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Yahoo
8 minutes ago
- Yahoo
Warren Buffett says this book changed his life forever. Here's the real key to long-term gains
Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below. Warren Buffett is one of the most renowned investors of our time. So, it's easy to forget that he was once a beginner too. Buffett claims he bought his first stock at age 11, then spent eight years focusing on stock price movements instead of studying the underlying companies. Don't miss Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 5 of the easiest ways you can catch up (and fast) You don't have to be a millionaire to gain access to this $1B private real estate fund. In fact, you can get started with as little as $10 — here's how 'I had the whole wrong idea,' Buffett said in a 2022 interview with journalist Charlie Rose. 'I thought the important thing was to predict what a stock would do and predict the stock market.' But when Buffett was 19 or 20 years old, he read a book that would change his perspective forever: 'The Intelligent Investor' by Benjamin Graham. Instead of charting stocks or "stock picking," Graham advocated for the valuation of underlying companies. He theorized that stock prices eventually follow a company's financial performance. This simple philosophy shifted Buffett's view on investing forever. 'I realized that I was doing it exactly the wrong way,' Buffett said. 'I rejiggered my mind when I read the book.' This philosophy has worked for Buffett, but not everyone has time to read 500 pages of financial analysis a day. Here are three ways to level up your investing depending on how much time you have. Do your research Buffett once famously said that he reads 500 pages a day. While this might not be what every investor needs to do, you should think about spending more time with news and analysis from reputable sources. Buffett's approach favors analysis based on understanding the companies you're investing in, their industry, and the forces impacting their potential for growth. However, technical analysis — focusing on the numbers — also has a place for the modern investor. When you learn to balance both data and investment philosophy, you'll be well on your way to becoming a savvy market player. In short: where you get your stock market info from matters. With Moby, you can get advice from expert former hedge fund analysts, with a 30-day money-back guarantee. In four years, across almost 400 stock picks, Moby's recommendations have beaten the S&P 500 by almost 12% on average. Moby's team spends hundreds of hours sifting through financial news and data to provide you with stock and crypto reports delivered straight to you. Their research keeps you up-to-the-minute on market shifts and can help you reduce the guesswork behind choosing stocks and ETFs. Plus, their reports are easy to understand for beginners, so you can become a smarter investor in just five minutes. Trust the experts Aside from doing your own research, it can pay to invest in professional advice. Even Buffett surrounded himself with knowledgeable advisors at Berkshire Hathaway. Everyone has areas of expertise, but no one knows everything. With this in mind, an expert advisor can help you raise your game. As Buffett once said, 'Pick out associates whose behavior is better than yours and you'll drift in that direction.' 'In looking for people to hire, you look for three qualities: integrity, intelligence, and energy. And if they don't have the first, the other two will kill you.' If you're unsure which path to take amid today's market uncertainty, it might be a good time to connect with a financial advisor through This online platform connects you with vetted financial advisors best suited to help you develop a plan for your new wealth. Just answer a few quick questions about yourself and your finances and the platform will match you with an experienced financial professional. You can view their profile, read past client reviews, and schedule an initial consultation for free with no obligation to hire. You can view advisor profiles, read past client reviews, and schedule an initial consultation for free with no obligation to hire. Read more: Rich, young Americans are ditching the stormy stock market — A 'set it and forget it' approach While keen investors may be willing to spend the time to learn the markets, many investors can be better off with a passive approach. "In my view, for most people, the best thing to do is own the S&P 500 index fund,' Buffett once said. "The trick is not to pick the right company. The trick is to essentially buy all the big companies through the S&P 500 and to do it consistently and to do it in a very, very low-cost way.' A passive approach might not produce spectacular wins, but it can be a low-risk option for the investor who is simply looking to build a reliable nest egg for retirement. What to read next How much cash do you plan to keep on hand after you retire? Here are 3 of the biggest reasons you'll need a substantial stash of savings in retirement 5 simple ways to grow rich with US real estate — without the headaches of being a landlord. Start now with as little as $10 This tiny hot Costco item has skyrocketed 74% in price in under 2 years — but now the retail giant is restricting purchases. Here's how to buy the coveted asset in bulk Financial aid only funds about 27% of US college expenses — but savvy parents are using this 3-minute move to cover 100% of those costs Stay in the know. Join 200,000+ readers and get the best of Moneywise sent straight to your inbox every week for free. This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
Geek Wire
9 minutes ago
- Geek Wire
The realities of enterprise AI deployments, with Amazon Web Services VP Francessca Vasquez
On this episode of the GeekWire Podcast, we dive into enterprise AI adoption with Francessca Vasquez, a vice president at Amazon Web Services who leads its work with enterprise customers through the AWS Professional Services Group and the AWS Generative AI Innovation Center. Vasquez shares insights from more than 1,000 customer engagements across industries, explaining how companies are moving from AI experiments to deployments. We discuss the rise of AI agents, the challenges businesses face in scaling AI initiatives, and why some industries are surprising everyone with their pace of innovation. We also discuss specific examples including Yahoo Finance's multi-agent news analysis system, the PGA Tour's AI-powered real-time golf commentary, Formula 1's root cause analyzer for troubleshooting race-day issues, and Jabil's shop floor assistant for manufacturing employees. Listen below, or subscribe in any podcast app, and keep reading for highlights. On the rapid pace of AI evolution: 'The pace of innovation right now for generative and agentic AI is just a lot faster than what I've ever seen in my career. I couldn't tell you what are things going to look like in 12 to 18 months. That's how fast things are moving.' Industries adopting AI faster than expected: 'If you had asked me 24 months ago, did I think one industry would really just be leading in adoption, I probably would have said, just look at all of your digital native companies… I would have been wrong. … We've seen a lot of innovation happening in financial services. We've seen a lot happening in manufacturing and healthcare.' On moving from proof of concept to production: 'The only way you get to value is by actually putting things into production. … Of these same companies that were doing experiments or proof of concepts a year ago, only about 30% of them actually got into production. With the work that we do, we've been able to increase that well over 50%.' What makes for successful enterprise AI deployments: 'These things still require having very good leadership conviction. The companies that may be progressing further, they've got a leadership team who believes in the pace of technology, or they've got senior technical thought leaders on their board. That makes a very big difference.' Beyond the technology: 'How [companies] think about their culture and their people, that becomes a huge differentiator for both talent development and attraction. … It's more than just the technology of models and latency and tokens. It's also about the people and the culture and what experiences you want.' On AI agents and the future of work: 'I expect that any organization that's offering consulting services, they will all have to have some level of generative AI and agentic AI in their workflows — all of them, every last one of them.' Related Stories and Links: Audio editing by Curt Milton.
Yahoo
38 minutes ago
- Yahoo
Does This Valuation Of Richelieu Hardware Ltd. (TSE:RCH) Imply Investors Are Overpaying?
Key Insights The projected fair value for Richelieu Hardware is CA$26.75 based on 2 Stage Free Cash Flow to Equity Richelieu Hardware is estimated to be 31% overvalued based on current share price of CA$34.93 Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Richelieu Hardware Ltd. (TSE:RCH) as an investment opportunity by projecting its future cash flows and then discounting them to today's value. Our analysis will employ the Discounted Cash Flow (DCF) model. Believe it or not, it's not too difficult to follow, as you'll see from our example! Remember though, that there are many ways to estimate a company's value, and a DCF is just one method. If you still have some burning questions about this type of valuation, take a look at the Simply Wall St analysis model. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. The Method We use what is known as a 2-stage model, which simply means we have two different periods of growth rates for the company's cash flows. Generally the first stage is higher growth, and the second stage is a lower growth phase. To start off with, we need to estimate the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, and so the sum of these future cash flows is then discounted to today's value: 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Levered FCF (CA$, Millions) CA$85.9m CA$82.8m CA$81.3m CA$80.9m CA$81.3m CA$82.1m CA$83.3m CA$84.8m CA$86.5m CA$88.3m Growth Rate Estimate Source Analyst x1 Est @ -3.60% Est @ -1.77% Est @ -0.49% Est @ 0.40% Est @ 1.03% Est @ 1.47% Est @ 1.77% Est @ 1.99% Est @ 2.14% Present Value (CA$, Millions) Discounted @ 7.4% CA$80.0 CA$71.8 CA$65.7 CA$60.8 CA$56.9 CA$53.5 CA$50.5 CA$47.9 CA$45.5 CA$43.3 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = CA$576m The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 2.5%. We discount the terminal cash flows to today's value at a cost of equity of 7.4%. Terminal Value (TV)= FCF2035 × (1 + g) ÷ (r – g) = CA$88m× (1 + 2.5%) ÷ (7.4%– 2.5%) = CA$1.8b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= CA$1.8b÷ ( 1 + 7.4%)10= CA$904m The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is CA$1.5b. The last step is to then divide the equity value by the number of shares outstanding. Compared to the current share price of CA$34.9, the company appears potentially overvalued at the time of writing. Valuations are imprecise instruments though, rather like a telescope - move a few degrees and end up in a different galaxy. Do keep this in mind. Important Assumptions We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Richelieu Hardware as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 7.4%, which is based on a levered beta of 1.133. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. See our latest analysis for Richelieu Hardware SWOT Analysis for Richelieu Hardware Strength Debt is not viewed as a risk. Dividends are covered by earnings and cash flows. Weakness Earnings declined over the past year. Dividend is low compared to the top 25% of dividend payers in the Trade Distributors market. Expensive based on P/E ratio and estimated fair value. Opportunity Annual earnings are forecast to grow for the next 2 years. Threat No apparent threats visible for RCH. Looking Ahead: Although the valuation of a company is important, it ideally won't be the sole piece of analysis you scrutinize for a company. It's not possible to obtain a foolproof valuation with a DCF model. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" For instance, if the terminal value growth rate is adjusted slightly, it can dramatically alter the overall result. Can we work out why the company is trading at a premium to intrinsic value? For Richelieu Hardware, we've put together three pertinent items you should explore: Financial Health: Does RCH have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk. Future Earnings: How does RCH's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing! PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the TSX every day. If you want to find the calculation for other stocks just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
