Tips & Tricks: Introduction to Valuation

Valuing a stock - for many people it is the hardest part of investing. How do you put a specific dollar value on a stock?Both of us at Equity Mates have found this the most difficult part of learning to invest. So in this episode we break down what we've learnt over the past 3 years of this podcast.In this episode you will learn:The different types of value investors talk about: enterprise value, book value and market valueThe difference between relative valuation and absolute valuationDifferent methods of relative valuation - price-to-earnings, price-to-sales and price-to-bookThe theory about absolute valuationThree methods of absolute valuation we won't be discussing (but you're welcome to Google if interested)Discount cash flow (DCF) - what it means and what you need to knowReverse DCF - a twist on your discount cash flowThe effect that changing your assumptions can have on your valuation (a.k.a why you need to take the price you get with a grain of salt)Roger Montgomery's valuation method in his book Value.AbleResources Discussed:Equity Mates Reading List - Including Value.Able by Roger MontgomeryGuruFocus WebsiteTo get involved in the Equity Mates community - visit our socials and website here.Equity Mates Investing Podcast is a part of the Diamantina Media Network - the home of Australia's favourite podcasts. For more information, visit http://diamantina.com.au/ Hosted on Acast. See acast.com/privacy for more information.