Value Investing In Your Car Episode 21: If I Could Only Rely On 3 Investing Metrics What Would They Be? Part 1

I’m curious about everything so this leads to a wide range of reading and learning outside of value investing, finance, and investing.

In these Value Investing In Your Car Episodes, we talk about some of these things and much more including:

• Mental models
• When does value investing work best
• Where it works
• You get book reviews from everything I learn from
• I talk about the most important thing I learned in 2017
• How to learn faster
• Useless investing metrics
• If I could only use 3 investing metrics what would they be
• And much more…

If you want to learn from the other episodes in this series, you can watch the entire playlist here.

A couple weeks back, I finished up a mini-series on the 4 most useless investing metrics – those 4 videos are linked below.

1. Here I detailed why P/E is useless
2. Here I detailed why beta is useless
3. Here I detailed why 99.9% of the time goodwill is useless
4. Here I detailed why 99.9% of the time synergy is useless

This week, I begin another mini-series answering the following question, “If I could only rely on 3 investing metrics, what would they be?”

This week, I talk about why I love and rely on FCF / Sales so much, and why it’s one of those 3 metrics.

Let’s get to it.

In the 11 – minute video above, I detailed the following reasons why I love this metric so much:

• Why it’s so fantastic
• What this metric means
• How this one number can help you figure out many things
• Including if a company’s management is doing a good job
• If the company’s operations are healthy
• If the company’s operations are efficient
• How much debt a company could potentially take on
• If the company can buy back shares
• If the company can reinvest a lot in their own operations without having to take on debt or by diluting shareholders
• And more…

This is only the first metric I would rely on if I could only rely on 3 metrics for the entire analysis.

What are the three metrics you’d rely on if you could only rely on 3? Let me know in the comments below.

P.S. If you’d like to learn how to value and evaluate businesses like a world-class investor, check out our three programs that can help you do this.

Our Value Investing Training Vault, our Value Investing Masterclass, and our $10,000 Coaching Program.

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