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Webcasts Val

 

This 26-session equity valuation class will be starting February 3, 2020, and the lectures are accessible in multiple ways. 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 2020 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 2020 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 2020 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 2020 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).
    The prior semester's webcasts can be found here.

Options for following class

You can follow this class in other forums. One is iTunes U, where you can watch the webcasts and follow the class on your tablet or even smartphone. The other is YouTube.

  1. Apple iTunes U: If you would like to watch the sessions on Apple iTunes U on your Apple device, try this link.
  2. 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 (2/3/20)

  1. Webcast, streamed (need a good internet connection)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube


Valuation: Priors and Preconceptions

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

Tesla: A Corporate Teenager

  1. My June 2019 Post on Tesla
  2. My January 2020 Post on Tesla
  3. My January 2020 Valuation of Tesla
Google Shared Spreadsheet

2 (2/5/20)

  1. Webcast, streamed (need a good internet connection)
  2. Video podcast (downloadable) (accessible at about 3.30 pm, 2/5/20)
  3. Audio podcast (downloadable)
  4. YouTube


Valuation bias: A test and my solutions
  1. Introduction to Valuation: 1-17

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 (2/10/20)

  1. Webcast, streamed (need a good internet connection)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube
Cash flow consistency: A test (Congoleum)
  1. Introduction to Valuation - 17 to end
  2. Lecture note packet 1: Pages 1-29
DCF Big picture
DCF inputs: The Discount Rate
- Setting the table
- Risk and the marginal investor
Post-class test and solution.
Valuation of the week # 2

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
Google Shared Spreadsheet

4 (2/12/20)

  1. Webcast, streamed (need a good internet connection)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube

 

Risk Premiums: A test
  1. Lecture note packet 1: Pages 30-54
  2. Sovereign Ratings - January 2020
  3. Sovereign CDS Spreads - January 2020
  4. Equity Risk Premiums by Country - January 2020

The Risk free Rate
- The inflation effect
- Estimation

The Equity Risk Premium
- Historical Risk Premiums
- Country equity risk premiums

Post-class test and solution.
Weekly Challenge #1

Reconciling firm and equity valuation

  1. Weekly challenge #1
  2. Solution
Valuation Tools Webcast #3
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 Tools Webcast #4
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 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 (2/19/20)

  1. Webcast, streamed (need a good internet connection)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube

 

Country and Currency Risk Lecture note packet 1: 55-78

Country Risk and Company Risk Exposures
Implied Equity Risk Premiums
- More on estimation
- Interaction with other "risk" premiums

Post class test and solution
Weekly Challenge # 2a

Implied Premium versus Riskfree Rate

Implied premium challenge, data and solution
Valuation Tools Webcast #5
Estimate a company's equity risk premium
  1. Webcast
  2. Presentation
  3. ERP & GDP spreadsheet

6 (2/24/20)

  1. Webcast, streamed (need a good internet connection)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube


Beta and WACC: A test Lecture note packet 1: 79-106
First steps on betas
Measuring Relative Risk (Betas & Alternatives)
The cost of debt
Post class test and solution
Valuation of the week # 5

A Market Crisis: The Corona Effect on the Market

  1. My write up on the Corona Virus effect on the S&P 500
  2. My valuation of the S&P 500
Google Shared Spreadsheet
7 (2/26/20)
  1. Webcast, streamed (need a good internet connection)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube

Cash flows: A test

Lecture Notes 1: 107-130

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)

8 (3/2/20)

  1. Webcast, streamed (need a good internet connection)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube


Cash Flows II: A test Packet 1: Page 131-164

Accounting Fraud & Negative Earnings
Tax Rates
Reinvestment
From FCFF to FCFE
Leverage and FCFE
Growth rates
- Historical growth rates
- Analyst estimates of growth

Post class test and solution
Valuation of the week #5
  1. My blog posts on ride sharing
    1. On the Uber Rollercoaster
    2. The Future of Ride sharing
  2. Uber - Prospectus (2019)
  3. My Uber IPO post
  4. IPO lessons for Public Market Investors (with Uber valuation from October 11, 2019)
  5. My Uber valuation in October 2019
Google Shared Spreadsheet

9 (3/4/20) (Quiz in first 30 minutes of class)

  1. Webcast, streamed (need a good internet connection)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube
Take the first quiz (a or b) and check out the solution (a or b) as well as the distribution of grades for the class.  (Up after quizzes are ready to be picked up) Packet 1: Pages 165-183
Fundamental Growth Rates
Top Down Estimates
The Value of 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

10 (3/9/20)

  1. Webcast, streamed (need a good internet connection)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube
Start of the class test Packet 1: Pages 184-215

Fundamental growth rates
- Efficiency growth
- Growth when margins are changing
Terminal Value: Constraining Rules
Post class test and solution
Valuation of the week #6
  1. Background on online meeting market
  2. Zoom Prospectus (2019)
  3. Zoom Updated Financials
  4. My Zoom Valuation
Google Shared Spreadsheet

11 (3/11/20)

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

Loose Ends in Valuation
- Valuing Cash
- Valuing Cross Holdings
- Valuing Other Assets
- Dealing with Complexity
- Defining Debt
- Stock Based Compensation

Packet 1: Pages 215-245
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
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

12(3/23/20)

  1. Zoom recording (I am sorry. It did not record, and it was my mistake. See YouTube version below.)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube


Story Telling and Number Crunching Packet 1: 246-264

Dealing with Employee Options & Restricted Stock
Narrative and Numbers
- Story and Value
- Changing Stories

Post class test and solution
Valuation of the week #6
  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

13 (3/25/20)

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


Story Telling and Number Crunching Packet 1: 265-287
Story breaks, shifts and changes
Valuation 101
- Valuing the Market
- Baby steps
- Crisis Effects
Post class test and solution
Weekly Challenge #5
Management Options and Equity Value

Weekly challenge
Solution & Option value

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

14 (3/30/20)

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



Second quiz

Packet 1: 288-302

Valuing Declining & Distressed Companies
Valuing Emerging Market Companies

Post class test and solution
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 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
 
15 (4/1/20)
  1. Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube
Price and Value: A Test Packet 1: 302-327

Valung Emerging Market Companies
Valuing Financial Service Companies
Valuing Commodity Companies
Value versus Price

Post class test and solution

Valuation Tools Webcast #11: EV, Firm Value and Equity Value

The "value" embedded in a multiple can be the value of the entire firm, the value of its operating assets (enterprise value) or the value of the equity. In this webcast, we look at the differences between the three and why you may use one over the other. Blog post on topic
Presentation
Excel spreadsheet