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A Great Value Investing PDF for All You Freeloaders

Hey you – hey you, FREELOADER!  Stop right there!  I got something for you…it’s an awesome, comprehensive value investing PDF that you can have…and did I say that it was free? 

No? 

Well, good news – it is!

If you’re reading this blog, then you likely know Andrew Sather and have read some of his blogs, listened to his podcast, or maybe even used his Value Trap Indicator to help you find companies that are undervalued vs. their intrinsic value.  But if you haven’t downloaded the free PDF at stockmarketpdf.com, then what are you doing?

I mean, come on – it’s free!  That has to be the first thing that you do, right?

The PDF is thorough, and I mean thorough.  It’s 40 pages of straight knowledge straight from Andrew to us as investors.  At first, it might seem too intense to digest but I promise it’s not.  He did a great job of laying it out in easy chapters to understand, and a very easy to read way, that makes it a great tool to not only the new investor but those that have been investing for years.

So, what exactly is included in the PDF?

Below is the table of contents included in the PDF:

As you can see, it really is 7 simple steps to understanding the stock market.  Something that I love about the PDF is that Andrew really takes some time to focus on the ‘why’ of investing. 

He does this by talking about compound interest and how it’s really the thing that makes investing worth it.  He ends the section by talking about the Rule of 72, which is essentially a rule that tells you how long it takes to double your money and gets you your first introduction to compound interest and how amazing it is.

Then he goes into some of the stock market basics, such as investing on analysis vs. media noise, dollar cost averaging and making sure that you don’t time the market.  I can tell you that ignoring any of these three important lessons can be a fatal flaw and I can also tell you that I have made each one of these mistakes when I first started investing.

If you’re currently investing then you’re likely familiar with these terms but if not, they’re truly building blocks that are so important to building a great foundation for your investing journey. 

If you don’t understand these terms and how to apply them, then your risk is going to intensify.  Specifically for me, dollar cost averaging was a major lesson that I had to learn and it has helped me avoid my instinct of trying to time the market and helps smooth out any risk that I have when I am either entering or exiting a position because it’s spread amongst many days of buying and selling. 

Ok – you have the fundamentals down now, so what next?  Time to buy your first stock!  Andrew talks next about making that first purchase and getting your feet wet. 

He talks about the entire process of setting up an account, finding the stock and then physically purchasing it, which is a bottleneck that I see with a lot of aspiring investors. 

It seems like many people want to invest but have an issue taking that ‘first step’ and getting into the market.  Once you buy your first stock, then the wheels will slowly start to gain traction and things will start to make much more sense to you.

The next topic that is focused on is fees.  Believe it or not, you used to have to pay every time that you bought AND sold a stock, and it usually was $5 – $7 for each transaction, regardless if you were buying or selling, and regardless of the value of the transaction. 

So, if you were to buy $100 of a company and then sell it 6 months later, you paid $5 – $7 on the purchase and then another $5 – $7 on the sale, so you were immediately down 10-14%.  Crazy!

Fortunately for us, many brokerages don’t charge fees anymore and I think a lot of that has to do with Robinhood starting this free commission trading.  To me, that was the one advantage that Robinhood had, and now that many firms offer transactions without fees, I think you’d be silly to consider Robinhood as your investing platform.

Congratulations!  You officially are now an investor and you are officially an owner of a company.  Even if it’s one share of Apple, you are a partial owner of Apple and that’s the mindset that you should have. 

So, what’s next?  How do you continue to shape your investing knowledge and strategic plan? 

Well, Andrew will tell you!

Andrew focuses next on some of the most important ratios for identifying successful stocks in the past, such as P/B and P/S and shows why they’re so impactful.  He talks about the value of dividends and how if you implement DRIP (Dividend Reinvestment Plan) then it’s an extremely effective way to maximize compound interest. 

Remember the term compound interest?  That’s why we’re going through all of this in the first place!

You’ll learn about earnings in the PDF and how you should be viewing them, as they are a very important part of the business but shouldn’t be viewed in isolation as a buy/sell reasoning.  At the end of it all, earnings are why a company is actually in business, but it is just one of many different pieces of financial information that you need to be cognizant of when evaluating a company.

And that’s it!  Believe it or not, 40 pages is very concise considering how much information that you are given (for completely free I might add).  And my favorite thing is that it’s laid out in such an easy to comprehend way that you can read it as you go through the process. 

It’s not imperative to understand the P/B ratio if you’re trying to learn about how the stock market works.  It’s laid out stage-by-stage so you can digest it as you go along the process. 

And again, it’s free – just download the PDF!  Your future, early-retired self will thank you for it!