Welcome to Investing for Beginners podcast! In today's episode, we will talk about the five financial ratios every investor, beginner or not, should know! There's a multitude of ratios out there and each has their own purpose but we believe that these five are the most important and should be in every investor's arsenal in valuing a business so listen on!
Timestamps of the episode:
-The most popular metric of them all: The price to earnings ratio (P/E) [02:00]
-The limitations of using the p/e ratio and the justification it gets depending on each industries it belongs. [04:33]
-Defining the price to free cash flow ratio (P/CF) and why it is a more superior ratio than P/E. [09:27]
-How to calculate the p/e and p/cf ratios into earnings yield. [14:52]
-Now into the efficiency ratios: Return on Equity (ROE) and Return on Invested Capital (ROIC) [15:45]
-Why always looking in a longer timeframe helps visualize the impact of ratios in a business. [21:38]
-Balance sheet ratio: Debt to equity (D/E) [24:40]
-The importance of knowing the context behind the d/e numbers and how it differs across each industry average. [27:04]
-What is an interest coverage ratio and what it tells you. [31:15]
Note: Timestamps may differ and are approximate, depending on your podcast player.
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IFB292: 5 Metrics Every Beginner Investor Should Know

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Welcome to another episode of The Investing For Beginners Podcast. I'm your host, Dave, joined by Andrew. Today, we're exploring essential tools every stock picker needs, from Excel to advanced platforms like Bamsec and Finchat IO. We’ll discuss how these tools aid in understanding business operations, verifying financial data, and making informed investment decisions.
Andrew and I will share our experiences with tools like Excel and the Little Package Evaluation for financial analysis and valuation. We'll also discuss diversifying investment idea sources, from financial statements to social media insights from Twitter and Substack.
Today’s goal is to show you how to use these tools to understand a company's revenue generation and its potential as an investment. Whether you’re generating new investment ideas or refining strategies, this episode offers valuable advice to enhance your investing skills. Tune in to learn how to leverage these tools to advance your investment acumen.
00:00 Google helps understand businesses with tools.
05:03 Visualizing helps me understand complex concepts better.
08:58 Comparing company revenues requires adjusting for scale.
12:42 Consider investing in companies with Finviz.com.
13:32 Investment ideas from blogs and newsletters save time.
18:09 Discover investment ideas through investor portfolio analysis.
22:12 Substack offers more free content but limited information.
24:15 Use dollar sign and capital ticker symbol.
28:48 Excel simplifies financial analysis; valuable tool.
32:26 Discounted cash flow models determine future cash worth.
35:34 Estimate revenue and terminal growth rates realistically.
37:50 Comparison of financial analysis tools and platforms.
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Back to Basics: Essential Tools for Investors

Welcome to a fascinating new episode of The Investing For Beginners Podcast! Today, your hosts Andrew and Dave will dive into the much-anticipated IPO of Reddit. As seasoned investors who typically steer clear of IPOs, they find it intriguing to unpack Reddit’s introductory documents to better understand its financial health and strategic direction. Throughout the episode, they'll explore Reddit’s user engagement and compare its financial metrics, like the Average Revenue Per User (ARPU), with those of other social media giants such as Facebook and Twitter. Despite the challenges in evaluating a fresh IPO like Reddit, they’ll dissect the S-1 document, spotlight the company's R&D allocations, and discuss the implications of its user base growth potential. Whether you’re a potential investor or just curious about Reddit’s next steps in the public sphere, this episode will equip you with key insights into making more informed investment decisions. Stay tuned as Andrew and Dave weigh the risks and opportunities that come with investing in an IPO, all while emphasizing the importance of a margin of safety.
00:00 Investing for Beginners podcast analyzes Reddit's recent IPO.
03:29 IPO: Company goes public, anyone can buy.
08:48 Public companies need proven track record, growth runway.
11:17 Reddit offers intellectual engagement, less aimless scrolling.
15:29 Comparing Facebook and Reddit's business monetization strategies.
18:46 Concerns about Reddit's future growth and profitability.
20:47 Muted response to Reddit going public discussed.
23:29 Good revenue growth, high R&D spend. Concerns.
29:20 Reddit has loyal user base, lacks investor appeal.
32:21 Discussion on IPOs, Reddit's IPO, and investment.
Today's show is brought to you by:
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Start your free online visit today at Hims.com/INVESTING
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Find great investments at Value Spotlight
Have questions? Send them to newsletter@einvestingforbeginners.com
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Bird's Eye View: Reddit IPO

Welcome back to another episode of The Investing For Beginners Podcast. Today, hosts Dave and Andrew dive deep into the individual investor's unique advantage over the professional sphere, focusing on the power of time horizon. Tune in as they unravel how personal investment goals differ fundamentally from institutional objectives, and how that structural freedom can lead to superior long-term results. They'll also discuss the inherent disadvantages faced by fund managers, constrained by short-term performance pressures and large capital inflows and outflows. Whether you're new to investing or looking to refine your approach, this episode is packed with insights on leveraging time to enhance your investment strategy, understand market dynamics, and discover why sometimes, the best action is no action at all. Join us as we explore how playing a different game than institutional investors can be your biggest advantage.
00:00 Investing with different strategy, focusing on growth.
06:06 Funds judged on performance, affect inflows/outflows.
09:43 Market forces drive stock ownership patterns.
13:24 Focus on long-term value, not market timing.
16:43 Investing doesn't have to be complicated, stressful.
19:53 Hidden gems in smaller market cap companies.
22:43 Microcap investing doesn't require style change.
Today's show is brought to you by:
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Find great investments at Value Spotlight
Have questions? Send them to newsletter@einvestingforbeginners.com
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Back to Basics: Using Time Horizons to Your Investment Advantage

Welcome back to The Investing for Beginners Podcast. In today's episode 345, we're tackling your pressing questions on making the most out of your investments and preparing for a comfortable retirement. First off, a big shoutout to Enrique, one of our long-time listeners, for a thought-provoking query on the 4% rule and the smartest withdrawal strategies for a sustainable retirement. Also, Enrique, Andrew truly appreciates your marathon training tip—yes, he survived the race! Then, we move on to Martin's dilemma about the staggering expense charges on his educator 403B account. You'll get our take on navigating the world of fees that could chip away at your nest egg and explore alternative investment strategies that align with your financial future. Are hefty fees eating into your retirement funds?
00:00 4% rule: living from stock market gains.
04:15 Consider tax implications when managing retirement accounts.
07:26 Retirement planning expert can improve financial outlook.
10:03 IRA comes in two flavors for taxes.
13:59 Max out Roth IRA, consider long-term fees.
15:56 Watch out for high expense ratios when investing.
Today's show is brought to you by:
Go to monarchmoney.com/BEGINNERS for an extended 30 day free trial!
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Find great investments at Value Spotlight
Have questions? Send them to newsletter@einvestingforbeginners.com
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IFB345: Listener Q&A - How to Utilize the 4% Rule for Lasting Wealth

Dave: Welcome, listeners, to The Investing For Beginners Podcast. Today's discussion, "Back to the Basics" delves into the intricacies of portfolio sizing and diversification.
Andrew: We'll explore traditional and contemporary thoughts on portfolio structure, the role of diversification, and the influence of market trends on investment choices.
Dave: Plus, insights on position sizing: when to start small, when to increase, and how to manage your investments within your circle of competence.
Andrew: We'll be sharing our own portfolio experiences, addressing the balance between knowledge and market unpredictability.
Dave: Join us for this and future episodes as we guide you through the investment landscape with a margin of safety as your compass.
00:00 Build diversified portfolio, balance exposure, avoid risk.
04:59 Manageable portfolio size: 15-20 companies, 5% per stock.
08:00 Consider portfolio diversity, own what you understand.
12:10 Portfolio strategy: comfort, familiarity, and company growth.
14:11 Suggest considering concentration versus smaller position sizes.
18:05 Diversified portfolio aiming for around 25 companies.
21:05 Unsure about investing, knowledge may hinder decisions.
24:33 Being aware of market trends is crucial.
26:42 Be aware of IPOs like DoorDash's.
30:34 Knowledge leads to bigger investment opportunity.
33:00 Have a great week, talk to you!
Today's show is brought to you by:
Go to monarchmoney.com/BEGINNERS for an extended 30 day free trial!
For more insight like this into investing and stock selection for beginners, visit stockmarketpdf.com 
Find great investments at Value Spotlight
Have questions? Send them to newsletter@einvestingforbeginners.com
 DCF Demystified Link
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IFB292: 5 Metrics Every Beginner Investor Should Know

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