G'day.
I understand i'm new here but after browsing around i couldn't find any answers specific to my question, or find any rules stating that this is improper, so apologies if it is.
I have been reading and trying to learn about the stock market for about a year or two now, (im 18) and ive been thinking of investing now that i finally have some disposable income.
I was curious if i could maybe scab off the knowledge of some more experienced investors.
My idea was to invest in a wide range of businesses that i have some degree of knowledge about, I've read the intelligent investor, the rest of benjamins grahams books and pretty much anything on warren buffet, so im trying to invest on the basis of fundamentals as opposed to speculation.
As such my first "filter" was going to be an intrinsic value calculation, the more mainstream of them (using average growth rate to extrapolate the free cash flow, discounting that and dividing by shares outstanding to get the intrinsic value per share)
Using this method a lot of companies that seem to do relatively well, come out with a negative result and a lot of companies seem to hugely fluctuate in comparison to public opinion for example, it seems as if people think telstra is overvalued whereas using the DCF calc it says that telstra is actually worth double its current stock price (6.9$)
I thought that the free cash flow extrapolation method of calculating intrinsic value would be quite a strong tell of a companies health? Since it essentially represents profitability, so i guess one question is: Is it common to get extremely differing results in these calculations (in regards to a companies general opinion e.g. telstra? and if not would anyone be willing to help me out/ check over my methods?)
I was also wondering if this method of trading is advisable?
1) use the intrinsic value calc described above to screen for undervalued companies
2) Apply more financial calculations to the business's statements e.g. whether they've been buying back stock, whether their cash from operating activities is growing and whether theyre paying off debt
3) perform a more speculative analysis, see the generals opinion, invest when the generals opinion might be low or the companies image tarnished etc.
Im sorry for this lengthy paragraph, and i thank anyone in advance who takes the time out to read and/or respond to this.
I think it might be proper just to elaborate on a few things since i'm a new face. i'm not investing in the hopes to get rich (although that would be rather nice) however i do hope that If i continue on this path of enriching my financial fluency and investing i might be financially free at a fairly young age, I understand this is easier said then done, but it is my goal nonetheless.
Thank you again.
I understand i'm new here but after browsing around i couldn't find any answers specific to my question, or find any rules stating that this is improper, so apologies if it is.
I have been reading and trying to learn about the stock market for about a year or two now, (im 18) and ive been thinking of investing now that i finally have some disposable income.
I was curious if i could maybe scab off the knowledge of some more experienced investors.
My idea was to invest in a wide range of businesses that i have some degree of knowledge about, I've read the intelligent investor, the rest of benjamins grahams books and pretty much anything on warren buffet, so im trying to invest on the basis of fundamentals as opposed to speculation.
As such my first "filter" was going to be an intrinsic value calculation, the more mainstream of them (using average growth rate to extrapolate the free cash flow, discounting that and dividing by shares outstanding to get the intrinsic value per share)
Using this method a lot of companies that seem to do relatively well, come out with a negative result and a lot of companies seem to hugely fluctuate in comparison to public opinion for example, it seems as if people think telstra is overvalued whereas using the DCF calc it says that telstra is actually worth double its current stock price (6.9$)
I thought that the free cash flow extrapolation method of calculating intrinsic value would be quite a strong tell of a companies health? Since it essentially represents profitability, so i guess one question is: Is it common to get extremely differing results in these calculations (in regards to a companies general opinion e.g. telstra? and if not would anyone be willing to help me out/ check over my methods?)
I was also wondering if this method of trading is advisable?
1) use the intrinsic value calc described above to screen for undervalued companies
2) Apply more financial calculations to the business's statements e.g. whether they've been buying back stock, whether their cash from operating activities is growing and whether theyre paying off debt
3) perform a more speculative analysis, see the generals opinion, invest when the generals opinion might be low or the companies image tarnished etc.
Im sorry for this lengthy paragraph, and i thank anyone in advance who takes the time out to read and/or respond to this.
I think it might be proper just to elaborate on a few things since i'm a new face. i'm not investing in the hopes to get rich (although that would be rather nice) however i do hope that If i continue on this path of enriching my financial fluency and investing i might be financially free at a fairly young age, I understand this is easier said then done, but it is my goal nonetheless.
Thank you again.