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Investor Math: Valuing Companies in Your Head
by KevinBuild the mental toolkit great investors use to size up any company in minutes: market cap, multiples, TAM, growth, and margins — and learn to reverse-engineer what a stock price is really assuming.
Library
Lesson 1
The $400 Stock That's Cheaper Than the $8 Stock
An $8 stock and a $400 stock sit side by side, and everyone 'knows' which one is the bargain — so why do professional investors say the comparison itself is broken?
StartLesson 2
Revenue Is Vanity, Profit Is Sanity
Two companies each sell $10 billion a year. One is worth 20x the other. What separates them?
Locked till you take the prior lessonLesson 3
Market Cap vs. Enterprise Value: What You're Really Buying
Buying a company means buying its debts too. Learn the adjustment pros make before quoting any valuation.
Locked till you take the prior lessonLesson 4
The Multiple: Valuation's Universal Shorthand
Why does one sentence — 'it trades at 8 times sales' — tell an investor almost everything? Learn to speak in multiples.
Locked till you take the prior lessonLesson 5
The Rule of 72 and the Magic of Growth Math
Learn the mental shortcuts that let investors compound growth rates in their heads while everyone else reaches for a calculator.
Locked till you take the prior lessonLesson 6
TAM: Sizing the Prize
How big can this company possibly get? Learn to estimate total addressable markets from scratch — and spot inflated ones.
Locked till you take the prior lessonLesson 7
Margins and the Physics of a Business
Why can software companies keep 80 cents of every dollar while airlines fight over pennies? Margins reveal a business's DNA.
Locked till you take the prior lessonLesson 8
Operating Leverage: When Growth Turns Explosive
Some companies grow revenue 30% and profits 100%. Discover the hidden mechanism that makes profits move faster than sales.
Locked till you take the prior lessonLesson 9
What a Multiple Really Means: Expectations in Disguise
A 40x multiple isn't a price tag — it's a prediction. Learn to decode exactly what the market is betting on.
Locked till you take the prior lessonLesson 10
Reverse-Engineering a Stock Price
Take a real company's market cap and work backwards: what growth, margins, and market share would justify it?
Locked till you take the prior lessonLesson 11
The Traps: Dilution, Share Count, and Stock Comp
The subtle ways per-share math quietly erodes — and why sophisticated investors always check the share count.
Locked till you take the prior lessonLesson 12
The Five-Minute Valuation: Putting It All Together
Given just a few numbers about a company you've never seen, size it up in your head like a pro.
Locked till you take the prior lesson