Newbie in the finance World.. I appreciate any input/tip/help

Hey everyone…

I’ve taken some finance courses in university and have passed CFA L1 and awaiting the results of L2…

That being said,

Im not sure how to analyze industries/sectors… What are the main(or specific) characteristics of each? I’ bought some books but provided little help. Online research didnt that much good. My whole life was literally me being dejected from the real world and Im trying to change that for good. I found the CFA material/exams to be fair and I’ve got a really good grasp of it but I still feel lost when I read news, articles etc. Like I cant even form my own opinion. I think this is normal for a beginner. Any tips on how to start?

I cant even start my own portfolio for the reason mentioned above; Aside from what I’ve learned in the CFA, Im not sure how to take my analytical thinking beyond what I know already…

I really appreciate anything of help.

Thanks in advance…

Maybe just start with a small simple company producing widgets.

this is free and great. there prolly hundreds of hours of viewing material here. so enjoy. you dont need classes unless you want certification.

Watch this:

https://www.youtube.com/watch?v=KfDB9e_cO4k&list=PLECECA66C0CE68B1E

Then this

https://www.youtube.com/watch?v=znmQ7oMiQrM&list=PLUkh9m2BorqnKWu0g5ZUps_CbQ-JGtbI9

^you use wacc and CAPM i bet LOL

Just go passive.

neither. i dcf. what do you use?

Start reading a lot. The more you read about various industries the more you will begin to see what makes certain markets “tic”, I am by no means an expert and there are plenty of guys here with sector coverage with deep knowledge of various areas, but through reading various articles about various industries you sort of learn what metrics are looked to what the markets are expecting from different companies.

Still useless unless you get a firm to hire you. None of that stuff is as important as getting 4.0 GPA and a hard major.

yea one of the tools in my toolbox

this.

Thanks ! :slight_smile:

Thanks :slight_smile:

you don’t use WACC or CAPM when doing DCF?? Which discount rate do you use to PV all future FCF?

risk free rate plus some arbitrary risk premium i decide on depending on the stability of the business.

i think beta is retarded. the volatility of price is not a good measure of risk. in fact, i would argue volatility is opportunity, since it has a higher chance of price getting cheaper/expensive.

you use a specific formula or company wide premium to come up with a “arbitrary risk premium?”

I agree with you that beta is a joke…I think the whole research is a joke to be honest. So much art and not so much science. I use comparables to come up with risk premium.

its arbitrary cuz its not a formula (others can easily disagree), not sure what you mean, but i discount the whole company as a whole (i dont believe in sotp).

how do you come with comparables for risk premium? do you use reverse dcf?

i use average of unleveled beta from comparable companies… Use this unleveled avg beta to calculate the levered beta of the company i am looking at. this beta is used to cacluate the dis rate.

Google Damadoran, watch YouTube videos, access his webiste, and learn everything.