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webcasts UG valuations

 


This 28-session equity valuation class will be recorded starting January 25, 2021, and the sessions will be online, though recordings will be acceible on multiple platforms. You can get the supporting lecture notes by clicking on the pdf files below - the pages covered by each lecture are provided next to each lecture. For the syllabus and other details, visit the home page .

Lecture Notes

  1. Introduction to Valuation (Updated for Spring 2021 class).
  2. Part I: Discounted Cashflow Valuation: This is a pdf file and works well if you have an iPad or tablet to read it on If you have trouble printing this file, download the powerpoint file. You can then choose to print the slides, one to a page, two or a page, in note format or whatever your heart desires. (Updated for Spring 2021 class)
  3. Part II: Relative Valuation and Private Company Valuation : This is a pdf file and works well if you have an iPad or tablet to read it on If you have trouble printing this file, download the powerpoint file. You can then choose to print the slides, one to a page, two or a page, in note format or whatever your heart desires. (Updated for Spring 2021 class)
  4. Part III: Real Options, Acqusition Valuation and Value Enhancement: This is a pdf file and works well if you have an iPad or tablet to read it on If you have trouble printing this file, download the powerpoint file.You can then choose to print the slides, one to a page, two or a page, in note format or whatever your heart desires. (Updated for Spring 2021 class).

  5. Part IV: Closing Presentation

Webcasts
This page will include the webcasts from the current class. The webcasts can be accessed in one of four ways:

  1. Streaming video (The file will be streamed to your computer. This will work only if you have a good internet connection, but should be of the best quality and the most information)
  2. Video podcast (The file will be downloaded to your computer and you can watch the video using Quicktime or video software or on your iPod)
  3. Audio podcast (The .mp3 file will be downloaded as an audio file and can be played on any audio player). The AV system used to record the lectures has changed and I think it is much improved.
  4. YouTube videos (if you have slower internet connection and/or a small device).

Options for following class

You can follow this class on YouTube. I have created a playlist for the class, where the sessions will be posted sequentially with links to slides and other material.

Finally, you can read the emails that I send to the class by this link.

Session Webcasts Topics covered Lecture notes
Preview of the class
What is this class about?
 

1 (2/1/21)

  1. Recorded Zoom session (accessible only those in the class) (Ignore first 4 minutes of dead time)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube


Valuation: Priors and Preconceptions

  1. Syllabus for class
  2. Project Description
  3. Introduction to Valuation, 1-2
Introduction to Class
Post-class test and solution.
Valuation of the week #1

GameStop: The Storming of the Bastille!

  1. My post on GameStop
  2. My valuation of GameStop
  3. GameStop Financials
Google shared spreadsheet

2 (2/3/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube


Valuation bias: A test and my solutions
  1. Introduction to Valuation, 3 - 11

The Bermuda Triangle of Valuation
Intrinsic Valuation: The Big Picture
Relative Valuation: The Big Picture
Real Options

Post-class test and solution.
Valuation Tools Webcast #1
Downloadable webcast
YouTube
Much of the raw material (data) that we use for valuation comes from annual reports and financial filings. (10, 10Q). In this presentation, I lay out a template for extracting information from these filings, separating the stuff that matters from the stuff that does not, using P&G in September 2012 as an illustration.
  1. Presentation
  2. P&G: 10K
  3. P&G: Valuation (Excel spreadsheet)

3 (2/8/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube
Cash flow consistency: A test (Congoleum)
  1. Introduction to Valuation, 12 - End
  2. Lecture note packet 1: Pages 1-8
Valuation Approaches
DCF Big picture

Post-class test and solution (riskfree questions from session 4, but you can do them...)
Valuation of the week #2

Airbnb: A Hospitality Disruptor?

  1. My post on Airbnb at the time of their IPO
  2. Airbnb Prospectus (December 2)
  3. My updated valuation of Airbnb
Google shared spreadsheet

4 (2/10/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube

 

Risk free Rates: A test
  1. Lecture note packet 1: Pages 9-42
  2. Sovereign Ratings - January 2021
  3. Sovereign CDS Spreads - January 2021

DCF inputs: The Discount Rate
- Setting the table
- Risk and the marginal investor

The Risk free Rate
- The inflation effect
- Estimation

Post-class test and solution (repeat of session 3, but should make sense now...)
Weekly Challenge #1

Reconciling firm and equity valuation

  1. Weekly challenge #1
  2. Solution
Valuation Tools Webcast #2
Estimating a risk free rate

Estimating a risk free rate

Estimating a risk free rate should be simple but it is often not. In some currencies, where there are no default free entities, it may take some work getting to a risk free rate. In this webcast, I look at the mechanics of this adjustment.

  1. Presentation
  2. Moody's ratings (3/13)
  3. CDS spreads (3/13)
Valuation of the week # 3

Heineken: Negative Interest Rates & Value

  1. My blog post on negative interest rates
  2. Heineken: The financials
  3. Heineken: The story
  4. Heineken: The valuation
Google Shared Spreadsheet

5 (2/17/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube

 

Country and Currency Risk
  1. Lecture note packet 1: Pages 43-64
  2. Equity Risk Premiums by Country - January 2021

Riskfree Rates - Low and Lower

Equity Risk Premiums
- Historical Equity Risk Premium
- Country Risk Premium
Company Equity Risk Premium

Post class test and solution

6 (2/18/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube

 

Implied Equity Risk Premium
  1. Lecture note packet 1: Pages 65-80

Implied Equity Risk Premiums
- Intuition
- Changes over time
- Connection to Market Views
- Relationship to other risk premia

Post class test and solution
Weekly Challenge # 2a

Implied Premium versus Riskfree Rate

Implied premium challenge, data and solution
Valuation Tools Webcast #3
Implied Equity Risk Premiums
The logic and the measurement questions behind equity risk premiums are examined in this webcast. Presentation
Spreadsheet
S&P 500 on buybacks
S&P 500 earnings
Valuation Tools Webcast #4
Estimate a company's equity risk premium
  1. Webcast
  2. Presentation
  3. ERP & GDP spreadsheet

7 (2/22/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube


Betas and Relative Risk: A test Lecture note packet 1: 81-100
First steps on betas
Measuring Relative Risk (Betas & Alternatives)
The cost of debt
Post class test and solution
Valuation of the week # 4

An Intrinsic Valuation of the Market

  1. My blog post on valuing the S&P 500
  2. My valuation of the S&P 500 on Jan 1, 2021
Google Shared Spreadsheet
8 (2/24/21)
  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube

Cash flows: A test

Lecture note packet 1: 101-129

Debt in Cost of Capital
Earnings and cash flows
- Updating earnings
- Cleaning up earnings

Post class test and solution
Review session for Quiz 1
Webcast
Review session for the first quiz
  1. Review presentation
  2. Past Quiz 1s
  3. Solution to Past Quiz 1s
Weekly Challenge # 3

Adjusting Operating Earnings

Weekly challenge #3
Solution & Synthetic rating
Valuation Tools Webcast #5a
Trailing 12 month earnings
How to use financial statements to create trailing 12 month numbers
  1. Apple: 10K
  2. Apple: 10Q
  3. Apple Trailing 12-month (spreadsheet)
Valuation Tools Webcast #6
Converting leases to debt
The process of converting operating lease commitments to debt
  1. Disney Annual Report
  2. Converting leases to debt (spreadsheet)
Valuation Tools Webcast #7
Capitalizing R&D expenses
The process of converting R&D (and like expenses) from operating to capital expenses
  1. Microsoft: 10K for 2012
  2. Microsoft: 10K for 2011
  3. Converting R&D to capital (spreadsheet)

9 (3/1/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube


Cash Flows II: A test Lecture note packet 1: 131-157

Capitalizing R&D
Extraordinary & one-time losses
Accounting Fraud & Negative Earnings
Tax Rates
Reinvestment
From FCFF to FCFE
Leverage and FCFE

Post class test and solution
Valuation of the week #5

A Jedi Valuation of Star Wars (Old and you are welcome to update, now that the series has played out)

  1. A Post on the value of the Star Wars Franchise (December 2015)
  2. Star Wars Franchise Valuation spreadsheet
  3. Star Wars, The Force Awakens - Actual Box Office
  4. Rogue One - Actual Box office
  5. Star Wars, The Last Jedi - Actual Box Office
  6. Solo - Actual Box Office
Google shared spreadsheet

10 (3/3/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube
No start of the class test. Quiz 1 Lecture note packet 1: 158-183
Growth rates
- Historical growth rates
- Analyst estimates of growth
- Fundamental Growth
Post class test and solution
Weekly Challenge # 4

Estimating fundamental growth

Weekly challenge
Solution
Valuation Tools Webcast #8
Estimating accounting returns (ROE, ROIC)
In assessing whether a company's existing investments are good or not, we draw on accounting return measures: return on invested capital and return on equity. However, navigating what should be in invested capital and what should not, and how to adjust for accounting inconsistencies is tricky.
  1. Walmart 10K (2013)
  2. Walmart 10K (2012)
  3. Spreadsheet

11 (3/8/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube
Start of the class test Lecture note packet 1: 184-217

Fundamental growth rates
- Efficiency growth
- Growth when margins are changing
Terminal Value: Constraining Rules
Post class test and solution
Valuation of the week # 6

Aramco: A loaded bet on Oil and the House of Saud

  1. Aramco's Prospectus
  2. My blog posts on Aramco
    1. A coming out party for the world's largest company
    2. Regime Change and Value
  3. My valuation of Aramco (in 2019)
 

12 (3/10/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube
Start of the class test Lecture note packet 1: 218-235

Loose Ends in Valuation
- Valuing Cash
- Valuing Cross Holdings
- Valuing Other Assets

Post class test and solution
Weekly Challenge #4a
Terminal Value Weekly challenge
Solution
Valuation Tools Webcast #9 (Checking Terminal Value)
The terminal value is a "big" number in DCF valuation, but it is subject to misuse and manipuluation. In this session, I take a look at how you can detect problems with a terminal value computation (in both your own DCFs and in other people's DCFs) Sample DCF valuation
Terminal value analyzer

13 (3/15/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube
Start of the class test Lecture note packet 1: 236-266

Loose Ends in Valuation
- Debt
- Stock based compensation
Stories and Numbers
- Importance
- Steps

Post class test and solution
Valuation of the week #7
  1. easyJet: My Story and Valuation(s)
  2. easyJet Valuations
    1. No-deal Brexit
    2. Delayed/Messy Brexit
    3. Smooth/No Brexit
Google Shared Spreadsheet

14 (3/17/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube
Start of the class test Lecture note packet 1: 267-283

Stories and Numbers
- Tie to Valuation Inputs
- Feedback Loop
- Story breaks, changes and shifts
Valuation - Training Wheels

Post class test and solution
Weekly Challenge #5
Management Options and Equity Value

Weekly challenge
Solution & Option value

Review session for Quiz 2
Webcast
Review session for the second quiz
  1. Review presentation
  2. Past Quiz 2s
  3. Solution to Past Quiz 2s
Valuation Tools Webcast #10: Dealing with Employee Options
When companies compensate employees with options, they create a second claim on equity. When valuing common shares in these companies, you have to incorporate the effect of options outstanding on equity value and I try to look at how in this webcast. Cisco 10K
Option spreadsheet

15 (3/22/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube
Start of the class test Lecture note packet 1: 284-299

Stories and Numbers
- Tie to Valuation Inputs
- Feedback Loop
- Story breaks, changes and shifts
Valuation - Training Wheels

Post class test and solution
Valuation of the week #8

Valuing a Sports Franchise (from 2014)

  1. Ballmer buys Clippers: News story
  2. My blog post on the Clippers
  3. My spreadsheet for valuing the Clippers
  4. Pricing of sports franchises (NFL, NBA, MLB & NHL)
  5. Soccer and IPL cricket Team numbers
 

16 (3/24/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube
Quiz 2 (no start of the class test) Lecture note packet 1: 300-312
Valuing young companies
- Revenue growth and margins
- Reinvestment
- Risk of failure
- Look backs
No post class test and solution
Valuation Tools Webcast: Spreadsheet Gymnastics - Using the Ginzu spreadsheet (Corona Virus version)
In this session, I use the spreadsheet that I built to value a company, adapted fro the earnings shock that is coming from the crisis and higher risk premiums to value Boeing. In the process, you may be able to get ideas on how to build your own or adapt this one to make it better. Spreadsheet

17 (3/29/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube
Start of the class test Lecture note packet 1: 313-340

The Dark Side of Valuation
- Valuing Mature Companies in Transition
- Valuing Declining and Distressed Companies
- Valuing Emerging Market Companies

Post class test and solution
Valuation of the week #9
  1. My blog post on the Uber IPO valution
  2. My IPO valuations of Uber
    - Top down
    - Rider-based
  3. My post on Uber in September 2019
 

18 (3/31/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube
Start of the class test
  1. Lecture note packet 1: 341-End & Lecture note packet 2: 1-

Valuing financial service companies
Valuing commodity companies
Closing up intrinsic value
First steps on pricing

Post class test and solution

19 (4/5/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube
Start of the class test

Lecture note packet 2: 6-34

Deconstructing a multiple
Consistency & Uniformity Tests
Moneyball with pricing
Analytical Tests

Post class test and solution
Valuation of the week #10
  1. Blog post on Kraft Heinz, post earnings report
  2. Kraft Heinz Earnings for 2018
  3. My valuation of Kraft Heinz in February 2019
 

20 (4/7/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube
Start of the class test

Lecture note packet 2: 35-74

PEG, PBV and EV Multiples
The Value of a Brand Name
Pricing examples

Post class test and solution
Weekly Challenge #6
Multiple: Definitional test Weekly Challenge
Solution

Valuation Tools Webcast #12: Multiples and Fundamentals - Analyzing relationships

When asked the value a company, relative to other companies, one of the biggest challenges you face is in assessing and analyzing the data. In this presentation, I looks at steps in analysis.
  1. Presentation
  2. Bank raw data
  3. Descriptive Statistics

21 (4/7/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube
Start of the class test

Lecture note packet 2: 75-122

Pricing young companies
Forward Multiples
Market Pricing
Asset-based Valuation/Pricing

Post class test and solution