TIP752: Financial Statements Explained Simply w/ Brian Feroldi
We Study Billionaires - The Investor’s Podcast Network
Balancing Compensation: Stocks vs Cash
This chapter examines stock-based compensation in the tech sector, weighing its pros and cons while favoring cash bonuses for most executives. It also highlights the advantages of investing in the U.S. market, focusing on the robust regulatory environment that enhances investor trust and accountability.
On today's episode, Clay brings back long-time guest, Brian Feroldi, to educate our listeners on how to analyze financial statements.
IN THIS EPISODE YOU’LL LEARN: 00:00 - Intro 01:58 - An overview of the three financial statements. 13:11 - What GAAP accounting is and why the US is a good environment for investors from a regulatory perspective. 18:08 - Why Brian prefers that companies pay employees in cash rather than through stock based compensation. 30:29 - Why each dollar should be treated differently when analyzing different businesses. 37:20 - The role of financial statements in estimating a company’s intrinsic value. 37:20 - Why the P/E ratio is a useless valuation metric for growth businesses. 40:33 - Why Brian prioritizes optionality in his investment process. 43:26 - Red flags to look out for in the financial statements. 58:02 - What David Gardner taught Brian about investing. 01:01:41 - Why good investing is all about marrying the right side of your brain with the left side of your brain.
Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.
BOOKS AND RESOURCES
- Join Clay and a select group of passionate value investors for a retreat in Big Sky, Montana. Learn more here.
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- Related Episode: TIP437: Why does the Stock Market Go Up? w/ Brian Feroldi.
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