The Art of Valuation 🎨 🖌️

Valuation Isn't a Science, It's an Art 🖼️

Valuation is an art.

These no perfect formula or methodology to value a stock.

So for most people, understanding valuation is the scariest part of investing.

Everyone knows that companies like $MSFT, $AAPL, and $AMZN have strong business models.

So why doesn't everyone just buy the *best* businesses!?

Because it could potentially cost you hundreds of thousands long term.

Look at this example. 👇

Imagine that you go to the store. 🛒

You come across a small money printing machine that prints $100 dollars every single year.

We'll call this small money printer *S*.

Right next to it is another money printing machine.

But this is a BIG money printing machine.

This one print's $1,000 every single year. 🤯

We'll call this BIG money printer *B*.

So *S* produces $100 a year and *B* produces $1,000 a year.

So which one should we buy!?

Based on the information given to us, we have no idea.

We need to value these machines.

Ideally, we'd like to see around a 10% return on our money.

We look at the price tag of *B* (the big money printer).

It costs $20,000!! 💰

This means we would be getting a 5% return annually on our investment from *B*. ($1,000/$20,000) = 5%.

Meanwhile, money printer *S* (the small money printer) costs $1,000.

This means we would be getting a 10% return annually on our investment from *S*. ($100/$1,000) = 10%.

So although money printer *B* is technically the better machine, we can see better returns from money printer *S*.

Why?

Because of its valuation. 🎨

Want to know the exciting part?

There are undervalued money printers for sale in the market everywhere.

But you have to learn how to uncover them.

Learning how to find them and value them is the key to unlocking a whole new world of investing possibilities. 🔐

P.S.- Tickerdata is my spreadsheet tool I use to make stock valuation easy! :)

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Check out these resources:

Tickerdata 🚀 (My automated spreadsheets and instant stock data for Google Sheets!)

Interactive Brokers 💰 (My favorite place to buy and sell stocks all around the world!)

Seeking Alpha 🔥 (My favorite investment research platform!)

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Other News…

At the end of every month, I send out a newsletter to my paid newsletter subscribers with a list/spreadsheet of all the dividend stocks that I believe to be currently undervalued.

This sheet was received by over 300 dividend investors last month. (Wow!)

If you’d like to receive this sheet at the end of this month, you can sign up here:

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That’s all for now!

See you next week!

Dividendology 🚀