Tangible vs Intangible Assets.

What's the difference?

Here's everything you need to know: They confused me until I discovered an easy way to distinguish them:

𝗧𝗮𝗻𝗴𝗶𝗯𝗹𝗲 𝗔𝘀𝘀𝗲𝘁𝘀 𝗖𝗮𝗻 𝗕𝗲 𝗧𝗼𝘂𝗰𝗵𝗲𝗱

𝗜𝗻𝘁𝗮𝗻𝗴𝗶𝗯𝗹𝗲 𝗔𝘀𝘀𝗲𝘁𝘀 𝗖𝗮𝗻'𝘁

How to analyze an Income Statement, FAST.

Warren Buffett’s 8 Income Statement 'Rules of Thumb': 1: Gross Margin

🧮 Equation: Gross Profit / Revenue

👍 Rule of Thumb: 40% or higher

🤔 Buffett's Logic: A consistently high gross margin signals that the company isn’t competing exclusively on price.

Some stocks are STRONG BUYS when they fall

Other stocks are SELLS when they fall

How can you tell the difference?

Watch for these 5 financial yellow flags: 1) GOODWILL WRITEDOWN

This represents the premium a company pays for an acquisition above its fair market value.

If there’s a major goodwill write-down on the Income Statement, it means management has wasted a TON of capital.

Capitalism is brutal.

If you invest, you MUST know how to identify a moat.

Here are 9 financial “rules of thumb” that Warren Buffett uses to tell if a company has one: 1: Gross Margin

Found: Income Statement

Formula: Gross Profit / Revenue

Moat: Consistently above 40%

No Moat: Under 40% & volatile

How to analyze an income statement in less than 2 minutes: The income sheet is one of the three major financial statements.

It shows a company’s:
▪️Revenue (Sales)
▪️Expenditures (Costs / Expenses)
▪️Net Income (Earnings, Profits)

Over a period of time.

Financial Statements For Beginners

Want to learn accounting?

Study these 9 simple infographics (a visual thread) ↓

How to analyze a cash flow statement in less than 2 minutes: The Cash Flow Statement shows how cash moves in and out of a company over a period of time.

Its purpose is to track cash movement through a business.

"Margin of Safety" by Seth Klarman is an incredible investing book.

But a used copy costs $1,200!

Here are 26 short investing lessons from this classic book (for free): 1: Markets are volatile. Never invest unless you are sure a "margin of safety" exists.

2: Focus on the intrinsic value of an investment. Only act when there's a meaningful difference between value and price.

The P/E ratio SUCKS.

It’s a flawed metric that deceives investors.

Here's exactly why the P/E ratio can be INCREDIBLY misleading (and what to use instead): The P/E ratio's flaw is that the "earnings” can be misleading.

If “earnings” aren’t sustainable, or are artificially inflated/depressed, the P/E ratio will be wrong.

Here's all the reasons why that can happen...

7 visuals every investor should memorize:

1: In the long run, stocks win: 2: You make far more money by holding through bull markets that you lose by holding through bear markets.

Buffett. Lynch. Munger. Fischer.

All of these investing legends use checklists.

Here’s the ultimate list of questions for creating an investing checklist (all yours for free): Business Basics

The Rule of 72 is the MOST IMPORTANT "mental math trick" for investors to know.

Here's how it works: Humans tend to think *linearly*.

When we see a curve, we mentally approximate it by a straight line.

This helps us cope with changes in the world around us.

Tom Engle has lived off of his portfolio for 40 years (!!!)

How? He's an incredible investor with a BRILLIANT cash management strategy.

Here's exactly how it works (step by step): Let's say Tom's portfolio is worth $100,000 in the middle of a bull market.

Tom is happy with this number and wants to protect it.

He mentally calls this $100,000 his "protected value."

All his cash management decisions are based on this number.

Warren Buffett's favorite investing book:

Securities Analysis by Ben Graham

It's FILLED with timeless wisdom that still applies today.

Here are 12 powerful lessons every investor should memorize: 1. Investing versus speculating

Investors make decisions based on the facts and value of the asset.

Speculators make decisions based on other participants' behaviors.

Know the difference:

"Accounting is the language of business."

-- Warren Buffett

Here's a primer on the fundamentals: 5 Core Accounting Principles:

The P&L Statement, Visualized.

If you're in business, you MUST understand how a Profit & Loss Statement works.

Here's everything you need to know: The P&L (or Income Statement) shows a company's profitability at multiple levels over a period of time using accrual accounting.

Its purpose is to track a company's revenue, expenses, and profits.

Here is a "typical" layout and what each term means:

8 visuals every investor should memorize:

1: In the long run, stocks win: 2: You make far more money by holding through bull markets that you lose by holding through bear markets.

My worst investing decisions ever all contain the same word:

Sell

But that doesn't mean I "buy and forget"

Here are the exact reasons I will exit an investment: 1: Thesis Busted

Translation: I was wrong

This could be because:
▪️Brand deteriorated
▪️Management isn't executing
▪️I misjudged the moat
▪️Rising competition

If the original reasons I bought are no longer valid, I admit defeat and move on

How to analyze an income statement, FAST.

Study these 7 infographics:

1: Income Statement Overview 2: Three Types of Analysis

The most powerful investing principles I've ever learned are counterintuitive.

That’s logical - if they were intuitive, I wouldn't need to learn them.

Here are 7 counterintuitive investing principles I had to learn the hard with (with visuals) 1: Don’t haggle

If a stock is trading at $21, I used to set a limit order for $20.50

But my orders usually didn't fill.

Haggling caused me not to BUY a few mega-winners.

Which is FAR MORE costly than slightly overpaying.

5 short videos every investor should watch:

1: Everyone's a genius in a bull market

https://twitter.com/unusual_whales/status/1608073024367910912

2: Buffett on predicting the short-term price of a stock:

https://twitter.com/GrahamStephan/status/1574819661895856128