So on this website there is three main parts there’s a stocks part, a news part and an education part. Click on the link to find out more about how to use each section.
- Stocks.
- News.
- Education.
- Stock Summary List.
Stocks
In the stocks part you’ll find that they’re split up by the industry that they’re in – clothing, video games, technology.
Then in each individual stock you’ll find a few different parts:
- Business Overview and Segments
This just tells you a bit about each company. Read this carefully because the name of the company doesn’t always reflect what the company does. A lot of the brands we know and love are usually just one part of a bigger company with a different name, or the name of the company is just different to the name of the brand that we consumers know.
- Moat
Refer to the moat page for more information about this but it’s essentially just the feature about this company that’s going to give it an enduring competitive advantage. This will mean it will survive in the long-term regardless of what happens to it, making it a low-risk company. This long-term survival will also mean its stock will compound for a very long time, and if we remember the math behind compounding, the longer the compounding the bigger the returns.
- Key Facts and Figures
This gives all the most important numbers for a company. Current stock price tells you roughly whether the stock is cheap, average, or expensive. Current FCF multiple of stock tells you what the stock’s current value is trading at as a multiple of its FCF – its not what number you should pick as your FCF multiple, it’s just what the stock is currently priced at. Last year’s growth tells you how much the company grew its sales by last year – the best marker of growth. ROIC is a metric that indicates the quality of the company – high quality is above 15%, moderate is 5-14%, and poor is less than 5%. FCF margins tells you the profitability of the company – another marker of the quality of the company.
- Valuing the Company
This just shows you how I value that particular company – and then it gives you a stock price. There’s also a MoS (margin of safety) which is essentially the buffer of safety we want to allow for anything that could happen that could send the stock below the normal value. Check out the margin of safety page for more information.
- Worst-Case Scenario
This is my estimate of what the absolute worst situation for the stock could be, so the stock price you find there is what I estimate to be the absolute lowest that it could ever find itself. You’ll find that sometimes my valuation of the company is actually less than the worst case scenario which might sound like it doesn’t make a whole lot of sense. However, in severe market crashes or when things are really going bad for a company the stock can fall much further than you can fathom – just look at coronavirus. However, it is unlikely that the stock would ever fall below the worst case scenario (bar a stock market crash) so if you want to use this as your stock price target then that’s fine, but I like to value a company based on my principles and sometimes that gives me a number which is actually worse than the worst-case scenario.
Also note that in a worst-case there’s no margin of safety, because it’s already a worst-case scenario so we don’t need a buffer for that number – it’s already embedded into the worst-case situation.
- What Wall St is Missing
This is pretty much just an overview of the company and industry overall. The main focus here is on things that some of the professionals may be missing about a certain stock – so they’re essentially reasons for why the stock is being under-appreciated by investors, and it’s sources of upside potential. But I also mention things that the market or the professional investors might be too optimistic about – so it’s reasons for why the stock is being over-valued by investors, and the sources of downside risk.
- Key Questions to Ask Yourself Before Investing
These are just a few questions that I think you should ask yourself before you invest in the company. They’re things to reflect on before you want be a part of the business.
News
This is just a blog of all the current news that you want to be aware of in the stock market. It’ll include;
- Stocks-specific news – why a stock is falling, why it’s rising, new stocks
- Market news = why the market is up or down
- Industry news = why an industry is booming or busting
Education
This section is all about teaching you how to invest in stocks yourself. This section will grow over time so keep an eye out. So far it has a few parts to it:
- Step-by-Step Guide to Picking and Buying a Stock.
- The Psychology of Investing.
- Reading Financial Statements.
- Key Metrics (Key Numbers).
- Red Flags – bad signs in a stock.
- Green Flags – good signs in a stock.