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Lecture Feedback:

“Applied Finance takes a unique approach to identifying the intrinsic value of equity securities. Removing the noise from the earnings and focusing on understanding what a company’s economic margin is. The Deconstructing Value Investing presentation was extremely informative and the Pittsburgh CFA Society appreciated Rafael’s time and preparation.”
– Steven Miller, CFA®, CIPM | BNY Mellon

“Applied Finance’s Deconstructing Value Investing presentation was a refreshing reminder of why traditional perpetuity based valuation models, while mathematically elegant and easy to describe, are primarily ineffective in constructing portfolios. In contrast Applied Finance’s economic margin methodology provides a theoretically sound, empirically vetted and actionable process for investors. As I listened to Rafael Resendes discuss the current state of “value” investing, I was reminded of a former colleague and Applied Finance client who often said “A vacation at the swamp is cheap but it is not a bargain”. ”
– John Toohey, CFA®  | Two Centuries Investments

“I really enjoyed the Deconstructing Value Investing presentation given by Applied Finance. It’s nice to have data to back up what one has observed empirically.”
– Mark Carlton, CFA® | Trademark Financial 

“The Deconstructing Value Investing presentation clearly articulates a logical and reliable approach to calculating intrinsic value. Like their work, the Applied Finance team is first class.”
– Keith P. Duet, CFA® (CFA Society Louisiana – Past President) | Duet Asset Management 

“I recently attended the Deconstructing Value Investing lecture by Rafael Resendes of Applied Finance. His expertise, knowledge and ability to effectively link theoretical concepts to actionable investing is well worth the time and attention which is really a gift to any practitioner, especially a Chartered Analyst.

The mixed signals provided by talking heads and the market are easily discounted and confidence can be provided by an approach that is so steeped in real data and results.”

– Mark A. Fernandez, CFA® |R. M. Davis


  • The Gross Profitability Trap

    The Gross Profitability Trap “But this time, it’s different!” More foolish words are rarely spoken in the financial industry, but they always seem to find their way back into the stock market lexicon. A firm’s [...more]
  • Intrinsic Value Factor™

    February 4, 2019 Applied Finance

    Valuation Driven™ Investing begins and ends with calculating the intrinsic value of every stock in a benchmark against which a portfolio is constructed, and comparing those values against traded prices. All of Applied Finance’s portfolios are Intrinsic Value Driven™, which differs significantly from a “value” perspective. To gain a better understanding into Applied Finance’s Intrinsic Value Driven™ approach, let’s first review traditional approaches to “Value”.

    The traditional approaches to finding undervalued stocks use a simple ratio such as P/E or P/B, or a mix of them. These common approaches to value come with many shortcomings: […more]

  • Then and Now: Buyers Remorse Versus Sellers Loss

    October 31, 2008 Applied Finance
    Over the past couple months, worsening macro economic conditions, declining corporate profitability and a bottomless stock market have investors longing for the good old days when the economy delivered steady increases in GDP growth with [...more]
  • Economic Margin®

    A corporate performance metric should provide insights into what a firm is worth. Most money managers utilize common earnings-based measures of corporate performance and value, which are suspect and easy to manipulate. Applied Finance developed the Economic Margin (EM) framework to remove the noise inherent in accounting data.

    Traditional accounting-based valuation methods provide an incomplete view of a company’s value by not accounting for the investment needed to generate the earnings, cost of capital, inflation or cash flow. […more]