A Newbie Guide to Investing

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Thanks all for your help. Really appreciated that there are kind souls out there willing to help. I've understand the book value and nav. May i know what is RNAV.

For the discounted earnings i can sort of link it back to the stock price but it doesnt seem to make sense to me. I calculate the future earnings and discount it accordimg to inflation and its growth rate but what i get is just EPS. Should i use p/e to deduce the intrinsic value. Would it be accurate as p/e is only for a year?

Have a good day ans God bless!
Reply
Thanks all for your help. Really appreciated that there are kind souls out there willing to help. I've understand the book value and nav. May i know what is RNAV.

For the discounted earnings i can sort of link it back to the stock price but it doesnt seem to make sense to me. I calculate the future earnings and discount it accordimg to inflation and its growth rate but what i get is just EPS. Should i use p/e to deduce the intrinsic value. Would it be accurate as p/e is only for a year?

Have a good day ans God bless!
Reply
(22-11-2013, 10:09 AM)8ALEX8 Wrote: Thanks all for your help. Really appreciated that there are kind souls out there willing to help. I've understand the book value and nav. May i know what is RNAV.

For the discounted earnings i can sort of link it back to the stock price but it doesnt seem to make sense to me. I calculate the future earnings and discount it accordimg to inflation and its growth rate but what i get is just EPS. Should i use p/e to deduce the intrinsic value. Would it be accurate as p/e is only for a year?

Have a good day ans God bless!

Always ask Google first.

https://www.google.com.sg/search?q=RNAV&...3&ie=UTF-8
"... but quitting while you're ahead is not the same as quitting." - Quote from the movie American Gangster
Reply
(22-11-2013, 10:09 AM)8ALEX8 Wrote: Thanks all for your help. Really appreciated that there are kind souls out there willing to help. I've understand the book value and nav. May i know what is RNAV.

For the discounted earnings i can sort of link it back to the stock price but it doesnt seem to make sense to me. I calculate the future earnings and discount it accordimg to inflation and its growth rate but what i get is just EPS. Should i use p/e to deduce the intrinsic value. Would it be accurate as p/e is only for a year?

Have a good day ans God bless!

Always ask Google first.

https://www.google.com.sg/search?q=RNAV&...3&ie=UTF-8
"... but quitting while you're ahead is not the same as quitting." - Quote from the movie American Gangster
Reply
(22-11-2013, 10:09 AM)8ALEX8 Wrote: For the discounted earnings i can sort of link it back to the stock price but it doesnt seem to make sense to me. I calculate the future earnings and discount it accordimg to inflation and its growth rate but what i get is just EPS. Should i use p/e to deduce the intrinsic value. Would it be accurate as p/e is only for a year?

You discount cash flows instead of earnings since the latter is an accounting number.

Look at it as an absolute and then as a share price - i.e. discounted sum of cash flow / no of outstanding shares (diluted).

It's a lot better to think as though you own the business. In that way, you will know what's good or bad for the business. For instance, you look as cash flow because that is the tangible profit of the business to be distributed or re-invested. You think in terms of working capital - who you will be screwed? or who you can squeeze. And a lot of other stuffs.

And yes, always ask google first.
"Criticism is the fertilizer of learning." - Sir John Templeton
Reply
(22-11-2013, 10:09 AM)8ALEX8 Wrote: For the discounted earnings i can sort of link it back to the stock price but it doesnt seem to make sense to me. I calculate the future earnings and discount it accordimg to inflation and its growth rate but what i get is just EPS. Should i use p/e to deduce the intrinsic value. Would it be accurate as p/e is only for a year?

You discount cash flows instead of earnings since the latter is an accounting number.

Look at it as an absolute and then as a share price - i.e. discounted sum of cash flow / no of outstanding shares (diluted).

It's a lot better to think as though you own the business. In that way, you will know what's good or bad for the business. For instance, you look as cash flow because that is the tangible profit of the business to be distributed or re-invested. You think in terms of working capital - who you will be screwed? or who you can squeeze. And a lot of other stuffs.

And yes, always ask google first.
"Criticism is the fertilizer of learning." - Sir John Templeton
Reply
Is there any link btw the share price and free cash flow. How are they related in valuation. May i know how are earnings and then cash flow different

P.S i do not have a finance backgrd and am still learning, pls pardon me!

Oh yes i will definitely ask google
Reply
Is there any link btw the share price and free cash flow. How are they related in valuation. May i know how are earnings and then cash flow different

P.S i do not have a finance backgrd and am still learning, pls pardon me!

Oh yes i will definitely ask google
Reply
PEG ratio
http://en.wikipedia.org/wiki/PEG_ratio
You can find more of my postings in http://investideas.net/forum/
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PEG ratio
http://en.wikipedia.org/wiki/PEG_ratio
You can find more of my postings in http://investideas.net/forum/
Reply
may i know that when we specify growth, are we looking at the EPS, the earnings or the revenue? I think that the word 'growth' is too vague, do you mind specifying it to me?

Thanks for your help, appreciate it
Reply
may i know that when we specify growth, are we looking at the EPS, the earnings or the revenue? I think that the word 'growth' is too vague, do you mind specifying it to me?

Thanks for your help, appreciate it
Reply
(22-11-2013, 10:01 PM)8ALEX8 Wrote: may i know that when we specify growth, are we looking at the EPS, the earnings or the revenue? I think that the word 'growth' is too vague, do you mind specifying it to me?

Thanks for your help, appreciate it

Hi hope this helps
http://www.fool.sg/2013/11/21/a-safer-wa...ind-value/

Typically for me when I invest, I am asking how much growth rate (or none if there is) the current market price has baked in. If the current share prices reflect that Mr. market is pricing too much growth, I will not be too interested.
Reply
(22-11-2013, 10:01 PM)8ALEX8 Wrote: may i know that when we specify growth, are we looking at the EPS, the earnings or the revenue? I think that the word 'growth' is too vague, do you mind specifying it to me?

Thanks for your help, appreciate it

Hi hope this helps
http://www.fool.sg/2013/11/21/a-safer-wa...ind-value/

Typically for me when I invest, I am asking how much growth rate (or none if there is) the current market price has baked in. If the current share prices reflect that Mr. market is pricing too much growth, I will not be too interested.
Reply
Thanks CY09 for your help. May i know how doess the free cash flow actually helps in valuating a company?

I've always read books and buffett has always mention that when buying the stock it is the amount of cash flow it can produce throughout it's life? Do you have any idea whether is it free cash flow or other types of cash flow?

Still a amateur investor, thanks for your patience.
Reply
Thanks CY09 for your help. May i know how doess the free cash flow actually helps in valuating a company?

I've always read books and buffett has always mention that when buying the stock it is the amount of cash flow it can produce throughout it's life? Do you have any idea whether is it free cash flow or other types of cash flow?

Still a amateur investor, thanks for your patience.
Reply
(22-11-2013, 10:24 PM)8ALEX8 Wrote: Thanks CY09 for your help. May i know how doess the free cash flow actually helps in valuating a company?

I've always read books and buffett has always mention that when buying the stock it is the amount of cash flow it can produce throughout it's life? Do you have any idea whether is it free cash flow or other types of cash flow?

Still a amateur investor, thanks for your patience.

A company produces cash from its activities, however it has to spend cash regularly to continue these activities in the form of CAPEX. Free cash flow in its basic form is money generated from activity minus this CAPEX amount. So this free cashflow can be used for many items like growing through acquiring new market share, using the money to enter new markets, invent new products etc, share buyback to grow EPS or be given as dividends (singtel & starhub)
Reply
(22-11-2013, 10:24 PM)8ALEX8 Wrote: Thanks CY09 for your help. May i know how doess the free cash flow actually helps in valuating a company?

I've always read books and buffett has always mention that when buying the stock it is the amount of cash flow it can produce throughout it's life? Do you have any idea whether is it free cash flow or other types of cash flow?

Still a amateur investor, thanks for your patience.

A company produces cash from its activities, however it has to spend cash regularly to continue these activities in the form of CAPEX. Free cash flow in its basic form is money generated from activity minus this CAPEX amount. So this free cashflow can be used for many items like growing through acquiring new market share, using the money to enter new markets, invent new products etc, share buyback to grow EPS or be given as dividends (singtel & starhub)
Reply
Thanks for your help! How is the free cash flow used to evaluate the company from that FCF/share perspective?
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Thanks for your help! How is the free cash flow used to evaluate the company from that FCF/share perspective?
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