The DCF Excel model from the video is available for download for channel members, I have posted the link on the Community tab for channel members to use. For information on the membership levels and benefits, check th-cam.com/channels/QQJnyU8fALcOqqpyyIN4sg.htmljoin
Thank you very much for the kind words! 😊 Please consider supporting the channel through a membership: th-cam.com/channels/QQJnyU8fALcOqqpyyIN4sg.htmljoin
around 15:00 things get way more interesting. Taking my words back. Will watch for sure other videos on guidance, it's extremely interesting. Thank you
Thank you! It takes a lot of zooming in to individual line items, and zooming out to see the bigger picture (and checking whether it makes any sense "holistically"). And then zooming in again, and zooming out again. Regarding guidance, it is interesting to follow companies that are notorious for underpromising and overdelivering: providing guidance at the start of the year (Jan/Feb) that is credible yet achievable, overdeliver in actual results (vs the guidance) every quarter, and continue to raise the guidance for the full year over the course of the year. Of course, there is a big difference between "short cycle" (e.g. lightbulbs) and "long cycle" (e.g. aircraft engines) businesses. In short cycle businesses, most of the revenue for the current quarter/year comes from orders received in that very period, while in long cycle businesses, orders today will get delivered years from now. I was teaching "building business acumen" several years at a company producing aircraft engines (in Derby UK), they didn't bother with publishing quarterly results (as there wasn't much news to report), all they did was half-year and full-year results.
@@TheFinanceStoryteller absolutely fun to read. Thank you very much. Let's get to books. Thanks again. Will respond to the videos you've sent me. Waiting for more! Trying to cook something on DCF, but also starting to realize it's just an image so another factor to take into account.
Thanks for the video, your classes are immensely helpful. I wonder how on earth you explain those concepts more clearly and quickly than my professors at the university…
You're very welcome! I probably have more real world experience than your professors. 😉 And it makes a big difference if you have "skin in the game": I own shares in Verizon, the company in the case study. That makes me vulnerable to confirmation bias, but also has a "penalty" for being wrong as I could lose my own money. Please share the videos and/or the link to the channel with your fellow students.
Hello again! I forgot to add: this video is part of a series. The other videos in the playlist could be helpful for you too. Prior to this, I just made a video on the Discounted Cash Flow method, where I go through the concepts and some of the choices you need to make in your analysis: th-cam.com/video/Wez6_1-9WiU/w-d-xo.html&pp=gAQBiAQB
Thanks for the video :) I have another question: Would you use different discount factors/hurdle rates for a Start UP-like company? E.g. 20% for the first 5 years and then 10% in the steady state or would you always stay with the same factor?
Keep it simple. There's no guarantee they will ever reach that "steady state". Same discount rate for the whole model / forecasting period. For startups, I would suggest to use 20% or more. I have heard of venture capitalists using 30%, 50% or even 70% for very early stage companies (pre-product, pre-revenue). With high discount rates like that, the potential future cash flows need to be very attractive, for the present value equivalents to be of any significance.
"made the very bold asumption" - can you develop it? It's like one should collect the info and make assumptions, then. Bold assumptions are baseless. With all due respect, where did you get that 3 or 2 % growth over the years?
Thanks for your comments! This video "DCF Excel model" that you watched is part of a playlist I am putting together on videos around the topic of DCF. It focuses mostly on the Excel aspects of valuation, while the related video "Discounted Cash Flow method (DCF)" th-cam.com/video/Wez6_1-9WiU/w-d-xo.html discusses concepts and reasoning behind information and assumptions. In that video, I mentioned the following when discussing the revenue forecast: For revenue growth, I have taken the 2024 guidance issued by the company, and applied the higher end of the range for the first three years, and then the lower end of the range for the last two years. 2% long term growth rate is also in line with the long term growth expectation of the US economy. The shortcut that I am taking here is that the guidance is for wireless service growth (2.0% to 3.5% expected for 2024), while I assume that the wireless equipment revenues grow at a similar rate, even though we know that these upgrades, replacements, and device additions, are more of a “lumpy” business.
@@TheFinanceStoryteller right. I'll watch the video and see if there is anything about guidance on the company. I'd love to see more videos where u actually find the info maybe based on investor relations? etc. how to scrutinise it thoroughly, what sources we shall use not to make it groundless because setting 2 or 3% based on nothing is nothing. Is that possible? :)
Here's the direct link including timestamp to the 2024 guidance from Verizon that I reviewed and incorporated in various ways in (basic as well as advanced) versions of the DCF calculation: th-cam.com/video/Wez6_1-9WiU/w-d-xo.html Assumptions are always a subjective interpretation of reality. I have been on the optimistic (high end) side in some sections, and more pessimistic in other places. Would be interested what choices you would make in terms of inputs into the model, and what the resulting outcome in terms of potential share price can be. If 10 different people are going through the same information, I would expect 10 different answers. Some of these answers might be very close to each other, while others might show significant variation. Talking about them and advocating your viewpoint (on line item level, as well as total picture) is useful, to see what you could have missed in your own interpretation. Going forward, please drop the "based on nothing" accusations if you refer to my work, it comes across as derogatory.
@@TheFinanceStoryteller I'll watch it as well. Thanks. You know, since you're revealing the work of yours not treating it as a piece of advice or something one would or should do that is DISCLAIMER as always, I think I can say it. You got me wrong. I wouldn't accuse you of anything, just asking questions and doubts coming to my mind. Sorry for that if it sounded too personal.
![ILLSLICK - KILLSHOT REMIX [FULL VERSION]](http://i.ytimg.com/vi/RIK8RrqIAzE/mqdefault.jpg)
The DCF Excel model from the video is available for download for channel members, I have posted the link on the Community tab for channel members to use. For information on the membership levels and benefits, check th-cam.com/channels/QQJnyU8fALcOqqpyyIN4sg.htmljoin
Seeing your videos on finance makes me feel better, your way of teaching finance is outstanding. Keep going on sir.
Thank you very much for the kind words! 😊
Please consider supporting the channel through a membership: th-cam.com/channels/QQJnyU8fALcOqqpyyIN4sg.htmljoin
Thank you, as always- good chance to review and refresh it
My pleasure!
around 15:00 things get way more interesting. Taking my words back. Will watch for sure other videos on guidance, it's extremely interesting. Thank you
Thank you! It takes a lot of zooming in to individual line items, and zooming out to see the bigger picture (and checking whether it makes any sense "holistically"). And then zooming in again, and zooming out again.
Regarding guidance, it is interesting to follow companies that are notorious for underpromising and overdelivering: providing guidance at the start of the year (Jan/Feb) that is credible yet achievable, overdeliver in actual results (vs the guidance) every quarter, and continue to raise the guidance for the full year over the course of the year. Of course, there is a big difference between "short cycle" (e.g. lightbulbs) and "long cycle" (e.g. aircraft engines) businesses. In short cycle businesses, most of the revenue for the current quarter/year comes from orders received in that very period, while in long cycle businesses, orders today will get delivered years from now. I was teaching "building business acumen" several years at a company producing aircraft engines (in Derby UK), they didn't bother with publishing quarterly results (as there wasn't much news to report), all they did was half-year and full-year results.
@@TheFinanceStoryteller absolutely fun to read. Thank you very much. Let's get to books. Thanks again. Will respond to the videos you've sent me. Waiting for more! Trying to cook something on DCF, but also starting to realize it's just an image so another factor to take into account.
Thanks for the video, your classes are immensely helpful. I wonder how on earth you explain those concepts more clearly and quickly than my professors at the university…
You're very welcome! I probably have more real world experience than your professors. 😉 And it makes a big difference if you have "skin in the game": I own shares in Verizon, the company in the case study. That makes me vulnerable to confirmation bias, but also has a "penalty" for being wrong as I could lose my own money.
Please share the videos and/or the link to the channel with your fellow students.
Hello again! I forgot to add: this video is part of a series. The other videos in the playlist could be helpful for you too. Prior to this, I just made a video on the Discounted Cash Flow method, where I go through the concepts and some of the choices you need to make in your analysis: th-cam.com/video/Wez6_1-9WiU/w-d-xo.html&pp=gAQBiAQB
Thank you good sir
Happy to help! Enjoy working with it.
Thanks for the video :)
I have another question: Would you use different discount factors/hurdle rates for a Start UP-like company? E.g. 20% for the first 5 years and then 10% in the steady state or would you always stay with the same factor?
Keep it simple. There's no guarantee they will ever reach that "steady state". Same discount rate for the whole model / forecasting period. For startups, I would suggest to use 20% or more. I have heard of venture capitalists using 30%, 50% or even 70% for very early stage companies (pre-product, pre-revenue). With high discount rates like that, the potential future cash flows need to be very attractive, for the present value equivalents to be of any significance.
@@TheFinanceStoryteller Thank you very much for the quick response. :)
Thanks
Happy to help! More DCF related content in this playlist: th-cam.com/video/Wez6_1-9WiU/w-d-xo.html&pp=gAQBiAQB
#BC_ministry_of _finance
"made the very bold asumption" - can you develop it? It's like one should collect the info and make assumptions, then. Bold assumptions are baseless. With all due respect, where did you get that 3 or 2 % growth over the years?
Thanks for your comments! This video "DCF Excel model" that you watched is part of a playlist I am putting together on videos around the topic of DCF. It focuses mostly on the Excel aspects of valuation, while the related video "Discounted Cash Flow method (DCF)" th-cam.com/video/Wez6_1-9WiU/w-d-xo.html discusses concepts and reasoning behind information and assumptions. In that video, I mentioned the following when discussing the revenue forecast:
For revenue growth, I have taken the 2024 guidance issued by the company, and applied the higher end of the range for the first three years, and then the lower end of the range for the last two years. 2% long term growth rate is also in line with the long term growth expectation of the US economy. The shortcut that I am taking here is that the guidance is for wireless service growth (2.0% to 3.5% expected for 2024), while I assume that the wireless equipment revenues grow at a similar rate, even though we know that these upgrades, replacements, and device additions, are more of a “lumpy” business.
@@TheFinanceStoryteller right. I'll watch the video and see if there is anything about guidance on the company. I'd love to see more videos where u actually find the info maybe based on investor relations? etc. how to scrutinise it thoroughly, what sources we shall use not to make it groundless because setting 2 or 3% based on nothing is nothing. Is that possible? :)
@@TheFinanceStoryteller you can also refer all that to this video to demonstrate it :)
Here's the direct link including timestamp to the 2024 guidance from Verizon that I reviewed and incorporated in various ways in (basic as well as advanced) versions of the DCF calculation: th-cam.com/video/Wez6_1-9WiU/w-d-xo.html Assumptions are always a subjective interpretation of reality. I have been on the optimistic (high end) side in some sections, and more pessimistic in other places. Would be interested what choices you would make in terms of inputs into the model, and what the resulting outcome in terms of potential share price can be. If 10 different people are going through the same information, I would expect 10 different answers. Some of these answers might be very close to each other, while others might show significant variation. Talking about them and advocating your viewpoint (on line item level, as well as total picture) is useful, to see what you could have missed in your own interpretation.
Going forward, please drop the "based on nothing" accusations if you refer to my work, it comes across as derogatory.
@@TheFinanceStoryteller I'll watch it as well. Thanks. You know, since you're revealing the work of yours not treating it as a piece of advice or something one would or should do that is DISCLAIMER as always, I think I can say it. You got me wrong. I wouldn't accuse you of anything, just asking questions and doubts coming to my mind. Sorry for that if it sounded too personal.