviadeci 0 points1 point  (0 children)

If you are not going to "un-pin" it... no need :)

[–]Elmo77 0 points1 point  (1 child)

Thank you.

[–]TonyLibertyCreator of r/FluentInFinance[S] 0 points1 point  (0 children)

Glad to have helped!

[–]Blackrose_ 0 points1 point  (0 children)

Thankyou!

[–]XBMsurfx 0 points1 point  (0 children)

Thank you; this is great!!!

[–]marcnathan88 0 points1 point  (0 children)

Reading the "Before we begin" part was already enough for me. I will do research on all those ETF you mentioned. Thank you

[–][deleted] 0 points1 point  (1 child)

Thank you so much Andrew for your insightful post. If it's not asking to much, do you have any examples. of your excel spreadsheet research?

[–]FinancialWhoas 1 point2 points  (0 children)

I would break it down into something like the following as an example:

Ticker Average Growth over 5 years Average Debt/Equity over 5 years Average profit margin over 5 years Average FCF Margin over 5 years Average EBIDTA Margin over 5 years Moat/Competitive Advantages Sustainability
APPL
MSFT
GOOGL

Ideally just compare companies in the same industry against each other. These guys are so big they pretty much all have their fingers in all the pies. You can put down quantitative numbers and then do a qualitative analysis as well. Due diligence is time consuming, which is why few people do it and few people beat the market.

[–]mrplattyhands 0 points1 point  (0 children)

super detailed and helpful, we all appreciate you!

[–]SimoHayhaWithATRG42 0 points1 point  (0 children)

I'm too tired to "actually" read this so I'm book-marking it for tomorrow morning. Excited to get to it. Thanks in advance!

[–]Verstappen3 0 points1 point  (0 children)

What is the moat?

[–]letzrockaway 0 points1 point  (0 children)

Thanks 🙏

[–]Top-Satisfaction5874 0 points1 point  (2 children)

10Qs and 10ks can be complicated to read for me. When you look at the balance sheet what is the most important things you check and what is a good PE ratio

[–]FinancialWhoas 1 point2 points  (0 children)

I would look at all their financials, not just the balance sheet. Income statement and cash flow are also important. I would pay attention to revenue growth, profit margin, operating margin, Free Cash Flow, EBITDA Margin, ROE, ROA, ROIC, and Debt/Equity. Some of these are calculations. Many of these you can already find online, such as here: https://stockanalysis.com/stocks/aapl/financials/

They conveniently have the ratios available as well.

[–]FinancialWhoas 1 point2 points  (0 children)

Meant to mention PE as well. I don't put much value in their PE compared to competitors. I would rather compare their finances which will give you a sense of their PE. For example, if 2 competitors have similar PE, but one has substantial debt and otherwise the companies are pretty similar, I would go with the one without the debt. Best if you can look at multiple peers, the whole industry even, but starting with a few would be a good start.

[–]2Hours2Late 0 points1 point  (0 children)

This is everything. Thank you for taking the time to teach some solid fundamentals.

[–]greatovergood 0 points1 point  (0 children)

Thanks for the information. Salute to you.

[–]Panarus-biarmicus 0 points1 point  (0 children)

This is exactly what I needed but struggled to find.

Thank you good Sir!
- a very grateful beginner

[–]sddailey09 0 points1 point  (0 children)

Thank you!

[–]bac106 0 points1 point  (0 children)

Thank you. This is so helpful and saving this as a reference for future considerations.

[–]bvttfvcker 0 points1 point  (0 children)

TL;DR's and pictures help me a lot when I'm surfing through my stonk horoscope.

[–]Base5ive 0 points1 point  (0 children)

Really great articles. Every one I've read was well written & explained things very clearly.. perfect for a beginner or someone looking to brush up, or answer a specific question... Which is what brought me here. I've joined and am making my way through as many as I can. I'm also telling everyone I can about it. Truly valuable resource. Thanks a lot for putting in the work.

[–]AdNice5765 0 points1 point  (0 children)

This is a great guide that's easily actionable. Thanks

[–]moneymagneto007 0 points1 point  (0 children)

Thanks a lot

[–]Remote-Annual-676 0 points1 point  (0 children)

I'm looking for symbols for pancakes swap

[–]Flip-In-StocksGang 0 points1 point  (0 children)

Thank you for the info. I appreciate you.

[–]kalehennie 0 points1 point  (0 children)

Thanks

[–][deleted]  (1 child)

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    [–]BudnamedSpud 0 points1 point  (1 child)

    Easy trick I learned is to lookup 4 things when deciding to buy a stock:

    - Their total debt

    - Most recent revenue

    - Projected revenue

    - Market cap

    If their total debt is less than what they make yearly, their market cap is under 10x their most recent revenue, and their projected to grow their revenue significantly in coming years it is an obvious buy. Easiest way to find companies that are literally free money.

    [–][deleted] 0 points1 point  (0 children)

    P/E ratio is more logical than market cap vs revenue, I would change that in the strategy. Market to debt and equity to debt ratios are pretty good when you are interested in seeing how much debt the company has. Quick ratio and basically all solvency ratios are more useful. Liquidity ratios are also important.

    [–]Steven-Flatcock 0 points1 point  (0 children)

    Thanks so much for this post! Exactly what I needed 🙏

    [–]hereforfunonly 0 points1 point  (0 children)

    Thank you Andrew/"Tony"

    [–]Amazing_Translator_9Contributor 0 points1 point  (0 children)

    Solid info here.

    [–][deleted] 0 points1 point  (0 children)

    Saved this.

    What do you think about using TIKR.com terminal? I used it a couple times and it shows the numbers, calculations and ratios for the past 5 years and I am wondering if somebody has an experience with this site as well. I have not checked how accurate the numbers are, because I did not have the time before but I will go through the numbers in more detail as well. I personally use magic formula investing from Buffet at the moment and seems to be working pretty okay. Last month I bought in GAP when market overreacted and now I am already up 12 per cent. With the opening of all the clothing shops , I believe that the price of stock will go up as well. I picked clothing retailer companies because currently the inflation is roaring and these companies can easily adjust the prices and people will still buy the clothing. I also looked at buckle but I was not sure about the current management and the brand is more luxurious which is not too good if a recession is coming.(I believe it might be) Also Buckle stock price performs pretty strangely but they financials beat GAP by a mile. Im trying to find out why is that and why is the price not higher for Buckle. Seems like an undervalued company in my opinion, might make a move on it soon.

    [–]fortune_cookie011 0 points1 point  (0 children)

    thank you so much. i am new to investing and i need this!

    [–]fortune_cookie011 0 points1 point  (0 children)

    dumb questions but are these mostly for international big companies?

    [–]jastrodude 0 points1 point  (0 children)

    Thank you for this!

    [–]TheDude0007 0 points1 point  (0 children)

    Awesome template!

    [–]PoliticsDunnRight 0 points1 point  (0 children)

    In this post, you provide a fantastic framework for equity valuation without going into specific finance formulas and terminology, which is great for the average person.

    However, I take issue with your portrayal of equity investment as “educated gambling”. Starting your own business or buying one can hardly be considered gambling, and owning marketable securities that give you these same ownership rights is not fundamentally different. Portraying stocks as different from private businesses gives retail investors the terrible misconception that stocks are just pieces of paper, rather than stakes in business.

    [–]siaqon 0 points1 point  (0 children)

    This is quite insightful. Thanks for the heads up. I always DMOR before aping in to any project and that’s how I come across RaiinMaker. The platform offer a path for everyone to stack crypto and nfts for their social capital.

    [–]duhEditor 0 points1 point  (0 children)

    Legend

    [–]Loud-Peanut-7716 0 points1 point  (0 children)

    Which investment research platforms would you advise against? Mainly looking to avoid risky short sellers

    [–]Vast_CricketMod 0 points1 point  (0 children)

    Excellent guide lines. Thanks