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How to Analyze Any Stock in 2 Minutes with David Jackson, Seeking Alpha Founder & CEO - YouTube
Channel: Seeking Alpha
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about the system just to give you color
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like for the call a lot of what we've
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spent the last year and a half doing is
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when you know we built seeking alpha um
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it it had all of this information in it
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right like all of the articles you know
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you could read a ton
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the the problem was that for many
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investors they don't want to put all
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that time in
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or they they're willing to put the time
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in but only when they've narrowed their
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short list of the stocks that they're
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interested in
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and so one of the key questions that we
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addressed was
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how do we help you evaluate a stock like
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in two minutes
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and then give you the material to drill
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down a lot
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and that's what that's what premium
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really does for you and so for example
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what
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you know just you'll see we'll talk
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about this on the call but it's
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these boxes here right the rating
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summary and the factor grades and the
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quant ranking
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right that really give you the kind of
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two-minute view of the stock
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which is incredibly powerful the essay
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authors and wall street ratings
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um the average rating on stock by all
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the sell-side analysts which is wall
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street and all the software authors
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and if you scroll down to underneath the
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articles
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you can see here in this box what the
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distribution of opinion is about the
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stock
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you can see that there are 16 authors
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who covered facebook on seeking out for
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in the last 30 days
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and you can see the breakdown and on
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average you know it's a 3.71
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five is the most bullish and and you
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know zero is the most bearish
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but one is first and wall street is is
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more bullish on
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you know on on on facebook they have to
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have 48 analysts covering it because
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tons of australians cover facebook and
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then what we did was we put
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summaries of for the people who are
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bullish and bearish on the stock here's
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what they say in one sentence about why
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so without having to spend five hours
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you can quickly get
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here's the bull case on facebook and the
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and the bare case on facebook
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and i understand you know seeking alpha
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versus wall street often seeking out has
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a much better track record than wall
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street
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right because it's wisdom of the crowds
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right
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but then what we did was we asked
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ourselves hey listen you know there's
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a lot of data like financial data which
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is you know what
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how how's this stock's valuation how's
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its growth rate
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and so we have an enormous amount of
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data on seeking alpha
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but again the question we asked
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ourselves was how can we give you a
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really
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accurate picture of the stock in like
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two minutes
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and so we there's a quant rating here
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which is
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overall what our quant system thinks of
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the stock but it's
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it's based also on these factor grades
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where
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we we compare all the data for this
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stock
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to all the other stocks in its sector
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and so we compare all the valuation
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metrics for the stock to all the other
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stocks in its in its
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sector and then and and it turns out
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that facebook compared to the other
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stocks in its sector gets a c
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grade on valuation and a b plus on
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growth and an a plus on profitability
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and a d plus on momentum and at a b on
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earnings revisions
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and so kind of in one in like one minute
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you've got a pic and we show you what it
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was three months ago and six months ago
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you've got a picture
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of the stock but what's what's really
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unique about this
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is that you can drill down on all of
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these things to see
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all the underlying data so if you want
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to do more research right
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if you want to read the articles if you
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want to understand why it gets so for
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example let's let's do
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growth right um i'm going to click on
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both here are all of the underlying
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metrics
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which growth metrics for facebook it's
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year-over-year growth rate
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it's forward growth rate which is
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analyst estimates of how much will grow
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over the next year
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it's ebitda growth in the last year you
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know
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it's it's free cash flow per share
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growth eps growth all of these
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and it shows you each of these metrics
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for facebook
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and shows you the the the sector median
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of all the stocks in facebook sector
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and then facebook's difference to those
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and it puts a grade on it on every
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single one of the underlying metrics
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so the the beauty here is that i think
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that i think there's a lot of websites
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that
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um that give you kind of grades or
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or ratings for stocks but it's a black
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box and you don't really understand
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why yeah the beauty is what we're really
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trying to do
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is not tell you what the stock is we're
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trying to summarize the data for you
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so and then if you want to open it up
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and drill down so for example if
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you know if we look at value right so
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you know here it's got
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non gap pe ratio the training 12 months
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the forward you know the meaning that
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the the
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the um the p ratios that analysts use
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where they adjust for
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right one time and things like that and
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then there's gap trading 12 months and
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forward
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and enterprise value to sales both
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forward and trailing
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enterprise value to ebitda all of the
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price to sales
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all of these the beauty of all of this
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is that you don't have to believe our
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ratings
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you can just look at all the underlying
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data if you want to
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so let's say for example you say i'm a
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growth investor
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and i'm i'm i'm only interested in
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stocks with
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with really good growth you can look at
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this immediately and say okay i'm not
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interested in that stock i don't need to
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spend half an hour researching it
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because
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it just doesn't have good enough growth
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and i and i trust the the ratings here
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and then when you find the stocks that
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you're interested in you can go into a
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lot of depth and you can you can look at
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it you can look at all of the underlying
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data
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and in that respect it's immensely
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powerful
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because and i think this is this is very
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relevant
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to your followers right in your discord
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as well which is there are many people
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who don't have experience with financial
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analysis and they don't understand what
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all these metrics are
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and and for them what we give them is a
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really robust system that in two minutes
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we give them this scorecard
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where they can see okay seeking alpha
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authors are bullish on this stock
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wall street's bullish on this stock you
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know
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it's doing well in growth and
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profitability and earnings revisions and
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it's
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okay in valuation you know the momentum
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isn't great right now i'm happy to buy
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it
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and they can make their decisions based
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on that but for the people who want to
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drill down a lot more or as an investor
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gets more sophisticated
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and learns more let's say they go
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through your university
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right you know then all the data is here
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on seeking alpha
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and it's just remarkably the like the
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amount here
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is is astonishing but what we've tried
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to do
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is also make it really simple and
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instantaneous
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for people who just say please give it
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to me on a plate i don't want to spend
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an hour on this
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right the reason i love this is because
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this was built by a quan guy
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who who i met early on in my career and
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then circled back with him and we
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acquired his company
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but this is this is quantitative data
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for fundamental investors
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right this is the way i think as a
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fundamental investor which is
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how cheap is the stock or how expensive
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is it relative to other stocks
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how fast is this company growing
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relative to others
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how profitable is this company does the
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stock have momentum or not
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and our analysts the one that needs most
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vaccination is earnings revisions but it
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turns out to be one of the most
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important
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which is are analysts revising up
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or down their estimates for how much the
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company is going to earn
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generally when analysts start revising
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down estimates
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that means that the stock is getting a
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bit there's momentum to that so it means
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the stock's going to become more
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expensive
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because for example for the price it's
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at now if it's going to earn less
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analysts are revising down their numbers
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it's going to get more expensive
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it means its growth rate's going to go
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down it obviously
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often what happens is downward earnings
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revisions impact the price of a stock
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immediately
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so it impacts its momentum right and so
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the beauty of this
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is it's like if you take people through
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these it's
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this is actually kind of investing 101
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this is how to think about
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which is you know how fast is this
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company growing
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and the beauty of this is that once you
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just understand the concepts
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that this this kind of scorecard
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just does it for you instantaneously
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exactly
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we have to do tens of millions of
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calculations every morning these are
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updated every morning
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and there's tens of millions of
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calculations because you're comparing
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all these metrics
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to the same metrics for every other
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stock in the sector
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and then grading every stock relative to
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all the others
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so it's impossible to calculate this on
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your own i mean i mean you could
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it will take you a day to get one of
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these grades right if you
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so this is kind of the power of massive
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computing
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with huge amounts of data but what i
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love about it is the system is very
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transparent
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i'll give you one other example of just
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the kind of
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there's all sorts of surprises in the
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system let's say you're saying
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i really want to just check all the news
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on this company i'm very interested in
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this stock
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what's the news bin well you know if you
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look at this page you have to click on
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each of these headlines and you're
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clicking back with
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forwards if you click on the news tab
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and you're a premium subscriber
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look at this it just gives you a
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summarizes
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right of of each news story and you can
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hide the summaries
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just see the headlines or open the
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summaries you can
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filter the news by type so you can say
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you know okay i just want to see
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their earnings how were their earnings
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and here's just their earnings news
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right you know so i can i can see each
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earnings and read the read the reports
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of that or for example
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are they acquiring any companies this is
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eminent news so if i want to see which
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companies facebook has acquired
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this is m day news just about facebook
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and so
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me and this is i mean this what i looked
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at
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when we built this was you know i i'm
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i came from the world of professional
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investing where people use
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you know bloomberg and factset iq
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and these platforms cost thousands and
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thousands of dollars per year
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and my goal was let's democratize this
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yeah let's make available for everyone
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right
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and the result that the results of this
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are incredible and so the the line that
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what we're trying to achieve here is how
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can we on the one hand make this really
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accessible to new investors
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and for people who who don't want to
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spend a lot of time either because
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generally they don't want to spend a lot
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of time or they're just not ready to yet
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on this slide
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before they narrow down their list right
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and on the other hand so how do we make
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it really easy
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and give you a view of the stock
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literally in two minutes that you can
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trust
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but then also if you want to drill down
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we can give you all of the information
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we can give you articles and news and
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all the underlying data
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so that you never have to trust us or
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trust our ratings
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you can if you want to evaluate it all
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for yourself it's all there
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and we've made it super easy to drill
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[Applause]
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[Music]
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[Applause]
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down
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[Music]
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you
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