Reading Time: 4 minutes Friends, One of the trickiest parts of investing is valuing a business. Consider the most popular valuation tool: the price-to-earnings (P/E) ratio. On the surface, it seems pretty simple: the lower the P/E, the "cheaper" a stock is; the higher the P/E, the more "expensive" it is. But scratch the surface just a little and things get murky. Consider: In March of 2013, Netflix shares traded for a P/E of 653. It was "ridiculously expensive." And yet, over the next decade, the stock was a... …

Reading Time: 4 minutes Friends, Which of these two stocks would you invest in? Stock #1 Expenses have increased 260% since 2019. Gross margins have contracted over that time. The P/E ratio is over 200. Stock #2 Revenue is up 320% since 2019. Operating margins have expanded 1,400 basis points over that time. The P/FCF ratio is 35. We hope the answer is obvious. Stock #2 would definitely win our money. Torrid revenue growth means people love what's offered. Expanding operating margins suggests there's a moat present... …

Reading Time: 4 minutes Friends, In 1982, Mark Lenzi set an audacious goal for himself: win a gold metal. As a diver in a competitive field, Lenzi knew that the odds were stacked against him. Undeterred, his singular focus for the next decade was to achieving his goal. Lenzi's intense focus and hard work finally paid off in 1992. He took home the gold medal at the Barcelona Summer Olympics. Lenzi returned home a champion. Yet, something unexpected happened next: he fell into a deep depression. Contrast that story... …

Reading Time: 3 minutes Friends, Last week, Tesla held one of the most-anticipated earnings releases of recent memory. Though its third-quarter report in October was largely solid, shares lost half their value in three months time. With reports of tapped demand and rumors of a highly-distracted CEO circulating, everyone wanted to know: What is actually going on at Tesla? The result of the report: it was a nothing-burger. Sure, shares immediately rebounded. And fears of a worst-case scenario were assuaged. But there... …

Reading Time: 4 minutes Friends, Every month, Brian Stoffel shares his stock holdings on Twitter. But there's one stock he leaves out -- and it's his longest-held position: Aflac. Those of you who follow three of us know that Aflac is not our normal cup of tea. We tend to prefer innovative, young, disruptive companies that are growing fast. But the story of Aflac is worth telling. Back in February 2009, Stoffel was still a middle school writing teacher, just dipping his toe in the market. His broker said Aflac stock... …

Reading Time: 3 minutes Friends, In 1951, a wealthy Cornell student -- Jane Leidloff -- found herself on a diamond expedition in Venezuela. While there, she fell in love with the indigenous Ye'kuana people. She lived in the jungle with them for three years. In a book published years later, she included the story of Caesar -- born in the tribe, later "adopted" by modern Venezuelans, but who returned to the tribe as an adult. Initially, Caesar was overjoyed that he didn't have to work. The rest of the tribe was …

Reading Time: 3 minutes Friends, On September 11, 2001, the tiny Canadian town of Gander increased its population by 73%. That's because 7,000 people flying on 38 airplanes from around the world were forced to land in the wake of terrorist attacks. They ended up stranded in Gander for an entire week. Many were taken into the homes of complete strangers for the duration. Imagine you were a Gander resident about to take someone in; what kind of information would you want to know? Off the top of my head, I'd …

Reading Time: 4 minutes Enrollment in our flagship course Financial Statements Explained Simply closes in six days. We made some major changes to the course based on student feedback, so we firmly believe this will be our best cohort ever. Sign up here using the code BBFRIEND200 for $200 off the list price. But hurry -- this code expires at 11:59 PM (EST) on Monday, January 9th. Friends, Last year, global sales of plant-based meat rose 31% to more than $10 billion, according to Statista. Over the next five years,... …

Reading Time: 3 minutes Friends, 2022 has been a brutal year for investors. The S&P 500 is down 20%; the NASDAQ is down 33%. The ARKK ETF fell 67%. Heck, even the Vanguard Total Bond Market ETF dropped 12%. In times like this, it's easy to beat yourself up. You're probably saying things like "the market is rigged", or "I'll never be a good investor," to yourself. Don't. Those are toxic thoughts. Instead, we recommend a strong dose of self-compassion. This doesn't mean you lie to yourself by believing that nothing …

Reading Time: 4 minutes Friends, In 2017, Alex Honnold scaled the 3,000-foot sheer cliff in Yosemite known as El Capitan with no ropes. One mistake would had lead to a painful death. A movie called Free Solo documented Honnold's risky ascent. The climb is widely considered to be one of the greatest mental and physical feats by a human...ever. While we are in awe of Honnold's breathtaking climb, we disagree that it was his greatest mental feat ever. Instead, we think that happened in the late fall of 2016. With... …