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Webcasts Val

 

This 26-session equity valuation class will be starting January 31, 2022, 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 2022 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 2022 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 2022 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 2022 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 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 (1/31/22)

  1. Recorded Session
  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, 1-3
Introduction to Class
Post-class test and solution.
Valuation of the week #1

Tesla: Is the Corporate Teenager growing up?

  1. My post on Tesla in November 2021
  2. My Do-It-Yourself (DIY) Valuation of Tesla in November 2021
  3. Tesla Financials (including earnngs report from January 2022, updating numbers through Dec 31, 2021)
Google shared spreadsheet

2 (2/2/22)

  1. Recorded Session
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube


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

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 (2/7/22)

  1. Recorded Session
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube


Cash flow consistency: A test (Congoleum)

Lecture Note Packet 1: Pages 1-25

Valuation Approaches
DCF Big picture
Cash flow constistency
Riskfree Rates
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 in 2019
  4. Updated financials for Aramco (through 2022)
Google Shared Spreadsheet

4 (2/9/22)

  1. Recorded Session
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube

 

Risk free Rates: A test
  1. Lecture note packet 1: Pages 26-53
  2. Sovereign Ratings - January 2022
  3. Sovereign CDS Spreads - January 2022

Risk: What matters and what does not....
The Risk free Rate
- The inflation effect
- Estimation and Usage
- Issues (Low and negative interest rates...)
The Equity Risk Premium
- Historical Risk Premiums

Post-class test and solution.
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)

5 (2/14/22)

  1. Recorded Session
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube

 

Country and Currency Risk Lecture note packet 1: Pages 53-81

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

Post class test and solution
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
No Google spreadsheet

6 (2/16/22)

  1. Recorded Session
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube


Betas and Relative Risk: A test Lecture note packet 1: 82-103
First steps on betas
Measuring Relative Risk (Betas & Alternatives)
The cost of debt
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
Company Equity Risk Premium
Estimate a company's equity risk premium
  1. Webcast
  2. Presentation
  3. ERP & GDP spreadsheet
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
Valuation of the week # 4

An Intrinsic Valuation of the Market

  1. My blog post on valuing the S&P 500 from January 1, 2022
  2. My valuation of the S&P 500 on Jan 1, 2022
Google Shared Spreadsheet
7 (2/23/22)
  1. Recorded Session
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube

Cost of Debt: A Test

Lecture note packet 1: 104-130

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

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
  1. Apple: 10K
  2. Apple: 10Q
  3. Apple Trailing 12-month (spreadsheet)

8 (2/28/22)

  1. Recorded Session
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube


Cash Flows: A test Lecture note packet 1: 131-162

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

9 (3/2/22) (Quiz in first 35 minutes, shorter session)

  1. Recorded Session
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube
Quiz 1 (Quiz and solutions) Lecture note packet 1: 163-185
Growth rates
- Historical growth rates
- Analyst estimates of growth
- Fundamental Growth
No post class test
Weekly Challenge # 4

Estimating fundamental growth

Weekly challenge
Solution
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)

10 (3/7/22)

  1. Recorded Session
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube
Start of the class test Lecture note packet 1: 186-215

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

Airbnb: A Hospitality Disruptor?

  1. My post on Airbnb at the time of their IPO
  2. Airbnb Prospectus (December 2, 2020)
  3. Airbnb Updated Financials (through March 2022)
  4. My updated valuation of Airbnb (March 2022)
Google shared spreadsheet

11 (3/9/22)

  1. Recorded Session
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube
Start of the class test Lecture note packet 1: 216-240

Customizing DCF Models
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 #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
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

12 (3/21/22)

  1. Recorded Session
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube
Start of the class test Lecture note packet 1: 240-267

Loose Ends in Valuation
- Dealing with Complexity
- Defining Debt
- Stock Based Compensation
Narrative and Numbers

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

13 (3/23/22)

  1. Recorded Session
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube
Start of the class test Lecture note packet 1: 268-285

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

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

14 (3/28/22)

  1. Recorded Session
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube
Start of the class test Lecture note packet 1: 286-306

Valuing in a crisis
Valuing the market
The Dark Side of Valuation
- Valuing Young companies

Post class test and solution

15 (3/30/22)

  1. Recorded Session
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube
Start of the class test Lecture note packet 1: 307-330

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

16 (4/4/22)

  1. Recorded Session
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube
Quiz 2 (Quiz and solutions) Lecture note packet 1: 331-353

Valuing financial service companies
Closing up intrinsic value

Post class test and solution

17 (4/6/22)

  1. Recorded Session
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube
Start of the class test

Lecture note packet 1: 354-End, Lecture note packet 2: 1-17

Valuing commodity companies
Deconstructing a multiple
Consistency & Uniformity Tests
Moneyball with pricing
Analytical Tests

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, I look at the differences between the three and why you may use one over the other. Blog post on topic
Presentation
Excel spreadsheet

18 (4/11/22)

  1. Recorded Session
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube
Start of the class test

Lecture note packet 2: 18-55

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

Post class test and solution
Pricing/Valuation of the week #8

Pricing Severstal (a Russian steel company)

  1. Severstal's financials
  2. Steel Companies - Data
  3. Steel Company Multiples - Data Analysis
  4. Pricing Severstal
No Google shared spreadsheet

19 (4/13/22)

  1. Recorded Session
  2. Video podcast (downloadable
  3. Audio podcast (downloadable)
  4. YouTube
Start of the class test

Lecture note packet 2: 56-102

Pricing young companies
Forward Multiples
Market Pricing

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

20 (4/18/22)

  1. Recorded Session
  2. Video podcast (downloadable
  3. Audio podcast (downloadable)
  4. YouTube
Start of the class test

Lecture note packet 2: 103-145

Asset Based Valuation
Valuing Private Companies: Private to Private
- Motive
- Dealing with undiversified buyers


Post class test and solution
Review session for Quiz 3
Webcast
Review session for the third quiz
  1. Webcast
  2. Review presentation
  3. Past Quiz 3s
  4. Solution to Past Quiz 3s

21 (4/20/22)

  1. Recorded Session
  2. Video podcast (downloadable
  3. Audio podcast (downloadable)
  4. YouTube
Start of the class test

Lecture note packet 2: 146-End, Lecture Note Packet 3: 1-13

Valuing Private Companies: Private to Public
Valuing Private Companies: Private to IPO
Valuing Private Companies: VC to IPO
Real Options
- Basis for Premium
- The three big questions

Post class test and solution
Weekly Challenge #7a
Relative valuation Weekly challenge
Solution
Weekly Challenge # 8 Relative Valuation versus DCF valuation Weekly challenge
Solution

22 (4/25/22)

  1. Recorded Session
  2. Video podcast (downloadable
  3. Audio podcast (downloadable)
  4. YouTube
Quiz 3 and solution

Lecture Note Packet 3: 14-36

Option Pricing Models
Option Pricing Models vs Decision Trees
Options in Investment Analysis
Option to Delay
- Valuing patents
- Valuing undeveloped natural resource reserves

Post class test and solution

23 (4/27/22)

  1. Recorded Session
  2. Video podcast (downloadable
  3. Audio podcast (downloadable)
  4. YouTube
Start of the class test

Lecture Note Packet 3: 37-83

Valuing undeveloped natural resource reserves
Valuing flexibility as an option
Valuing distressed equity as an option
Closing thoughts on option pricing

Post class test and solution
Weekly Challenge #9
Patent valuation Weekly Challenge
Solution
Valuation Tools Webcast #13: Valuing Patents as Options
The exclusive rights to produce a product or provide a service can provide the owner with "optionality", allowing for a premium on top of a discounted cash flow value. In this webcast, I look at a simplified example.
  1. Presentation
  2. Spreadsheet
Valuation Tools Webcast #14: Valuing Distressed Equity as an Option
With money-losing companies, with a lot of debt, equity takes on the characteristics of a call option (to liquidate the business). In this webcast, I look at the mechanics of applying this approach to a troubled company.
  1. Jet India Financials
  2. Jet DCF valuation
  3. Jet Option valuation

24 (5/2/22)

  1. Recorded Session
  2. Video podcast (downloadable
  3. Audio podcast (downloadable)
  4. YouTube
Through the class test

Lecture Note Packet 3: 84-118

The Seven Deadly Sins in Acquistion Valuation
Pathways to success with acquisitions

Post class test and solution

25 (5/4/22)

  1. Recorded Session
  2. Video podcast (downloadable
  3. Audio podcast (downloadable)
  4. YouTube
Start of class test

Lecture Note Packet 3: 119-153

Value Enhancement
- Value versus Price Enhancement
- Pathways to increasing Value
- The value of control

Post class test and solution
Review session for Final
Webcast

Review session for the final exam

  1. Review presentation
  2. Past finals
  3. Solution to past finals
26 (5/9/22)
  1. Recorded Session
  2. Video podcast (downloadable
  3. Audio podcast (downloadable)
  4. YouTube

Project summaries (for entire class)

Closing presentation

Closing Presentation
- Dante meets DCF (Ten tests of valuation)
- Project findings
- Closing thoughts

Final Exam Take the final exam and check the solution Check your grade on the class