Best Required Return for Investors to Use?

[@LearntoInvest]

Sorry the website discussion was so long. I shot this video before my previous apology video kzbin.info/www/bejne/mJublaNrdsuXa5o . I’ll clean it up going forward. 😊

[@arrrryyy]

I would seriously consider to sign up to your website. Just wanted to know what analysts earning estimates will you be using - Bloomberg, Factset, and Thomson ?

[@cfii2fly]

I have jumped ship from another community into the Learn to Invest. I like the academics and research that Jimmy brings to his community.

[@LearntoInvest]

Welcome aboard 😀👍🎯

[@altairjb]

I think Jimmy is one of the best explaining things. I am using a slightly modified version of his DCF model (older video and still one of the best out there). I built a lot more around it, including different valuation methods and that has taught me a lot. And that's why I am not subscribed to any software, and don't plan on subscribing to Jimmy's either, sorry :( doing things on my own just makes me better. It might not be as good, but it forces me to grow. That said, thank you Jimmy! You are really one of the best in the YT finance space.

[@hwdiswbog74]

This is a really good video, back testing WACC vs arbitrary required rate of return. Awesome video Jimmy.

[@jmveninvesting9406]

That backtest is very flawed... You say you would have never had the opportunity to buy the stock based on one 'random' datapoint per year. Better would have been to compare the DCF valuation to the lowest price of that year, or to all prices during the year.

[@stockonomics1016]

Thanks for the great information as always, I'm considering joining the community. Regarding the DCF WACC chart, if we added the margin of safety to the whole mix, won't we end up with something like having a 12.5% and thus making the stock always overvalued?

[@CaseyBurnsInvesting]

We can’t ever forget that we could get an even better return investing in our own operation when publicly traded assets are overpriced.

[@MyDreamside]

This test is one of the kind to see how valuation and pricing correlates

[@FelixMongeon]

Thanks for the explaination of why you use lower discount rate than 12.5%. Your tests of average return depending on Wacc for two stocks are interesting. I look forward to see more of theses tests if it's something you want to do.

[@LearntoInvest]

I plan on doing a whole bunch of them 😀 so we can see how well they actually work

[@heylookitsherbie]

@@LearntoInvest Hey Jimmy, just wondering if you had the chance to test this out any further. I would love to see the results!

[@matbienczyk452]

Hey Jimmy - I have one recommendation. Where it says "Market Cap" and "Shares Outstanding" in the top left, it would be beneficial to know whether these are in $K's or $M's. It may be simple or known, but once you start going through dozens of company's, you may lose track of what the real number is.

[@LearntoInvest]

Good idea 👍

[@ioritzobieta3699]

I like to add another "layer of security" assuming a higher interest rate will come sooner or later. I usually use 10-12,5% RE. Good thing is you can still find businesses trading below their fair value, using a margin of safety on the RE as well as on the FCF estimates

[@luisalbertobauerlandivar5638]

Jimmy, Sven Carlin and The Popular Investor (Rob) are by far the best stock market YT Channels by quite a margin.

[@russomaster]

I always like your videos but now you are either talking about you web or the sames companies. please try new companies. thanks

[@LearntoInvest]

Will do!!! 👍

[@OsiyoFotimaMaryam]

Was thinking the same

[@MR1shank]

I see what your saying, but based on the fact you only 10-20 good stocks in your portfolio, you have the ability to be much more discerning and pick rate of return of 10%+ to add nice margin of safety. Plus if I put 12.5% and I am seeing green valuation this tells me it is truly undervalued.

[@calvinlam949]

Hi Jimmy, great work as always! I was just wondering if you'd be willing to share where you got the data for historic WACC and cashflow predictions for each year?

[@popkahchin]

for analyst prediction he told me its from bloomberg terminal which most of us dont have access to

Do you apply the margin of safety after the DCF evaluation or do you do it in the required return I mean if you want 10% margin of safety your required return is 7% do you use 7.7% instead to reflect that 10% or after the whole evaluation at 7% you discunt 10% for example if it was 100$ you end with 90$ as your target price, thanks for share this info, always helpful and clear.

[@e.donaire2015]

Hi Jimmy, I’m thinking on becoming a Patreon member, I know you still don’t have the website prepared; however, I just want to see some actualized DCF valuations, at least the ones that you had in the “Shorts” channel, Can I get that in your discord server or in the KZbin livestreams? If not, I have no problem to wait until the website is ready. Thanks and keep up with the great work, Merry Christmas 😊

[@LearntoInvest]

Hey, yes we do a weekly livestream every Friday on the discord where we do a bunch of dcf calculations for the community

[@davidgarza995]

Jimmy can you please add more information on the stock for your website would love to see revenue cost of operation CARG and things of that nature. Thank you jimmy i am looking forward to the release you have done an amazing job and have taught me more about investing than any college course. God bless

[@LearntoInvest]

That’s a good idea 👍

[@briankelly1240]

@Learn to invest this is for required return, I have a separate goal return of 20% or more or I don't consider worth my time. Do you have anything like this?

[@ivanstimac8828]

Hey Jimmy. Where do you get the Cash flow estimations from analysts?

[@franco521]

The 20-year Aaa bond yields about 2.50%. What is the logic behind looking at such a long maturity?

[@dhirajmeenavilli5508]

It's a measure of opportunity cost in a sense, so it's the second best idea off of which you compare you're best idea to. So if you plan on only holding 10 years then you can use the 10 year corporate bond, personally I just use absolute return of 15%, I think that adequately covers any possible alternative investment, but to each their own.

[@michaelabraham7747]

Great content...but did you get a new mic

[@LearntoInvest]

We’ve been messing with the mic trying to get it better. How does it sounds, better or worse

[@michaelabraham7747]

@@LearntoInvest It's really clear...but you might need a filter to prevent the breathing from coming through.

[@LearntoInvest]

For sure, we ordered a board to help clear that up, hopefully next week will be a bit better

[@1m2ogaming]

7.5% feels like it can work on every company so you're not quite selective.

[@LearntoInvest]

in this market, even with a 7.5 % required return, most stocks get rejected as they still appear to be overvalued

[@1m2ogaming]

With decent rev growth and not so high FCF multiple companies feels quite easy with 10 years DCF.

[@juliuscaesar5360]

Not necessarily. I’ve applied this discount rate on many companies and plenty are still overvalued; I’m using an unlevered DCF

[@1m2ogaming]

@@juliuscaesar5360 Here are a couple of TIckers can you give me your results with 10 years analysis i'm curious: FB, TX, Baba, PHM. Curious how many % margin of safety there will be in your DCF

[@Conangreer]

@@LearntoInvest That’s because you only looking at large caps Jimmy. You should expand your horizon to companies less followed to get better returns

[@DS-vx3wf]

should do an Analysis on Micron (MU). I'm surprised you haven't done that yet.

[@stephaniebeaton3939]

Just seeking clarification 11:00 min Microsoft. So if investor held off investing in Microsoft for 11 years and then bought they would make more? That's a long time.

[@walterconn5637]

Thanks! Good insight

[@vestedinterest5655]

Appreciate the content. Do you offer a Veterans discount?

[@Kristel713]

Yes I do hit me up here ☝️⬆️☝️☝️

[@djpuplex]

Financial Analyst are economic weathermen.

[@Neon_Dre]

Nice video 👍🏽

[@AK-hi4hm]

do you think analysts estimates are trustworthy or is it better to guesstimate yourself

[@luisalbertobauerlandivar5638]

From what I've seen from his videos, he likes analyst estimates as he believes they're very accurate considering it's their full time jobs.

[@jameslong7365]

Jimmy, discord charges their monthly fee on the first of every month so folks who sign up today for instance will have to pay AGAIN on 1st Jan 2022. Sharing this here in case interested viewers do not know how discord levies their charge.

[@luisalbertobauerlandivar5638]

That's not discord. It's Patreon that does that.

[@jameslong7365]

@@luisalbertobauerlandivar5638 Thanks for clarifying! That's what I meant

[@cfii2fly]

Fantastic

[@Fatalinvesting]

I always wondered why you choose 7.5%?

[@dogerman11]

Tacos

[@l3rucewayne1]

? Ice cream

[@rafaelcarmo5562]

Peanut butter

[@mohamedadora1655]

n the name of of Allah the Merciful Peace be upon those who follow guidance I see that you are smart, planning for the future and want to invest in companies for a long time in order to achieve the highest return on the investment and examine the assets well. I invite you to Islam No, he is not like you, he follows others, because the hereafter is the best investment Imagine if you succeeded in investing in the world I failed in the hereafter and entered the fire Submit to God, Lord of the worlds, and be saved from God’s punishment in the next life And enter Heaven in peace Do not be deceived by the life of the world The life of this world is but a little enjoyment And that the afterlife is the decision-making house