Join Jim Stice for an in-depth discussion in this video Final advice on using business valuation techniques, part of Finance Foundations: Business Valuation.
- So now we know a bit about business valuation.…- We know about discounted cash flow analysis, DCF,…and we've also learned how to use market-based multiples…to estimate the value of a business.…- So here is the big question…that is in your mind right now.…Can we, as individual investors, use our ability…to do business valuation to identify…winning and losing stocks in the stock market?…- And the answer is no.…Let me repeat that.…No.…What was the answer?…No, no, no.…
- Now, why can't we, clever people,…pick winning and losing stocks?…We know about market multiples.…We know about DCF.…Why can't we beat the market?…- Simply stated, the market is too fast.…The market response to new information, fast.…In 15 minutes, the smart people in New York…are constantly using super computers…to do data analysis to find mispriced publicly traded stocks…- No academic research in accounting or finance…has found any reliable evidence for profitable,…implementable trading strategies…based on financial statement numbers…or based on the business valuation models…
Make sure to check out the Stice brothers' other accounting and finance courses to understand the other economic factors that impact your business.
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- Using market, cost, and income approaches to business valuation
- Valuing homes
- Valuing companies by multiples
- Using price-to-sales ratios to value companies
- Using discounted cash-flow analysis to estimate value
- Valuing McDonald's as a case study