Use financial Modeling such as Discounted Cash Flows to determine whether a stock is worth buying

First watch Aswath Damodaran talk “Valuation: Four Lessons to Take Away“. It is IMHO, one of the best valuation video out there. It will set your expectations straight.

From there, have a look at his courses on Youtube and his blog. He has valuated a couple of companies and made the excel sheets available. I would recommend you download them and try to understand it while learning from his videos. I personally found that the best way to learn valuations is to practice it. It takes time and you will make mistakes, so make reasonable investments. As Aswath said himself, if you were right, it was more likely due to luck than skills.

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