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TIP319: Intrinsic Value Assessment of Charles Schwab w/ Arif Karim (Business Podcast)
Oct 18, 2020
Arif Karim, a senior investment analyst at Ensemble Capital Management and MIT graduate, dives into the intrinsic value of Charles Schwab. He discusses the brokerage's transformation and its innovative approach to wealth management. Karim highlights critical metrics in asset management, like AUM growth and NIM, while examining Schwab's unique competitive advantages against rivals like Robinhood. The conversation also touches on the impact of inflation on valuation, emphasizing the importance of understanding financial services for successful investing.
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Quick takeaways
- Charles Schwab focused on democratizing trading with low-cost investing services.
- Schwab's revenue model shifted from trading commissions to wealth management and net interest margin.
Deep dives
Charles Schwab: Revolutionizing Trading and Customer Service
Charles Schwab, founded nearly 50 years ago by Chuck Schwab, aimed to democratize trading by reducing high commissions. After May 1975's deregulation, Schwab emerged as a discount broker, focusing on bringing low-cost investing to the masses. Schwab's ethos of cost reduction extended to asset management and distribution of investment products, commoditizing services and leveraging technology to lower fees for trading and investment vehicles like ETFs.
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