Stephen Penman: Value vs. Growth Investing and the Value Trap 

Agreed it is a very hard read, I've been struggling to read it, but you gave me extra motivation to do it.

@@shtookaralph5205 Hi there, I encourage you to embrace the struggle. I too struggled with the material, and it took me far longer than I would have liked to assimilate the material. But in the process I realized that I was actually learning the concepts bit by bit. One tiny fragment at a time. In fact, I've been through the book several times and it was so full of notes to myself (to explain a line or two of the text) and highlighting that I ended up getting a second copy of the textbook so that I had a clean copy that I could read through. Incidentally, don't feel that you've somehow failed by not getting through the material quickly. I'm self taught and it routinely takes me a lot longer to get through the material, but in the process you are interacting with the material which is the essence of learning. Maybe there are some people who can whip through material like this quickly, and to that I say, "good for them" but learning is a very individual journey that takes time, and you have to "play with the concepts" when somebody is not standing over your shoulder telling you what to do. But in the process you learn a lot more. There is one good source of videos by Dr. Matthew Gross on RU-vid who teaches the concepts outlined in Penman's Text Book. It will help you a lot. www.youtube.com/@drmatthewgrosse122 One last piece of advice. The most challenging part of Penman's system is applying it to real life. This is not because Penman's methods are wrong, but because you are dealing with the accounting of many different companies which can be quite ridiculously bad. (Omitted information. Statements that don't add up. Contradictory statements.) In the real world life is messy. But eventually you will learn ways to either ignore or paper over the blatantly wrong or contradictory financial statements. Either way it is the struggle that will teach you how to deal with the problems you encounter in financial analysis. Financial analysis is as much an art as it is a science. Good luck!

You nailed it! :-)

Well said

I suppose a low-cost value index fund would get the job done.

Re-watch the video again.

He is saying that by betting on high B/P and E/P you end up buying a more riskier investment. He proved that using some accounting principles. Most of the video explains the numbers behind the statement.

Simple. It's the reciprocals. If it is 30% empty, it is 70% full.

goodwill and intangibles.

I think because the yield at P/E of 11.5 is 8.7%. If PE is 11.5/1, the reciprocal is 1/11.5 = .0869 or 8.7%

yes, with a 11.5 pe you would have 8.7% return in an investment.

His bio says he hid his undergraduate study at the University of Queensland

When you dissociate the two, you, my friend become neither an investor nor an accountant but a gambler.

@@garhhh9513 idiot

@@garhhh9513 Goodluck retiring without investing your money and it being eaten away by inflation lol

@@garhhh9513 Your comment was extremely insightful, but it seems your audience wasn't having any of it.

Turn subtitle on and speed up the video