Understanding the Significance of Earnings Yield in Value Investing

3min Snip

00:00

Play full episode

Summary

Transcript

Episode notes

This chapter explores the importance of earnings yield in value investing, explaining how it is calculated and its representation of potential dividend yield. The chapter also highlights the expanding coupons of stocks as dynamic businesses grow, with a recommended 5% earnings yield as a good benchmark for value investors.

Kyle Grieve chats with Adam Seessel about the importance of R&D spend to a business's competitive advantage, why value investors should embrace tech as a massive creator of value, how following Benjamin Graham to the letter is causing some investors to hold onto outdated ways of thinking, why studying network effects is so important in the digital age, the importance of buying quality businesses over cheap businesses, using Adam’s BMP method on one of his newest acquisition Texas Instruments, and a whole lot more!

IN THIS EPISODE, YOU’LL LEARN:

00:00 - Intro

03:54 - Why we should prioritize quality businesses over cheap ones.

02:51 - The basics of the BMP method.

10:38 - The importance of R&D spend for competitive advantage.

29:44 - Why value investors should embrace tech for value creation.

31:43 - Questioning the strict adherence to Benjamin Graham's principles.

42:46 - The significance of studying network effects in the digital age.

46:50 - Applying the BMP method to Texas Instruments.

And much, much more!

*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.

BOOKS AND RESOURCES

Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Kyle and the other community members.
Read Adam’s book Where The Money Is.

NEW TO THE SHOW?

Check out our Millennial Investing Starter Packs.
Browse through all our episodes (complete with transcripts) here.
Try Kyle’s favorite tool for picking stock winners and managing our portfolios: TIP Finance.
Enjoy exclusive perks from our favorite Apps and Services.
Stay up-to-date on financial markets and investing strategies through our daily newsletter, We Study Markets.
Learn how to better start, manage, and grow your business with the best business podcasts.