Fair value: Graham, Peter Lynch, DCF

Transcript

What Hira says, in Roman Urdu, with the English translation beneath each line.

1. 0:04Assalam-o-Alaikum, welcome to danioPSX. Aaiye seekhein, financial independence ke liye.Assalam-o-Alaikum, welcome to danioPSX. Let's learn, for financial independence.
2. 0:14Ye hai lecture number seventeen. Aaj hum seekhenge fair value kya hai, teen classic methods, Peter Lynch, Benjamin Graham aur DCF, aur in ki limits kya hain.This is lecture seventeen. Today we learn what fair value is, three classic methods, Peter Lynch, Benjamin Graham and DCF, and what their limits are.
3. 0:28Tools menu mein Fair value calculator hai. Fair value ek estimate hai ke har share ke peeche business kitna worth hai, uski earnings, growth aur dividends se.The Tools menu has the Fair value calculator. Fair value is an estimate of what the business behind each share is worth, from its earnings, growth and dividends.
4. 0:42Share chunein to company ki latest EPS, growth aur dividend yield khud bhar jaati hai. Growth pichle saal se li jaati hai, lekin twenty five percent par cap hoti hai.Pick a share and the company's latest EPS, growth and dividend yield fill in by themselves. Growth is taken from last year, but capped at twenty-five percent.
5. 0:56Government bond yield mein aaj ka T-bill ya PIB yield daalein. Discount rate aapka required return hai, yaani aap saal ka kitna return chahte hain.In government bond yield, enter today's T-bill or PIB yield. The discount rate is your required return, meaning how much return a year you want.
6. 1:08Peter Lynch method: fair P/E taqreeban earnings growth plus dividend yield ke barabar hota hai. Fifteen percent growth aur five percent yield wali company twenty times earnings par fair hai.The Peter Lynch method: a fair P/E is about equal to earnings growth plus dividend yield. A company growing fifteen percent with a five percent yield is fair at about twenty times earnings.
7. 1:19Benjamin Graham ka revised formula: EPS times, eight point five plus do guna growth, times four point four, divided by bond yield. Pakistan ke high rates mein aaj ka yield daalein.Benjamin Graham's revised formula: EPS times eight point five plus twice the growth, times four point four, divided by the bond yield. With Pakistan's high rates, enter today's yield.
8. 1:28Earnings DCF: EPS aapke rate se kuch saal barhti hai, aap dividends lete hain, aur aakhir mein expected P/E par bechte hain. Har rupay required return se discount hota hai.Earnings DCF: EPS grows at your rate for some years, you collect the dividends, and at the end you sell at the P/E you expect. Each rupee is discounted at your required return.
9. 1:43Middle estimate ko price se compare karein to margin of safety milta hai. Lekin ye formulas textbook yardsticks hain, price targets nahi.Compare the middle estimate with the price and you get a margin of safety. But these formulas are textbook yardsticks, not price targets.
10. 1:54Teeno methods growth par tike hain. Pichle saal ki growth aksar repeat nahi hoti, aur growth ya rates mein chhoti si tabdeeli answer ko bohat badal deti hai.All three methods lean on growth. Last year's growth rarely repeats, and a small change in growth or rates moves the answer a lot.
11. 2:09Is liye ek kam, zyada der chalne wala growth rate bhi try karein. Har method assumptions par hai, to answer ko ek range samjhein, target nahi.So also try a lower, more lasting growth rate. Every method rests on assumptions, so treat the answer as a range, not a target.
12. 2:20Neeche related calculators hain: pivot points, dividend income aur brokerage. Fair value ko P/E, results aur score ke saath mila kar dekhein, akela nahi.Below are related calculators: pivot points, dividend income and brokerage. Look at fair value together with P/E, results and the score, not on its own.
13. 2:34To aaj humne seekha: Peter Lynch, Benjamin Graham aur earnings DCF, aur ye ke fair value ek range hai, target nahi. Homework: calculator mein growth kam karke dekhein answer kitna badalta hai.So today we learned: Peter Lynch, Benjamin Graham and earnings DCF, and that fair value is a range, not a target. Homework: lower the growth in the calculator and see how much the answer changes.
14. 2:49Next lecture mein hum seekhenge news, company announcements aur insider trades kaise parhein. Video achi lagi ho to subscribe karein. Ye sirf education ke liye hai, investment advice nahi. Allah Hafiz!In the next lecture we'll learn how to read news, company announcements and insider trades. If you liked the video, please subscribe. This is for education only, not investment advice. Allah Hafiz!