Warren Buffett Explains How To Value Stocks (Example Included)

Warren Buffett is considered one of the greatest investors of all time, amassing a net worth of over $100 Billion dollars. Today, I’m going to explain how Buffett uses Discounted Cash Flow to calculate the intrinsic value of a stock. This is the second video in a series, where I analyze different methods of calculating intrinsic value. In the first video, I explained the technique of Ben Graham, who was actually Warren Buffett’s mentor. So that’s definitely worth watching to build some foundational ideas.

Recent Videos:

Timestamps:
Intro: 0:00
DCF Concept Explained By Warren Buffett: 1:04
How to Calculate DCF (Variables): 6:11
Warren Buffett & Charlie Munger on Discount Rate: 8:51
DCF Formula Explained: 12:58
Example: 13:37
Not an Exact Science: 15:24
Outro: 18:00

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#Stocks #Investing #WarrenBuffett

[flawaii-pines]

The only thing more awesome than that intro is that website you made.

[EpicFinance]

Your channel is like Cold Fusion meets Finance. Love your content. Keep it up!

[Dividendology]

Loved how you point out that’s it’s more of an art than a science. I actually uploaded a step by step video on how to calculate the value of a stock using the discounted cash flow model the other day on my channel. Love that DCF tool on the website you’re building!

[Mark_Dividends]

Very interesting, looking forward to the website.

[Steve_Gouws]

Great explanation. Thanks for the video

[nibraszuhair]

You need more subscribers your channel is perfect

[uv]

This video is just superb!
its amazing how you clarify things. even though I heard countless of explanations and I'm well familiar with this concept this video was refreshing and fun!

[leonardonolasco]

You have been very helpful, R
relevantand important. 👍

[brettpayton]

Very awsome video. Opens the eyes to that longer range objective. Do you know anywhere we can find a similar calculator like that to help figure that equation?? TIA

[fendermon]

Well done video. I don't see how the price of gov bonds has any bearing on anything, since they have no intention of being over-weighted in bonds. Might as well plug the price of Easter eggs into the formula.

[lucaslopez]

Do you think you can do a stock review of Berkshire Hathaway? Love the videos!

[midosobhy]

there's some confusing stuff here, like the growth rate which growth rate I should enter ? the next quarter ? year ? or 5 years or the the growth rate for the whole 100 years ?
the second one is why 100 years ? no one can predict 100 years usually analysts uses 5, 7 or 10 years but of course I won't own stock 100 years because I won't be around :D

[ravindertalwar]

Congratulations 👏 and all the best for your success and happiness 💖

[JuanCamba]

If you are using 5.76 to FCF1, how do you know FCF2 value

[markcarrigher]

Doesn't simply wall street use DCF for its valuations?

[geoffreylittle]

Great video! I find your channel to be one of the best in investing. Do you think that by investing in these wonderful dividend paying businesses, you can beat the market over the long term? Love to get your take

[markodenda]

Buffett is not much interested in intrinsic value rather how much compound return he will get at given price… if price is right he buy

[joep]

The way they've treated BNSF employees during the pandemic is gross.

[midosobhy]

there's some confusing stuff here, like the growth rate which growth rate I should enter ? the next quarter ? year ? or 5 years or the the growth rate for the whole 100 years ?
the second one is why 100 years ? no one can predict 100 years usually analysts uses 5, 7 or 10 years but of course I won't own stock 100 years because I won't be around :D