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This 28-session equity valuation class will be recorded starting January 22, 2025, 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
Webcasts
This page will include the webcasts from the current class. The webcasts
can be accessed in one of four ways:
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 |
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Valuation: Priors and Preconceptions (Self test - take it when you get a chance) |
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| Class Structure and Logistics | ||
| Post-class test and solution. | ||
| 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. (This webcast is almost ten years old, but annual reports and 10Ks have become even denser and longer since, making the exercise of separating what matters fro,m what does not even tricker.) | ||
| Valuation bias: A test and my solutions | ||
Valuation Project/Grading Criteria |
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| Post-class test and solution. | ||
Valuation of the week #1 |
Bubble or Bust: Valuing the S&P 500 Index! |
Google shared spreadsheet |
| Cash flow consistency: A test (Congoleum) | ||
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| Post-class test and solution. | ||
Weekly Challenge #1 |
Reconciling firm and equity valuation |
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| The first step in analysis is collecting data on your company, as well as macro data and this webcast covers the basics. | ||
| Risk free Rates: A test | ||
DCF inputs: The Discount Rate The Risk free Rate |
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| Post-class test and solution | ||
Valuation of the week #2 |
Valuing AI: Nvidia, DeepSeek and the Rest of the Story |
Google shared spreadsheet |
| Equity Risk Premiums | ||
Riskfree Rates - Low and Lower Equity Risk Premiums |
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| Post class test and solution | ||
| Weekly Challenge #2 | Country risk and risk premiums | Weekly challenge # 2 Solution |
Valuation Tools Webcast #2a Estimating a risk free rate |
Estimating a risk free rate |
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| Implied Equity Risk Premium | ||
Implied Equity Risk Premiums First steps on relative risk |
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| Post class test and solution | ||
Valuation of the week # 3 |
Aramco: A loaded bet on Oil and the House of Saud |
Google Shared Spreadsheet |
| Betas: A test | Lecture note packet 1: Pages 79-101 | |
| First steps on betas Measuring Relative Risk (Betas & Alternatives) The cost of debt Cost of Capital |
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| 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 |
| Estimate a company's equity risk premium | ||
Valuation Tools Webcast #5 |
Estimating a bottom up beta | |
| Review session for the first quiz | ||
Valuation of the week # 4 |
The Starbucks Story: Online Orders and a Cafe Story! |
Google Shared Spreadsheet |
| Cashflows: A Test | ||
Debt in Cost of Capital |
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| Post class test and solution | ||
| Cash Flows II: A test | Lecture note packet 1: 127-149 | |
Capitalizing R&D |
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| Post class test and solution | ||
| 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 | |
| Valuation Tools Webcast #6 Converting leases to debt |
The process of converting operating lease commitments to debt | |
| Valuation Tools Webcast #7 Capitalizing R&D expenses |
The process of converting R&D (and like expenses) from operating to capital expenses | |
| Growth Rates: A test | Lecture note packet 1: 150-183 | |
| Mopping up on FCFE Growth rates - Historical growth rates - Analyst estimates of growth - Fundamental Growth |
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| Post class test and solution | ||
Valuation of the week #6 |
A Jedi Valuation of Star Wars (Old, and you are welcome to update, now that the series has played out, though it has found new life as a streaming franchise) |
No Google shared spreadsheet: Just have fun with it! |
| Growth Rates II: A test | Lecture note packet 1: 184-204 | |
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| 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. | |
12 (3/3/25) |
Quiz 1, solution and grade distribution | Lecture note packet 1: 205-218 |
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| Post class test and solution | ||
Valuation of the week #7 |
Valuing a Sports Franchise (from 2014)
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13 (3/5/25)
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Start of the class test (just first 3 pages) | Lecture note packet 1: 219-237 |
Customizing DCF Models |
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| Post class test and solution | ||
Weekly Challenge #4a |
Terminal Value | Weekly challenge Solution |
| 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 |
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