Why Some Stocks are Cheap & Others Expensive
Вставка
- Опубліковано 22 тра 2024
- Warren Buffett has said that the stock market isn’t always efficient, but mostly efficient. Is it possible to use the idea of a mostly efficient market to find undervalued companies in 2023? In this video, I’ll present a method that just might get us there.
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My main tool for fundamental screening and analysis of stocks: app.tikr.com/register?ref=tsi
(If you sign up, I’ll earn a small commission)
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Timestamps:
00:00 Intro
02:25 Historical Growth
04:34 Financials
05:24 Dividends
05:55 Profitability
07:28 Margin Improvements
09:00 Future Growth
10:09 Country
11:30 Industry
12:20 Undervalued Companies
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My goal with this channel is to help you make more money and improve your personal finances. How to become a millionaire? There are many ways to get there - investing in the stock market, becoming a stock trader, doing real estate investing, or why not becoming an entrepreneur? But whether you are interested in how to invest in stocks or investing strategies for creating passive income with rental properties - I hope to be able to provide you with a solution (or at least an idea) here. Warren Buffett - the greatest investor of our time - says that you should fill your mind with competing ideas and then see what makes sense to you. This channel is about filling your mind with those ideas. And in the process - upgrading your money-making toolbox.
Literally the best investing channel in youtube! I love how you always focus on fundamentals and look at the data holistically to look for patterns and see which metrics matter the most
Amazing channel! You are well read, straight to the point. You manage to present the matter in layman terms so that everybody can uderstand it. Congrats man, you have a fantastic channel here! 🔥🔥🔥
Thanks for sharing ❤ you were dearly missed! I cannot find any other channel with financial content as solid as yours, keep up the awesomeness 👑
Please keep making your fabulous timestamps! 😊
So much knowledge summed up in this video. Nice work 👍🏻
Hi Swedish Investor!
Great content Man! Thank you a lot for your videos! Do you have any link to that screener of yours?? 13:04? 👍🏼👍🏼
Thanks for the analysis. Great work👍
Great video. Thank you!
I want to acknowledge you for your great efforts, and really good videos. It’s obvious you put a lot of time into the editing and I like how you have the illustrations with all the little cartoonish type looking figures. It makes it kind of fun to follow along. Congratulations on a great job.
12 stocks for Indian investors to work upon. Great video, thanks!
This is an immensely valuable video. Thank you so much for the time and effort, you RULE!
Very insightful - thank you!
Thank you!
Regarding the stock market value, I would also say that the most important thing is - Future Growth, BUT the Future Growth is based on analyses from different institutions and they are based on some presumptions.
In a world where banks collapse, inflation is high, and FED is pumping up the interest rates - and all these events are happening IN A SHORT TIME, there is a high chance that presumptions from analyses are wrong, because the things now are too chaotic to make any rational presumption.
Therefore, it is very hard to be smart in 2023.
Very knowledgeable video, surely gave me something to think about going forward at a time when more companies could be undervalued
Congratulations for your content! Could you advise in case someone is making the first time investment which platform to begin with, or maybe you already have a video about it?
Thanks!
Fantastic content. Best video of the year!
Awesome video Erik!
Hi there, im from indonesia, nice to know that you have PGAS on your bucket, yeah indeed, that company is the largest gas distributor, it have longest pipes nationwide, i guess one of the company problem is high leverage due to wrong expansion plan in the past time that had to paid off in present.
Awesome to have a new video from you out, you started me on my value investing journey, I hope you have been keeping well!
I'm glad to hear it Keeva Brooks! Thanks a ton for the support!
Thanks for sharing your analysis. I think some of the irregularities you described are due to the cyclical nature of the companies, which you covered in your Peter Lynch book reviews. Maersk and other cyclicals tend to look cheapest relative to profits when they are close to the end of their cycle, and as Lynch would say, buying during such time is a quick way of losing half or more of your money
Thanks for video. Love from India
What an incredible video, thanks.
Nice 👍
what a great start of the week !
Any thoughts on the marine transportation industry? I know you briefly touched on it in this video regarding the low valuations. Appears to be a cyclical industry surrounded by fear. I am trying to asses whether the fear is rational or not. Any insight would help, thanks for the awesome videos!
Re. return on assets is irrelevant in cases where booked assets are not the driver of profitability. Then reinvesting into new assets does not grow your revenue. If you are a software company like e.g. Adobe, your profitability comes from your customer base and has little to do with how many office buildings you own.
This is true, but only because we're really bad at calculating "intellectual property" assets in the digital age. A factory is much easier to price than a suite of infinitely replicable exclusive software.
Thanks, can you do a summary and review of the technical analysis of the financial markets by John J. Murphy?
Great work as usual, I would love to see the whole screen in tikr. Cheers 😊
Make a video showing us how to use tikr to come to this conclusions of 6 factors pls and post the final full criteria screen
I already did on the other number? Should I use this one instead?
How did you get the P/E according to other variables?
What are these variables and how did you calculate the P/E
Hello. We are waiting for your videos with interest. Old videos have automatic Turkish subtitles, but they are not available in your newly added video. Can you add?
Ahh man ya nailed it!
This video is a masterclass ! 😮
Finally! i love this channel bro.
@@Iheanacho-qs6uh Hi bots
I like ROA as it may indicate future margin
Please make videos more regularly! Cheers!
He is busy perfecting his strategy for the US trading competition.. Once he will nail that he will share the outcome with us.. Will ya?
Man you do so much work for your videos. According to my metrics I think The Swedish Investor channel in UNDERVALUED ;P
Hmm interesting, if that's the case, then shouldn't the PEG ratio be the most important metrics? Interested in your thoughts?
How to make this type of whiteboard video. Give some advice about this type of videos creation. Please
I may have misunderstood here when looking at financial you touched on quite some value based metrics... If you looked at timespan of years should you not have had better p/e estimate in line with (current value based) Warren success? Lastly I am sure you heard of acquirers multiple.. Any comment on whether this would be more viable option to spot unfair valued companies?
Hey E. C.! Do you mean using some other metric than P/E for creating these statistics? I looked at aquierer's mutiple and a few other versions of P/E too but in my analysis at least, P/E created the greatest discrepancies, so I decided to use that. But for the record, I always look at some sort of EV/EBIT in addition to P/E before buying any companies myself.
I need to go through your video again.. I understood that having a good p/e was your metric to verify the stock was "good", but indeed I may have completely misunderstood your point in partucual for high earning conpanies. I taught you were interested in finding what factor (like roic) could have led to a better estimate of the future price of the company so that it was possible to spot undervalued companies. The comment I did was if you use as filter value parameters I would expect on the long run to find good future price companies as classic value theory suggest, from your analysis companies with good ROIC (to mention one) are not given to outperform conpanies with bad ROIC, even on 10 year period. But again you have not looked into future price only as target so is likely I have missed the point.
Considering acquire multiple, for me that was another lens you could have looked at instead of financial parameter or geographical region... To spot undervalued companies
Can you please summarize “never eat alone” book?
Please summarise Margin of Safety by Seth Klarman.
ive been anaysing volvo cars for the past few months. very interesting that it came up in this sceener
Hello, what software is he using for the doodle animations?
Greetings from Poland! Great video
Many thanks Maciek Michalski!
How come you are not getting affected by copyright ?.. There is such good content from all the books uploaded previously.
Amazing content, learning insane knowledge about those famous mood swings of MR MARKET, cheers from an insanely cheap market of Pakistan ❤😊
Damn, never thought that P/E Ratio could be so powerful!
great video again! if you are more of a growth invester rather than value invester, do all these things still apply? or are there other metrics which would be more important? maybe a video idea to do the same thing from a growth invesitng perspective?
Growth and value investors are the same thing. People confuse investors who use margin of safety as "value investors" and speculative bettors as "growth investors". Know who you are and what your objectives are and that will guide you in how much risk you want to take. Using margin of safety is how you best preserve and grow wealth
Do you know the UA-cam channel "Financial Wisdom" is very similar to yours?
respect for the OLS regression approach :)
Haha, cheers Theta Omega 🙌
Hii i am from india
i have watch most of your video but i would like to comment on this topic about india and Pakistan an investor should research about
1 Country be for company
2 investor should consider before investing future growth of a company and country.
3 India have some of advantage over Pakistan we(india) have company like tata group, reliance, wipro and many more
❤❤❤❤❤
The market also prices in users, subscribers, it might even price in how popular the ceo is.
Great video! However i dont think that it was necessary to cut out all stocks with a pe of 7 or lower. Investing is also about finding the gems in that list.
If a company can grow earnings at more than 35% CAGR, then you of course shouldn't look at historical PE! It depends what you pay for the earnings 2 or 3 years out. Growth and value are joined at the hip, growth is an integral part of value, so why would you look at an optically high multiple of earnings on a LTM basis when it could be quite reasonable on a forward basis?
After ver long time
When you mentioned Pakistan,it really is true. Fundamentals are amazing, companies are great tho the macro sucks right now but the Pakistani companies are priced so cheap that I have a huge chunk whilst everyone is telling me otherwise (real estate).
You should buy as much as possible
everyone has basically priced in a sovereign default for pakistan and I am not sure they are wrong
@@AKumar-co7oe That's the thing about gambling. You only should bet on odds what you can afford to lose.
Mr. Swedish investor. I have chronic diarrhea and it is green and smelly. Can i send you a sample for analysis
You should read narrative economics. I say added google searches and twitter mentions
I buy low and I buy high but I hold on for dear life
Love from India 🇮🇳
I am surprised you didn’t include market cap as a criterion.
I was considering market cap too, and my assumption was bigger = more expensive. It turned out to be true. But then I thought that the data would be too biased to really be interesting enough to be included. Since it's the P in the equation it gets a little tricky I think.
@@TheSwedishInvestor yeah it is more difficult (for example there are few projections or analyses) but I believe middle and low caps represent the most interesting names for small investors.
Buffett made those wonderful 50% yoy gains because he was very good in analyzing/discovering unknown names and he didn’t have the tools we have today!
Great channel BTW 👌
I bought my first stock today I lost .20 cents but that’s probably just because it’s Monday right.
Nice analysis, but if you sum the number of companies in the specific column, the result is most of times way below 5000. Moreover the analysis on Pakistan is based on 14 companies.....
Hey gelex911! It's 5000+ until we get to EPS growth. The first EPS growth table that you see is only based on companies that had a 5y projection among analysts (this was around 1500 if I remember correctly). From there onwards in the video, the anaysis if based on companies that had ANY type of EPS growth estimates (1,2,3,4 projections included too) and then it was around 4000 companies. The top list of companies that you see in the end is based on that number, around 4000.
Yes, one has to be careful about Pakistan, but it actually proved to be statistically significantly different from the rest of the pack, even with so few companies, thanks to the fact that there was very little variance there.
Lots of love from Pakistan
In Turkey, there are obvious political risks, this is true, yet I belive market overreacts to this fact. Even with the currency crisis Turkey is one of the important members of emerging markets and after the Erdogan Reign valuations should correct itself.
Stocks are pretty unstable at the moment, but if you do the right math, you should be just fine. Bloomberg and other finance media have been recording cases of folks gaining over 250k just in a matter of weeks/couple months, so I think there are alot of wealth transfer in this downtime if you know where to look.
Thank you for your method but I find it biased as mainland China market is not included😂 well I guess it’s due to the fact that Chinese viewers contribute less than 0.5% of this lovely channel since UA-cam is banned here. Great content as always. Thanks mate.
10:29 when you see Poland spelled Polad 😢
Fantastic video, I've never come across any of this data before and summarised so well, great job
Watching from Pakistan ❤
Awesome man, you seem to have quite a few opportunities in your home market! 👍
@@TheSwedishInvestor love to watch content from you channel
Watched hours and hours together for the past couple of weeks
I wish book summaries could have been a bit long to cover all the aspects of the book as your way of explaining stuff is amazing and always makes 100% sense
Thanks for your reply
We must be like Tom
Great video. I have about 40% of my portfolio in Brazil, Hong Kong and South Korea!
pls show at the least the variances and Rsq to all these analysis, so we can check how meaningful the numbers are, otherwise, the numbers really dont tell us anything. it is just illusory explanations.
It's a great point pjc_deleon. I assumed that most people are not statisticians and more interested in the actual results and that adding too much emphasis on such things would only confuse/bore. But I'll give you some numbers here. For the OLS, when all 8 variables were consider (country and industry are categorical variables, so essientially many more), and for 4373 observations (I excluded about 1000 companies from the first group that didn't have analysts' forecasts):
Mean of Dep Var: 19.7
RMSE: 10.8
SSR: 504444
TSS: 1002214
Rsq: 0.5
F stat: 92.8
None of the individual variables have p-vale >0.05 and I tried optimizing the number of variables included using AIC. Hope this helps!
Hi swedish investor, i understand most people arent interested in the stats, i also frequently have to explain stats to layman in my job regularly. I suggest showing it in graphs or charts as raw tables wont do it.
strong correlations usually show tight dispersions.
I was actually very interested if there was a solid result coming from the analysis, which can serve as basis for solid investing action plan. results that can allow investors more trust to "stick to it" .
however based on the info you showed with 0.5Rsq, assuming the 8 variables were joint OLS, you should have concluded that the 8 factors jointly were only moderately correlated at best.
(p-value doesnt count as this not a random process, and American Statistical Association has for a long time now dissuaded its use as misleading)
No "result" can be concluded from the data about Mr. Market even on a "somewhat right" basis.
I think its better if you scope down the analysis to a per country basis and on a multi year basis (and also show the dispersions so people know how erratic mr. market can be) . that way you can make series of videos and at the same time get a more meaningful conclusions.
cheers!
P.S. i regularly watch and re watch your videos!
@@TheSwedishInvestor I would really appreciate statistics aswell. If you could, make seperate videoes just more indepth with statistics as an extension of your previous videoes, I would really appreciate that.
Cheers for the feedback pjc_deleon. I do not agree with the conclusion that "no result can be concluded from the data about Mr. Market even on a somewhat right basis" though.
If you take a table like the one from 09:15 in the video, you need no more statistics to conclude that estimated future EPS growth has a strong influence on P/E, at least not in my opinion. Things wouldn't line up perfectly like that otherwise, it just won't happen. You'd need some insane variance in P/E for it, and even then, it would be a freak occurrence. That goes for many of the other tables as well, but the strongest argument can be made about this one.
If the r2 would have been 1.0, the 8 variables that I found would have perfectly explained the variance in P/E, which, since there are many "softer" variables and probably some mathematical ones that I haven't found yet, just isn't in the realm of possibilities. Moreover, since I assume that Mr. Market isn't fully rational (I'm not a fan of any hard form of EMH), I'd assume that, even if you find all of the perfect variables and were able to express them in an OLS, you still wouldn't get to 1.0. But I'd be curious to hear what you think a minimum r2 would be to be on a "somewhat right basis". Unfortunately, stock picking isn't a science like medicine or physics, a somewhat right basis is oftentimes the best we can hope for :)
Benjamin Gray-Ham 😉
I can only manage to pronounce either "Graham" OR "quite" right in the same video, never both simultaneously.
Jätte bra
peter lynch said to not buy stocks from companies above a 15 P/E ratio
Benjamin Graham also said to invest in stocks paying high dividends but currently there's little companies paying such to their investors
That’s why I buy stocks with P/E N/A lmao
I'm not kidding when I say that the market crash and high inflation have me really stressed out and worried about retirement. I've been in the red for a while now and although people say these crisis has it perks, I'm losing my mind but I get it. Investing is a long-term game. It's just hard to focus on the long term playbook when I'm already in a massive loss
I'm in the same situation as you and I can’t seem to focus on the long run when I should be retiring in 3years. I’ve got good companies in my portfolio and a good amount invested, but profits keeps stalling, does it mean this recession/unstable market doesn’t provide any calculated risk opportunities to make profit?
If Market doesn't Like ROA, I will gladly buy (some of) those companies.
Watching from India here... and when I saw MOIL and CESC on the list at the end... I nearly threw up. Useless junk companies.
Also, regarding the difference between India and pakistan valuations - consider two houses on the same street but one is literally on fire and other is recently refurbished... how differently will you value those?
MOIL Compines loss making Compines
Btc looks more and more viable
Exro technologies
Roa is a metric for profitability no? From what I see, higher roa, lower p/e signals higher dividends usually
Is 2023 a bull or bear market?
Bear. But bull is coming
@@I_Am_Enlighten Seems the other way around, bull but bear is coming
@@shynnsup8383 it recycles like the weather sunny, rainy stormy. It rains the sun absorbs the rain and it rains again. Up down or sideways im buying
@@I_Am_Enlighten You should buy low with a good margin of safety bro.
@@shynnsup8383 yeah I’m still learning im not just buying assets im buying results
11:02 do even know what is the condition Pakistan😂😂😂😂😂😂
strange companies in the list 😀
Maybe a giant flood that destroyed Pakistan could explain..
I just buy when the line goes way down and also read news articles.
If I wonder about a company's numbers and future and stuff, I just go to forums like reddit and hear what all the smart people have to say about it before I buy.
Made on average around $300 a month with this stupid idiot strategy.
God chose HEX and Richard Heart ❤️ 💙 💜 proof is in the charts.
So companies in Pakistan are undervalued. Wanna invest? 😂
this entire video is just factor investing repackaged with an added touch of active fundamental criteria
India has huge market, good growth chances...growing income and spending capacity.
Don't even name Pakistan alongside that nation😂😂 it's ridden with radicals and terror!sts, who won't allow it to work and add their loan issues it's rich at 5 PE
It values money printing
I love money printing