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An Investment Masterclass, Part 1.

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Error: at 8:36 I say "earn about 15x it's net income." I meant to say that companies are generally WORTH about 15x their net income, on average.

ONE THING I DIDN'T TALK ABOUT CLEARLY ENOUGH - when it comes to figuring out how much you are paying for the "box" you are interested in, it's MOST useful to compare the p/e multiple you are paying vs the multiple the stock has traded at over the last several years. If you think you are getting a good price and the fundamentals of a company remain strong, then you just might be getting a great deal. It's also important to compare a company to its peers in order to get a better context for the market and what an industry's multiple is.

You can find this historical multiple chart by adding "price to earnings ratio" to your chart here on TradingView. It's in the "financials" tab - you will need to zoom out on a daily or weekly chart to get a grasp of how much you are paying for earnings at the current moment as opposed to in the past.

I also didn't really address how to sell an investment. This is probably the trickiest bit. I work off of an "opportunity cost" framework. If something has run it's course and you estimate there is greater opportunity in another investment as opposed to the one you are currently holding, then it's time to sell & re-allocate.

Title is tongue and cheek. I know it's basic stuff. Just looking to help people who are trying to put an honest effort into learning the craft.

Cheers!
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just noticed I said "Harrison Ford" lol I meant Henry Ford
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Clicking that video will take you to part 2, by the way! Forgot to mention that ^^
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Also Shoot me a follow! I try to post stuff like this on the regular.
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Part 3:
Fundamental Analysis

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