Equity Valuation Methods: Rapid Fire

What this video covers

• Why technical analysis answers when to trade and assumes all information is already in the price, while fundamental analysis answers what to buy by hunting for intrinsic value
• How support acts as a price floor and resistance as a price ceiling, and why volume confirms price on breakouts or breakdowns
• Why both top-down and bottom-up approaches belong to fundamental analysis, not technical analysis
• How to calculate price-to-earnings (P/E), price-to-book (P/B), debt-to-equity, current ratio, and return on equity (ROE), and why P/E alone is meaningless without peer comparison
• The Gordon growth model formula for dividend discount model (DDM) valuation, and the critical step of computing D1 by growing the current dividend by (1 + g)
• Why the DDM formula breaks when the constant growth rate (g) is greater than or equal to the required rate of return (r)
• How discounted cash flow (DCF) values any future cash flow stream, why higher risk demands a higher discount rate, and how that higher rate lowers present value