WEBVTT 00:03.010 --> 00:08.360 In this video we'll talk about the complete value investing roadmap so you'll know exactly your next 00:08.360 --> 00:12.290 steps and what you'll need to do to become a successful value investor 00:15.020 --> 00:20.120 as you've already learned by implementing the value investing strategy you'll need to follow these three 00:20.120 --> 00:22.160 simple easy steps. 00:22.280 --> 00:26.900 First we'll look for companies with a strong financial and operating performance. 00:26.900 --> 00:31.820 What we want to do is a value investor is to make sure that the company we're investing in has enough 00:31.820 --> 00:38.270 capacity for maintaining its operations profitably as well as having an ability or strong economic mode 00:38.450 --> 00:41.470 to compete with its rivals in the same industry. 00:41.570 --> 00:44.480 You can evaluate of a business is financially strong or not. 00:44.540 --> 00:50.270 By looking at some financial ratios and performing a financial statement analysis you'll need to look 00:50.270 --> 00:55.640 into your company's balance sheet income statement and cash flow statement to find out what's behind 00:55.640 --> 00:56.640 the numbers. 00:57.230 --> 01:04.680 And when you found a solid company the next step is important you'll need to make sure that it's undervalued. 01:04.850 --> 01:10.400 You can easily determine if a stock is undervalued or overvalued by performing a stock valuation based 01:10.400 --> 01:13.450 on some method like the discounted free cash flow model. 01:14.240 --> 01:19.580 After estimating a company's intrinsic value you simply compare its intrinsic value with the current 01:19.580 --> 01:21.050 market price. 01:21.050 --> 01:25.970 If the intrinsic value is greater than the current market price the stock is considered undervalued 01:26.510 --> 01:31.940 and on the other hand when the intrinsic value is lower than the market price the stock is overvalued. 01:32.210 --> 01:37.790 It's simple as that and always make sure you'll apply a margin of safety to make sure that you'll actually 01:37.790 --> 01:40.280 buy an undervalued stock. 01:40.290 --> 01:43.800 However knowing your company's intrinsic value is not enough. 01:43.830 --> 01:47.450 That's because you'll need to find the best opportunity to buy it. 01:47.550 --> 01:52.710 A great company can easily end up being your worst investment when you buy it at the wrong time and 01:52.710 --> 01:57.170 that's why technical analysis is essential in your value investing system. 01:58.010 --> 02:03.710 By utilizing technical analysis you'll know exactly when to buy your stock to maximize your profit while 02:03.710 --> 02:10.710 reducing your risk and the final step is sell your stock when it becomes overvalued again. 02:10.740 --> 02:16.440 You can determine the best time to sell for maximum profit by using both stock valuation methods and 02:16.440 --> 02:18.020 technical analysis. 02:18.810 --> 02:21.970 So that's the three simple steps you'll need to follow. 02:21.990 --> 02:26.470 Now let's talk about the roadmap for mastering the Value Investing technique. 02:26.490 --> 02:34.200 I've been a value investor for seven years now and here's what I've learned to become a master to become 02:34.200 --> 02:35.970 a profitable value investor. 02:36.090 --> 02:42.090 First and foremost you'll need to learn all the best value investing strategies to find solid and financially 02:42.090 --> 02:44.190 strong companies to invest in. 02:44.370 --> 02:50.370 That is to say you'll need a system you'll need a set of investment criteria for evaluating and picking 02:50.400 --> 02:56.640 undervalued stocks by having a system you can make sure that all the companies you choose are rock solid 02:56.640 --> 03:02.040 companies and you can easily automate your stock analysis and valuation process. 03:02.070 --> 03:08.220 You can either build your own system or simply follow or copy and paste value investing system after 03:08.220 --> 03:13.590 knowing all the strategies that actually work you'll need to enhance your expertise so you can understand 03:13.590 --> 03:16.980 better all the businesses that you're investing in. 03:16.980 --> 03:22.920 You'll need to learn more about financial ratios and how to read and analyze a company's financial statements. 03:22.920 --> 03:27.300 If you're an accounting or finance student when you are in college you might have gotten familiar with 03:27.300 --> 03:28.620 these topics. 03:28.620 --> 03:34.140 But if you're not a finance person learning these topics may be a little bit harder for you but they 03:34.260 --> 03:38.090 are essential if you want to be successful as a value investor. 03:38.130 --> 03:39.410 So learn it well. 03:40.130 --> 03:43.580 Next you'll also need to learn more about stock valuation. 03:43.580 --> 03:48.470 At least you should master how to use the discounted free cash flow model so you can project future 03:48.470 --> 03:54.560 cash flows of a company and estimate its intrinsic value and when you're done with the intrinsic value 03:54.890 --> 03:57.050 things will become much easier. 03:58.000 --> 04:03.520 Your next step is to use technical analysis to determine the best time to buy and sell your stocks by 04:03.520 --> 04:09.700 using technical analysis you simply look at a stock chart and determine current market trends and predict 04:09.700 --> 04:12.070 the future movements of your stock. 04:12.070 --> 04:18.160 You'll need to look at some technical indicators in oscillators like the moving averages the RSI the 04:18.160 --> 04:25.760 Bollinger bands volume the Mac D et cetera and you can also look at chart patterns and candlestick patterns 04:26.070 --> 04:30.320 so you can predict if your stocks price will go up or down in the future. 04:31.150 --> 04:37.660 And the final thing you'll need to develop a strong winning mindset and learn about trading psychology. 04:37.670 --> 04:43.280 You also need to know what affects the price of your stock how to trade a minimal risks how to reduce 04:43.280 --> 04:47.010 risks on your investments by placing a stop loss etc.. 04:47.870 --> 04:51.800 So that's everything it takes to become a profitable value investor. 04:51.990 --> 04:57.020 You know value investing is a big subject and it does require some kind of expertise. 04:57.110 --> 05:02.890 A lot of work and patience but you know value investing will eventually pay off. 05:02.900 --> 05:10.290 I promise you that imagine you can grow your investments by at least 15 to 25 percent a year by just 05:10.290 --> 05:15.660 following a simple system that you can create on your own that's much easier than putting your money 05:15.660 --> 05:22.350 somewhere else like in the bank or your 401k and IRA that generally pay you nothing in return or a small 05:22.350 --> 05:24.620 fraction of the return you could have made. 05:25.550 --> 05:28.850 So welcome to the value investing world. 05:28.910 --> 05:34.640 I believe you can do whatever it takes to become a better investor and you can change your financial 05:34.640 --> 05:35.380 future.