🏰 Quality Stocks 🧑💼 Former Professional Investor ➡️ Teaching people about investing on our website.
- Tweets 42,814
- Following 400
- Followers 492,507
- Likes 6,378
“Forecasts may tell you a great deal about the forecaster; they tell you nothing about the future.” - Warren Buffett
2
13
145
9,619
“We aim to achieve superior returns by being long-term owners of high-quality companies (with substantial economic moats, great growth potential, and run by trust-worthy people).” - Li Lu
6
5
113
9,991
Great CFOs use certain tools to make intelligent decisions.
This table covers 20 of them, from DuPont analysis and WACC to scenario planning and the balanced scorecard.
Free PDF file here👇🏻
4
10
70
15,502
"Brilliance is the ability to simplify a mass of information into a simple yes-no decision." - Warren Buffett
11
92
805
29,249
7/ Cost-to-Duplicate
Ask: what would it cost someone to build this exact company from zero? Prototype, patents, R&D, all of it. Smart investors refuse to pay more than what it costs to build a competitor.
1
1
1
243
6/ Asset-Based Valuation
Just add up what the company owns — cash, equipment, receivables — and subtract what it owes.
1
1
1
247
5/ Combo Platter Method
You build three valuations — best case, middle case, worst case — using similar startups as a reference. Then you check that number against Berkus and Risk Factor Summation.
Gravyty raised a $1M seed round using this method.
1
1
247
4/ Risk Factor Summation
You score 12 different risks — management, funding, competition, legal stuff, and so on — each from -2 to +2.
This is more detailed than Berkus, but is still a judgment call.
1
1
1
269
3/ VC Method: You guess what the company will be worth at exit, then work backward to today.
[Step 1]:
Terminal value = revenue at exit × profit margin × industry P/E
$20M revenue × 10% margin × 25x P/E = $50M
[Step 2]: Divide by the return the investor wants (say 20x) to get post-money value.
$50M ÷ 20 = $2.5M
[Step 3]: Subtract what they're investing to get pre-money value. $2.5M − $1.5M investment = $1M
That $1M is what the company is worth today, before the investor's capital goes in.
1
1
1
285
2/ Scorecard Method
Take the average valuation of similar startups that recently raised money. Then adjust it up or down based on:
Team (up to 30%)
Market size (25%)
Product (15%)
Competition (10%)
Marketing (10%)
Funding need (5%)
Other (5%)
1
1
2
485
7 ways to value a company with no revenue
1/ Berkus Method: Score the company across 5 factors
Here's a simple breakdown 👇🏻
3
3
30
15,553
“Most people who have been really successful in the stock market say the same thing – that they’re not smart enough to get into the market and out of it. So they tend to remain more or less in the market at all times.” – Walter Schloss
9
24
249
19,442
How do companies defend against hostile takeovers?
Here are 18 defense strategies (free PDF) 👇🏻
3
13
57
15,438
“A great company is one that’s going to remain great for thirty years. If it’s only going to be a great company for three years, it isn’t a great company." - Warren Buffett.
15
48
445
19,830
2. Be a contrarian
“Be fearful when others are greedy and greedy when others are fearful.”
2
1
18
948
3. Opportunities
“Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble.”
1
1
17
1,019
4. Circle Of Competence
“Know your circle of competence and stay within it. The size of that circle is not very important; knowing its boundaries is.”
1
3
19
1,015
7. Temperament Over Intelligence
“Success in investing doesn’t correlate with IQ once you’re above the level of 25.”
1
1
14
1,070
8. Be kind.
“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
1
1
22
1,141
9. Economic Moats Matter
“You want a business with a durable competitive advantage—something that protects it from the competition like a moat protects a castle.”
1
17
1,172
10. Have a long-term mindset
“If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes.”
1
1
18
1,242
11. Pay up for quality businesses
“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”
1
1
18
1,364
12. Simplicity beats complexity on the stock market
“There seems to be some perverse human characteristic that likes to make easy things difficult.”
1
28
1,453
13. “The stock market is a device for transferring money from the impatient to the patient.”
3
1
35
1,762
