IFB362: Why Some Stocks Always Seem Expensive

The Investing for Beginners Podcast - Your Path to Financial Freedom

Andrew Sather & Glassbox Media

Business, Investing

4.2 • 1.5K Ratings

🗓️ 14 October 2024

⏱️ 33 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Welcome to the Investing for Beginners podcast, episode 362. Today, Dave and Andrew explore the concept of competitive advantage period (CAP), a valuation tool associated with Michael Mauboussin. They'll discuss how CAP helps explain why certain businesses maintain higher valuations over longer periods and its implications for investors. [00:00:32] Introducing competitive advantage period (CAP), a valuation concept associated with Michael Mauboussin's writings. [01:08] CAP explained: Period where outstanding businesses maintain excess returns due to competitive advantages. [02:38] CAP helps explain why certain companies have higher valuations for longer periods. [04:09] Traditional 10-year DCF models may be too short for companies with strong moats. [06:32] Scale economy shared: A self-reinforcing moat that strengthens as a company grows. [09:40] Companies like Visa and Mastercard strengthen moats by working with potential competitors. [15:24] Market may value companies differently based on expected duration of competitive advantage. [17:42] CAP valuation must be logical; unreasonable growth projections can lead to absurd results. Today's show is sponsored by: Go to shipstation.com and use code INVESTING to sign up for your FREE 60-day trial. Go to monarchmoney.com/BEGINNERS for an extended 30 day free trial! Get two hundred fifty dollars when you join Ramp. Go to ramp.com/BEGINNERS Start building your dreams with Bluehost.com Find great investments at Value Spotlight Have questions? Send them to newsletter@einvestingforbeginners.com Start learning how to value companies here: DCF Demystified Link SUBSCRIBE TO THE SHOW Apple | Spotify | Google | Amazon | Tunein Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Thoughtful driving tips from Eso, number three.
0:03.0	This is Kiran. He's doing 70 on the motorway,
0:07.0	on his way to a cheeky spar appointment,
0:10.0	though his diaries as he's visiting a client.
0:12.8	Naughty Kiran, lowering his speed to 60 could save him up to 9% in fuel on the journey.
0:19.8	Enjoy that hot stone massage, Kiran.
0:22.6	Slowing down a little.
0:23.8	Live on the zone October 19th,
0:25.9	Francis and Garnu returns to the cage
0:28.1	versus Heena for Heder.
0:29.5	When giants collide, the Earth shakes.
0:31.8	The Professional Fighters League presents Battle of the Giants.
0:35.0	The two most feared MMA fighters clash in the cage for the World Heavyweight title.
0:39.1	Plus, MMA legend Chris Cybal faces two-time PFL champion, Larissa Pacheco, in one of the biggest women's
0:45.5	MMA fights ever. Battle of the Giants.
0:48.1	Engarnu versus Fheera, October 19th live on the zone by now at the zone dot com.
0:53.4	Love this podcast because it crushes your dreams and getting rich quick.
0:59.1	They actually got me into reading stats for anything.
1:01.6	You're tuned in to the Investing for Beginners
1:04.6	Podcast led by Andrew Sather and Dave Ahern. Step-by-step premium
1:10.7	investing guidance for beginners. Your path to financial freedom that premium starts now.
1:13.0	Your path to financial freedom starts now.
	...

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