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Program Summary

Duration: 7:56

This lesson focuses on why financial education is more valuable the earlier you learn it. The reason is compounding. In the investing world, youth is a super-power.

Albert Einstein famously said that compounding was the 8th Wonder of the World.

Duration: 6:53

This lesson focuses on the danger of inflation. Understanding the danger is essential to long-term financial survival. Will $1 today be worth $1 in the future?

Thought Exercise: Don’t be Grandma Carolyn.

The stock market has been a window into a century of innovation. It has also played a major role in fostering innovation. This lesson focuses on portfolio theory and diversification.

There are the two roads to choose from when it comes to investing, picking your own stocks or have someone else do it.

The land of homeruns! This lesson focuses on the advantages and disadvantages of picking your own stocks.

Case Study: What were the signs of future greatness for Netflix? If you want to invest in winners, you need to know what they look like.

Duration: 13:27

The ability to evaluate risk and reward is the most important skill of the most successful investors. This lesson focuses on the “expected payoff” formula.

Case Study: How did Eddie Lampert become a billionaire by investing in the two worst retailers in the U.S.?

This lesson focuses on catastrophic losses and the chances of them occurring. This is called “tail risk”. The risk of catastrophic losses can reduce the effectiveness of the “expected payoff” formula.

Case Study: How would you like to buy a hotel resort for just $1?

Accounting is the language of business. Knowledge of accounting can help turn financial statements into exciting novels or even treasure maps.

The balance sheet is one of the first things investors should look at. It’s where companies disclose how much money they’ve borrowed. That’s critical information for risk analysis. This lesson covers the basic structure of a balance sheet and focuses specifically on company indebtedness.

The fact that market values and balance sheet values of assets can diverge widely because of cost accounting over time can create amazing investment opportunities. There’s no place on the balance sheet where that’s more true than intangible assets. These types of assets are often where the hidden treasure is found.

Case Study: The Disney acquisition of Marvel Studios in 2009.

An introduction to the basic structure of an income statement. This lesson focuses on financial ratios, Wall Street’s Rosetta Stone. With these ratios, the income statement reads like a novel, instead of number-filled pages.

The income statement can yell danger. It can also reveal a path to gold. This lesson focuses on how to read and analyze an income statement to uncover the story hidden in the numbers.

Case study: Constellation Software, the greatest software company that you’ve never heard of.

Buying a stock without knowing its valuation multiple, such as the price/earnings (P/E) ratio, is like flying a plane blindfolded through a narrow valley full of volcanoes. Objective valuation metrics are important when evaluating a stock. It helps remove emotion, the enemy of successful investing.

Thought Exercise: Which painting is worth more?

When you buy a company’s stock you own a piece of that company. This lesson explains why different companies have different valuations. The answer is crucial. The stock market is forward-looking and it is important to understand what that means.

Case Study: Bed, Bath & Gone. A tragic tale.

When it comes to what’s driving stock prices, sometimes the overall stock market’s behavior is the most important factor. Other times which industry sector a company is in matters most. There are also times where the company itself is all that matters.

“Buy the rumor and sell the news.” This lesson explains why that is often true. Different factors have different influence over stock prices. What matters the most in the short-term often matters very little in the long-term.

Case Study: Is General Motors’ stock undervalued?

An investment must earn more than its cost of capital to be considered worthwhile. As a result, that cost is the boss of bosses when it comes to which businesses a company should pursue. It determines which ones are financially viable.

Thought Exercise: The case of the Clueless Capital Corporation and the curse of earnings dilution.

A company earning high returns on capital invested in its business is a key characteristic of a superior business. For a company to create value for its shareholders, it must earn a return on its capital above the cost of obtaining that capital.

Case Study: The railroad company vs. the software giant.

Thought Exercise: Blackbeard’s treasure map.