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@vyshnaviraja5511 күн бұрын
this is the best explanation ive received. thanks from INDIA.
@RyanOConnellCFA11 күн бұрын
Thank you from the US!
@user-yg7gn8yg8w10 ай бұрын
Cheers mate. Explaining it better then my lecturers.
@RyanOConnellCFA10 ай бұрын
Haha I appreciate it!
@nealshah9575Ай бұрын
Thank you Teacher
@RyanOConnellCFAАй бұрын
You are welcome Neal
@AshishKumar-if9yt9 ай бұрын
crisp and concise. Thanks
@RyanOConnellCFA9 ай бұрын
Glad it was helpful!
@arp3123 ай бұрын
Thank you sir for such wonderful video and explanation.
@RyanOConnellCFA11 күн бұрын
It is my pleasure!
@abdullahbinsohail7628Ай бұрын
Great explanation. You are a life saver.
@RyanOConnellCFA11 күн бұрын
My pleasure! Thanks for the feedback
@lifelessonsfromelsie79942 ай бұрын
Thank you 🙏
@RyanOConnellCFA2 ай бұрын
My pleasure!
@betastrand333310 ай бұрын
TY! this was wayyy clearer than how my professor tried to explain it
@RyanOConnellCFA9 ай бұрын
Haha I appreciate the feedback!
@funnyperson4016Ай бұрын
Buffett views retained earnings as the same or better than a dividend (no taxes for reinvested earnings), and has an equity bond theory that that accumulated value of “owner earnings” belongs to the investor…. by discounting the sum of all future owner earnings back to today in a similar manner, you can value a stock that doesn’t pay a dividend. Some people make the mistake of thinking equity bond is the initial 1/PE or E/P yield, but that isn’t how Buffett looks at it. I don’t know how bonds work or how Buffett values a bond, and I think Buffett is starting with that initial framework to build his equity bond theory but he has mentioned coupon rates and Mary Buffett has a few different books where she explains it a bit.
@Furry_lil_goblin10 ай бұрын
How did you get 103.47? 7.41+8.57+4.76+82.32 = 103.06
@RyanOConnellCFA10 ай бұрын
Good catch, that is just a summing error on my part. The rest of the logic in the video is right but I should have written 103.06
@JoseHernandez-ke7rr10 ай бұрын
Super clear explanation thank u!
@RyanOConnellCFA10 ай бұрын
Glad it was helpful!
@valeriocapano622211 ай бұрын
Thanks so much for the explanation
@RyanOConnellCFA11 ай бұрын
You're welcome!
@levibaptista79007 ай бұрын
Thank you
@RyanOConnellCFA7 ай бұрын
My pleasure!
@alexsutherland1175Ай бұрын
Isn't Dsub1 the current dividend multiplied by (1+div growth rate)? D1 should be the NEXT div to pay. In short, it should have been $8 * 1.01 = $8.08. The final formula would have been the $8.08/ (.08-.01). The intrinsic value using that formula would have been $115.43.
@annanielsen1658 ай бұрын
Why do we add the $100 at year 4? Is it because we expect to sell the stock again after those 4 years?
@RyanOConnellCFA8 ай бұрын
Correct! The $100 is the cashflow that we expect to receive from selling the stock 4 years from now. We expect the stock price to be $100 and we will sell the stock at that time
@agastyamishra3619Күн бұрын
I was also looking for the answer for the same question😅😅
@dreamthread Жыл бұрын
when using the Gordon Growth Model, what if g > r?
@RyanOConnellCFA Жыл бұрын
Good question! In the Gordon Growth Model, if the growth rate (g) is greater than the required return (r), the model will not hold, as it will predict a negative stock price, which is not realistic. This scenario typically suggests an overvaluation, unrealistic growth expectations, or too low of a required return.
@manishakaushik1125 ай бұрын
Best explanation ❤
@Evan-45795 ай бұрын
I have one question. Why is D1 = $8? Why is it not D1= 8(1+0.01)? Great video❤️
@RedTiGeRJJ Жыл бұрын
Great Video, thanks man
@RyanOConnellCFA Жыл бұрын
Glad you liked it! My pleasure
@husky90079 ай бұрын
You should do a problem where there is a period of high growth/low growth and constant growth thereafter. Kind of ties the Gordon model with a typical problem
@RyanOConnellCFA9 ай бұрын
Good idea, I can look into this topic in the future
@Gaurav_Shrivastav Жыл бұрын
Please make video on how to start preparation for CFA LEVEL 1 for 2024 and also on "Will A.I overtake the CFA's jobs in future?"
@RyanOConnellCFA Жыл бұрын
Those are 2 very good and broadly appealing video topics that I will look into
@Gaurav_Shrivastav Жыл бұрын
@@RyanOConnellCFA Thank you
@RyanOConnellCFA Жыл бұрын
@@Gaurav_Shrivastav Thank you for the suggestions!
@Hasnainkhan-xk8rz3 ай бұрын
can you explain why in gordon model we minus growth rate from the rate of return ???
@stankoone9666Ай бұрын
Because R is risk associated with a stock and g is growth rate associated with the stock. So you minus the risk from the growth rate which is positive to a stock to obtain less risk since potential growth reduces overrall risk in a firm. Hope it helps. Thats the best way i can explain
@watchmefilms8495 Жыл бұрын
thnks
@RyanOConnellCFA Жыл бұрын
My pleasure!
@avikstar60673 ай бұрын
great , but how do you use this information , this model basically tells you if the company is profiting or not . Is that its sole purpose?
@user-qp1dt8pw8k3 ай бұрын
It tells you if the company is correctly valued. If the Intrinsic value is higher than its current stock price, then the stock is undervalued and is selling for less than its actually worth so you should buy more of it.
@mohammadali-rp5ds5 ай бұрын
Please make video on multistage growth model
@hrcrewgaming8 ай бұрын
What if D2,D3, etc. is not given?
@RyanOConnellCFA8 ай бұрын
It depends on the way the question was phrased in that case. They may say, "the dividend will grow by 3% each of the next 2 years" which would mean you need to calculate D2 and D3 yourself
@jazmin98XD Жыл бұрын
yooo ty
@RyanOConnellCFA Жыл бұрын
My pleasure!
@snehabansal4205 Жыл бұрын
😊
@nessagotdrip6 ай бұрын
thanks i love you
@RyanOConnellCFA6 ай бұрын
You're welcome!
@hkim91513 ай бұрын
But expected dividend payouts in forever in 100 years or more and payout every 3 months (not each year,) 😂
@funnyperson4016Ай бұрын
Say again.
@cruz53274 ай бұрын
Liked this a lot was easy to follow. Was trying this out on Hershey stock to see if its a buy using Gordon Growth since dividends have increased the past 15 years but end up with negative number? Dividend CAGR 20 y is .0952 & amount is 4.46. 4.46/(.08 - .0952) = -293.42 ?😂 Either Im doing it wrong or Hersheys is going under asap hahah