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 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.
***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!
Video Summary
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I'm a happy and valued investor and also I was the trader in the past.
And after years long to follow the technical analysis as a trader or using the fundamental
analysis as a valued investor, I figured out that like even Bo Wei give me a good income
and also good profit.
And even the trader give me more profit than when I was, I am the valued investor.
But in the end, I decided I would like to become the valued investor.
If you are the one that just want to invest in some company and just live it for 10 years
and every year you just need to look at them once a time and then decide whether you want
to continue or whether you want to withdraw from that company.
And then you can have a long time or the whole year just laid out and just live and also
do not wonder about the up and down of the market because you know very well about the
financial and also the value of the company, then valued investor is something for you.
And just for you like to know, like even I got in the past as a trader, I can get about
how I can say like 300 to 1000% ROI as a trader, but then I will lose the ROI very
easily.
And then when I was the valued investor, the highest time I can get the ROI, return on
the net investment around 150%.
And for example, the last year when I sold out my portfolio, I got about 110% in ROI.
But most of the time, I have never lose when I invest like the valued investor and when
I even I lose, but in my portfolio in the end, they give me the ROI in average about
at least lowest is 50%.
So for me, this is a very good and also good mental signal and also the good income for
me because I never worry about like how much I lost, but most of the time, I will just
consider how more I can get.
So that's why I love to become a valued investor.
First, most of the time, I always get more and rarely lose and even I lose, I never facing
the situation like the trader lose all.
And if I guess I mostly get at least for 50% and but until now, I can get like normally
in average around 100% of what I investing for a long term.
And this is really good for me in the value and in the income and the second is very good
for me in the health because once a year, I just need to update my portfolio one time
to decide whether I should keep or I should buy more or I should sell some of my portfolio.
So that's the good thing about value investing.
So if you also love like that, so let's continue and this series will give you the overall
and also how to use my file, my Excel file you can see here to calculate and to use it
for your decision as a value investor.
And first, we just go to for anyone who loves to become a value investor, you just need
to go through this general section with me first.
The first thing is that like whenever you heard about value investing, maybe you already
heard like this sentence like buy when the middle market offer the business at a discount
to fair value.
And then most of people will told you like you need to find the fair value, you need
to find the intrinsic value of the company means the red line and then give you the margin
of safety maybe 30% or 50% of the price and then you will establish the green line.
So then whenever the market price is below the intrinsic value or even below the green
line, the margin of safety, that is the time you can buy the market and the company with
the discount price and this is a very good chance for you to do this.
But the question is how come you can calculate the intrinsic value?
How?
Where are the methods that you can apply or any app that you can use to calculate the
intrinsic value?
The answer is yes, you have.
You have a lot of extension to help you to calculate the company fair value.
And this is one of the extension I will show you and guide you how to integrate into your
Excel sheet and this is very simple.
But as you know, like in here you can see like even this one, they come out with the
fair value.
They also have a lot of way to calculate, right?
And I also have my own calculation that can help you to calculate your fair value.
And I also show you in the next video how to use my file and also how to use other extension
to calculate your intrinsic value.
And even the question here is what should be the good thing and how I can calculate
the intrinsic value if I want to calculate by myself and not based on the file Anfi show
me or the extension that Anfi will show me later.
Okay, I also have a way to help you to do like that.
This is, you read this book, Warren Buffett Stock Portfolio for Mary Buffett, the doctor-in-law
of Warren Buffett.
And in this book, she will show you how Warren Buffett calculate and estimate the price of
the company he wants to invest in and how you identify this company has the term he
called durable competitive advantage in the very easy way and in the short brief.
And that is how you can learn from it.
And for me, like I also even you just want to use my file or the extension I will show
you later.
I also would like you to read this book of the Warren Buffett so that you can understand
one up to me like one of the very interesting term that created by Warren Buffett called
it equity bond rate.
And how you can identify the company has the good equity bond rate.
And based on that, you calculate the price and also the value of the company you want
to invest in.
And this is really good thing I love about this philosophy and this way of calculation
and also the knowledge that Warren Buffett sharing to us via Mary Buffett.
So I love you.
I would like you to read this book and know how to identify the what he called the equity
bond rate and use it to calculate the fair price and the real value of the company you
want to invest in.
And then you solve the first thing very important of the value investor.
And you can if you say like, oh, now I got everything now I can based on the price and
I can make the decision.
I read the book.
And also I know like I follow Warren Buffett way to calculate the price.
And then I know like, ah, everything is so good.
And I just investing in.
I would say that if you do like that, you just have a 50% of a chance to win the market.
The reason is ask yourself, if you find the current price is lower than the fair price
or the margin of safety and does it have a very good discount price, whether the company
have something Warren Buffett called durable competitive advantage that ensure they can
keep this advantage in a long term, at least for 10 years.
How do you know?
Maybe you will think, okay, just based on their growth value, maybe their revenue growth,
their ROI growth, something like that.
And then if the role of the company is in the uptrend, then it have the very good thing
to invest in.
Are you sure about that?
For me, I'm not so sure about that because as you can see here, the pink line is the
role of the company and the role is very high.
But then if you look at the value, you see like the value somehow is decreasing.
And if you invest in this company, again, if you look at this chart, do you think it's
good or worth to invest in?
And then when you look at this chart again, even the role is decreased and the value still
somehow keeps stable or also increase again.
Whether you should invest in this company or not, if you just look at the chart and
you apply some of the technical analysis tools, maybe it's not so clear for you like whether
you should keep this company for 10 years or not.
And that's why I suggest you to read the Warren Buffett and the Interpretation of Financial
Statement.
Also, from the author, Mary Buffett, daughter-in-law of Warren Buffett, she will show you how Warren
Buffett read the financial statement, the income statement, balance sheet, and the
cash flow statement, and what is the criteria he put for each thing in those financial statements
so that he can make the decision like whether the company has the thing he called durable
competitive advantage or not.
And then after you read the book, you also can use my file.
The file here is not only show you how to calculate the intrinsic price, but I also
can show you and give you a chance with the thing here I call like do the financial health
check for you based on the competitive advantage, so durable competitive advantage criteria
of Warren Buffett as you can see here.
So based on everything here, you can, based on this, to make the decision whether you
how much you will rating for this element and this criteria, and then this will help
you to automatically to give you all the financial information so that you can make the decision
better.
So this is something I would like to go through with you during my series in the next videos
So that you can understand first how you can get the price, right?
And then how you should do the financial health check based on my table.
In the end, you will get the summary here that you can base on the financial health
check, the price, and the ROI so that you can decide you want to put it in your portfolio
or not.
And then if you put it in your portfolio, then you can thinking of like how you should
invest in this portfolio.
So for example, I select this three stocks and then I calculate the proportion of them
and choose in the end, I would like to decide like what should be the money I invest, how
much money I would invest in them.
And in the end, I will make the decision like you can see here.
So this is how I can help you with the price and this is totally free for you to use because
I said like I just want to have more people that can have this knowledge and that like
you can have a life like me just invest in once a year and every year you just look back
and to decide whether you should buy or you should sell.
And that's it.
And that is how you can be feel very like easily and also will feel very freely in your
mind and your mental health is always or not always it may be most of the time have the
good state of mind and maybe you also can achieve something like me like you cannot
win big as a trader but you never lose big like the trader because most of the time you
will get your own ROI, return on investment at least for 50% or maybe in average like
me 100% and maybe sometimes 150% so that is something I hope during my series in the many
next videos, not many I think like 2 or 3 is enough then you will know how to use my
file and also use all the extensions to help you to make the decision.
Thank you for listening and hope that you like the video and you can share with your
friends and with anyone who love to become the value investor so that many people can
get the very good income outside of your normal job, right?
So hopefully it will help you and see you in the next video.
Thank you.
