42. Stock Valuation with Alex Mason of the Stock Stories Podcast

Alex Mason is the host of the Stock Stories podcast, where he explores the histories, business models, and economic characteristics of publicly traded companies. On this episode of CFO at Home, Alex and Vince discuss factors to consider when accessing the value of a particular stock, how understanding the basics of stock valuation makes you a better investor, America’s wealth gap, and more.

• Key Takeaways
• • Factors to consider when accessing the value of shares of stock: 
  • • Earnings/Profits - Is the company offering the shares actually making money?
    • What’s the quality of the company’s earnings (how do they make money)? 
  • Comparison of the current state of tech stocks versus the dot-com bubble days of the late 1990s-early 2000s
  • • In both cases valuations are really high
    • Many tech companies in during the dot-com bubble days had no profits; today’s tech leaders are generating profits and have huge cash reserves
  • Even if you a mutual fund/index fund investor (as opposed to buying  individual stocks), there’s still value in you understanding how individual stocks are valued; many passive funds are heavily weighted towards a relatively small number of stocks, so understanding the value of those few stocks could we worthwhile
  • Understanding the basics of how stocks are valued makes you a more knowledgeable investor; knowledgeable investors are less likely to panic and make short-sighted moves during a market correction.  
  • Mistakes beginning investors make:
  • • Lacking basic financial literacy
    • Buying stock because you like a company's products/service 
    • • Popularity does not mean a company has earnings/ is making money

• Resources:
• • One Up on Wall Street 

• Ways to contact/follow
• • Stockstoryteller.com
  • Stockstoryteller - Instagram
  • Stockstoryteller - Twitter

• Contact the Host - vince@thecfoathome.com