Part 1: What does it take to become a value investor?
Hello everyone, I’m Alfie, a value investor deeply inspired by Warren Buffett’s approach to investing—focusing on buying companies you can confidently hold for 10-20 years.
In this video, I will share with you 2 points to become a value investor from my knowledge and experience. This 2 points has been helping me create a portfolio which has good ROI after 5-10 years: 50%-150%. And hope they will be helpful to you, too:
1. You must know how to calcualte the Intrinsic value (or fair value) of the company you want to buy and keep for at least 10 years. You can achieve it by:
- Using my file to calculate: https://docs.google.com/spreadsheets/d/1O5U-xVfajGBRYm8eaf9ohKcBqptmyIXWVxf4TY5-wzM/edit?usp=sharing
- Using other google extensions or apps (I will introduce you 2 tools in this serries)
- Read the book: **The Warren Buffett Stock Portfolio, which will give you a Equity Bond Rate method of Warren.
2. Doing Financial health check to identify companies that have what Warren call "Durable Competitive Advantage"
- You should read this book first: **Warren Buffett and the Interpretation of Financial Statements
- Then you can use my file as a checklist for your financial check (I will show you later in my serries)
***Action step: practice and doing your real investment.
- If you do not know where and how to start, you can download TradeRepublic to do the investment as I am: https://refnocode.trade.re/14jtcb9l
Disclaimer: The information and file I’m sharing are for reference only—your investment decisions are your own responsibility!
Further Information about my file:
The file I’m providing has three key sections:
1. **Price Check**: Use various valuation methods to determine a stock’s fair value (or a company’s intrinsic value).
2. **Financial Health Check**: Assess a company’s durable competitive advantage using multiple metrics from financial statements like the Income Statement, Balance Sheet, Cash Flow Statement, and more.
3. **Portfolio Management**: Get guidance on allocating your funds across your chosen investments, plus a simple way to track your portfolio.
Check out this video for instructions on activating the file (it’s based on an older version, but the process is the same):
https://www.ganjingworld.com/video/1gs4679lj8m4IXEuWJvdSll6t1vm1c
And here’s a guide to using the file:
https://www.ganjingworld.com/channel/1fsnpltmu0m5xpABNy1cad0t41760c/playlist/1gs4664muqt6PmFNIUJzj0j1hc0p
***Note: When you open the file, you might notice errors due to an expired extension. No worries—just make a copy, install the extension, and it’ll activate a trial period for you. Once that’s done, all the formulas will work perfectly!