Analyst Course


  1. Prior mentions of an analyst course with readers’ suggestions were posted:

http://csinvesting.org/2017/03/10/a-strategy-for-resource-stocks-investing-course/

http://csinvesting.org/2017/03/15/update-on-analyst-course-part-1/

http://csinvesting.org/2017/03/17/update-on-analyst-course-part-2-readersuggestions/

There are plenty of other investing courses ranging from free to $20,000.

http://www.tradingacademy.com/ Here you can learn technical analysis and trading techniques for $5,000 to $20,000.  I won’t say this is a scam, but you won’t learn anything than you could find in a $20 book on technical analysis.  Then ask yourself if and how technical analysis has ANY value?

https://www.udemy.com/value-investing-bootcamp-how-to-invest-wisely/  A typical $200 course for beginners.

http://www8.gsb.columbia.edu/execed/program-pages/details/61/VI ONLY $7,200 for three days.  Learn from the famous Prof. Greenwald.  How can you be a value investor and then pay that amount?

https://www.quora.com/What-are-the-best-online-value-investing-courses Look for yourself.

Stamford online value investing course

Columbia_VI_Executive_Summary

Columbia_VI_Sample_Agenda

http://pages.stern.nyu.edu/~adamodar/ FREE. But even an “expert” like Prof. Damodaran can make critical mistakes as pointed out here: http://csinvesting.org/tag/vale/  You must understand economics, banking, and credit cycles!

https://youtu.be/_uQjGz6jp2E?list=PLF1wHLfTCGUQ85w90LIg-1YXZdnUKOGtO 91 short lectures on Buffett.   Not bad.   A good supplement to your readings of Buffett.

https://youtu.be/Jo1XgDJCkh4   M. Pabrai opines about value investing. How to invest in 100-baggers.  I think Mr. Pabrai will beat the averages, but he has had 80% declines in his portfolios (2008/09).  Learn the proper lessons and NEVER cease thinking for yourself.

What Can I Contribute?

Based on my research, I still believe there is a place for a serious, rigorous, and a comprehensive course and resource center to help investors be better independent thinkers and analysts of businesses.  Over twenty-five years, I have collected a huge array of investment writings, case studies, lectures, etc. that would help serious investors–the equivalent of four graduate level courses on investing.  Why pay $60,000 per year to go to graduate school to learn value investing.   Well, students pay the $60,000 for the name brand, the certificate and the relationships with other students. Not a apples-to apples comparison–to be fair.

The issue now is organizing and reformatting the material so both beginner and expert can improve.  My bias is to learn from great investors from theory to case study.   There is nothing new investing that hasn’t been said  before by Buffett, Graham, Klarman, and Jesse Livermore. Why not learn from them instead of from a flatulent, tenured business professor (ironic?!).

While at college, I worked as a pilot. Learning to fly used the theory of flight that the student applied in good, day-light weather with a flight instructor, then progressing to independent flight.  Even Munger says the process of flight training is efficient.

A Craft

Investing is a craft or both an art and science. You need the expertise and experience to place facts, information into perspective.   An investor must understand how capital is allocated by management (Corporate Finance). Take dividends.   There are many perspectives to view dividends, but dividends are paid out of FREE CASH FLOW.   So what is free cash flow and how can we know if it is sustainable?  To understand that you must convert accounting information into underlying reality.  An entire 412 page book is devoted to all the issues surrounding sustainable free cash flow, http://160592857366.free.fr/joe/ebooks/tech/Wiley%20Creative%20Cash%20Flow%20Reporting.pdf

You understand the details but you should not get lost in minutiae because you must focus on what is important and applicable to the opportunity.

Therefore, the course will need to cover the basics like:

  • Does value investing work?
  • Important concepts: How to read, how to think. How to learn.
  • Studying great investors as they apply value investing principles.
  • How to value businesses.
  • Analyzing competitive advantage or disadvantage.
  • When to concentrate and bet heavily/using options, stubs.
  • Subsets of value investing: Growth, special situations, and distressed.
  • And many other skills

You must know:  (1) how to value a business and (2) how to think about prices.  The devil is in YOU and the details.

You either buy an undervalued asset/non-franchise business that is subject to reversion to the mean (growth doesn’t add value)  or

You buy a franchise that depending upon its moat has slower reversion to the mean.  Growth is valuable within a franchise.

The course will take students through those two types of investments with case studies. Students then can refer to Buffett, Graham and others who applied value investing.

One goal would be to help students develop their OWN investment philosophy.

How to SEARCH, VALUE, MANANGE A PORTFOLIO, and IMPROVE THE YOU are involved in having a comprehensive investment philosophy. You will have a library of investors’ different approaches and philosophies.

I probably need four to six months to put the course together.  Several of you have kindly offered to help. I appreciate your interest, and I will reach out at the appropriate time.

The goal will be to have a resource for students to build a strong foundation of skills and knowledge with an area to communicate with one another.

All for now.

13 responses to “Analyst Course

  1. Hi John,

    The course looks very interesting and it’s good to know when it is likely to begin.
    In the meantime I’m looking to learn more about valuation. I’ve recently read your notes on EBITDA and it’s flaws as well as two documents from the same FEB 2015 section on Enterprise Value.
    I think what I should focus on next is to understand how investment capex is likely to affect future earnings. I also understand that measures such as ROIC and ROE are important when valuing a company.
    Would you please be able to recommend me any sources that may be particularly useful for this and are there any other things that you would suggest that I read more about.

    Regards,
    Peter

  2. Hi John,

    I am a full-time investor who used to teach a value investing course. It started out informally teaching some friends what I do, then transitioned to an invite-only online course. I stopped running it, but maybe I can offer some unsolicited advice.

    1. Don’t do it for the money. This site gets a decent amount of traffic, so you can probably make a decent annual six-figure amount from a course. But given the time commitment (the email volume alone…), if you really know what you are doing you could make way more from just straight investing.

    I have taught and lectured at universities and genuinely enjoyed teaching, but keep in mind it will take time from your personal investing which will cost you money.

    2. Most students just want to be told what to do. They will ask convoluted questions that sound like progress is being made, but they are really distractions from the heart of value investing.

    I thought charging a high 4-figure price would weed out the lazy, but I ended up with professionals like doctors and engineers who were very diligent, but just never did get the big picture. I now understand better what Buffett says about it either “clicking” or not with people.

    The truth is, I can teach the basic principles of value investing in a 1-2 day seminar. Out of 100 people, maybe a couple will take those ideas and run with it. The rest will always have more questions, waste time reading books on distressed debt, complicated mergers, etc., and make super complicated spreadsheet models (this one is especially popular), anything but actually sitting their asses in a chair with a 10-K, reading and thinking about a business.

    My course was a “zero to hero” style, which sounds like what you’re going for, but I found that the few who do really well just need to be shown the basics, the rest was just busy work for those who want to play investor. When the people who get it run across something they don’t understand, they dig up the answer as needed.

    If I was doing it again, I would do a shorter, much cheaper course that covers value investing philosophy, the basic math and accounting of value, then digs into specific examples of finding value. After a handful of examples of seeing it in action, it will either “click” or not. Then I would be sure to set them up with a “where do you go from here” so that they are empowered for when they do eventually have questions (questions that arise from actually looking at companies).

    Best of luck.

    • Thank you for your thoughts and advice. You are right on–doing it for money/profit would be insane. I would be doing it for several reasons:
      It has never been done before–or at least I can’t find anything close. 2. Through teaching, I learn. 3. I ALREADY have a vast library of materials–it is a shame that those materials are not organized in a coherent fashion to help others learn. 4. I am crazy!

      98% of the students will not be committed enough to be true investors. When I was sitting in Joel Greenblatt’s class, the students there were paying $70,000 or more to attend Columbia Business School. Say they take 10 classes a year, then $7,000 for that class. Yet, with one of the best investors in the world, about 1/2 were playing video games on their computers!

      I might be in touch with more questions. Thanks again!
      THANK YOU!

    • Perhaps, I am Don Quixote–tilting at windmills.

      Perhaps, the case studies will be one tool to weed out the non-thinkers. Your advice confirms some of my worries.

      But part of the purpose will be to have a learning library for folks to refer to.
      Some value will come from the students/investors communicating with each other. Say a student aks how do you figure out free cash flow or ROIC? Another student could simply email them the link or the person could do a search on the web-site and go to the section on FCF or ROIC.

      I agree that not many are willing to self-educate themselves, but that is what the best have done and will do.

      Investing is simple, but not easy. Trite but true.

  3. Financial Models with Excel: http://www.asimplemodel.com/

  4. Hi John,

    I appreciate your perspective on what a good Value Investing course would contain. As you say, there are many great resources available for educating oneself. But there isn’t one resource that is exceptionally comprehensive.

    Over the past two years, I’ve undertaken a serious investment of my time in learning how to best invest money and believe that the Value model is the best bet for someone who enjoys researching the marketing and finding good deals.

    I agree with your comment about not getting lost in the details. Since I come from a technical background, it’s easy for me to think that more data leads to more efficient decision making. But it seems like a critical value add for a new course will be to help the students to learn what to focus on without getting lost in the details.

    I’ve also considered putting together what I’ve learned into a blog/podcast to help others and to solidify my own knowledge through the teaching process. As such, I’d be happy help vet your curriculum from a “beginner’s mind” perspective as well as developing it.

    Cheers,
    -Philip

  5. Hi John,
    Excellent material with tremendous value you have on this site.
    A properly structured value investing course is very much needed, and you’d be the right person to do it. I have been studying value investing on my own for weeks, and I think some of the comments shared with you nailed it when they said that there is a serious need for practical training on how to apply the techniques. Given the nature of value investing and accounting techniques, you can never do a step by step guide, instead you must internalize the process and learn how to subjectively apply the needed parts for each evaluation.
    And that has been struggle so far, because the only way to get to “internalizing the process” happens with sufficient practical experience and mentorship.
    It’d be great if you can share with me some resources, and I am fully on board for this course.

  6. Hi John

    as I finished the files you emailed me and went through the case studies in those files I just got more thirsty for the same kind of material. I might not be of great help buy would LOVE to participate in anyway I could be helpful to this course preparation. please count me in as well.

  7. Hi John,

    Count me in for the materials! We were already discussing the CBS Value investing MBA program reproduction idea, so maybe its a way to combine both in one?
    One idea would be to also have a look at the curriculum of CBS program and see whether it could be used as framework to organise the course.

    Another point would be see whether we could add an emphasis also on the special situations as classic value investing is currently quite a challenge given the overall market multiples in US. This is what Tobias Carlisle has been saying.
    Also a history of market crashes and cycles could be of importance as part of the course.
    As Howard Marks says – we can’t predict the future but we should know very well where we stand right now.

    Happy to help with what I can John! Cheers for creating this course!!!

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