And as an outside individual, and I still consider myself, in spite of what I do for a living, I still consider myself retail investor,

I can hold things forever. I don't need to worry about, you know, companies meeting guidance. I'm like, you know what, I'm good.

The market's pretty wild right now, so I thought it was a good time to take a step back and

look at the fundamentals of valuation.

I caught up with Motley Full Canada's Jim Gillies to talk about how regular investors

can value companies before buying a stock, why a price to sales multiple can steer you wrong, and one advantage that retail

investors have over the institutional ones. Jim, I think now's an interesting time to talk about valuation in the market.

If you look at the way that equal weighted standard and Pours 500 indexes have been doing compared to market cap weighted.

You can see that the big dogs are really pulling things forward.

So I think it's good to take a step back and give a little primer on valuation and investing and you are your big valuation guy.

So to set the table, what's the difference between price and valuation for investors looking at any stock?

Sure, I have been accused of being a valuation guy from time to time.

There is a cliche that price is what you pay and value is what you get.

And that's actually not bad.

All a stock price tells you is what other investors or prospective investors or soon to be

former investors are willing to transact at the moment.

It doesn't really tell you, doesn't tell you much about, it doesn't tell you about the underlying

business, it doesn't really tell you anything about what's going on and one of the things I like to do when I

when I used to teach this stuff and with some of the other analysts that I deal with a young

analysts that I mentor is I always say the two most important questions in the valuation process because you

found a stock you're really really excited about it and look you might be fine

buying it today you know after you're really excited about reading about their

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