Comments (20)

Jun 13, 2017

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Jun 13, 2017

Hi @peanuttaco2 ,
I took some online training courses for equity research and that helps me a lot. You have a lot of courses on coursera but you will need to pay for some of them. This one is not so bad its free on the Internet" Equity Research Training" (you can search it on google).

Try it, might help you.

Jun 13, 2017

Hey there,

What's your background? I ask because some of the things in those reports don't look like typical things in equity research. For example, the multiples there should be FY1 or FY2, not LTM. There also isn't enough discussion on earnings, and no income statement forecasts (aside from a couple line items from your DCF)

Not to be harsh, but $100 is a lot of money, and I would want to make sure what I was paying for was credible.

Jun 13, 2017
cob5:

Hey there,

What's your background? I ask because some of the things in those reports don't look like typical things in equity research. For example, the multiples there should be FY1 or FY2, not LTM. There also isn't enough discussion on earnings, and no income statement forecasts (aside from a couple line items from your DCF)

Not to be harsh, but $100 is a lot of money, and I would want to make sure what I was paying for was credible.

Can you clarify your LTM point? From my understanding/knowledge LTM or TTM should be used for comps models and multiples whereas fiscal year projections are for DCF model projections. A link/resource would be great.

Financial statement projections are linked to pro forma models while ours are pro rata models. Pro rata models are much better suited to learn the ropes of financial models before tackling more complex pro forma models. Our models follow the structure and guidelines laid out by Wiley Finance.

The program more closely models buy-side work. We focus on determining whether a target company presents a strong buy/sell opportunity as a function of free cash flow, business model, macro factors etc. Earnings forecasts are more tied to sell side analyst and quarterly projections.

No offense taken btw. I'm always open to honest feedback.

I am interested on the perception that $100 is a lot of money. This is the lowest price point I can have without making the program essentially free. Programs in this space are typically $1000+ and some are much worse IMO (Like Investment Banking Insititute - do not purchase for their program)

Jun 13, 2017

As a student, I'm either going to find something for free via videos/templates/training/pirating or go with a better established program. Those reports also aren't that great from others I've looked at from similar templates/training.

Jun 13, 2017
The Real Max:

As a student, I'm either going to find something for free via videos/templates/training/pirating or go with a better established program. Those reports also aren't that great from others I've looked at from similar templates/training.

Thanks for the feedback. Can you list the templates/training programs you are comparing them to? This will help me determine the gap between our product and theirs relative to our price points.

Also, do you find any value in that we pay for analysis/research that is submitted. Individuals in our program submit their work for review/feedback and if any of the recommendations are actionable (i.e. we put money from our fund behind their recommendation) then we pay the individual $100. So, you have the opportunity to make back the cost of the program and you have the opportunity to make money while you learn if we like more than 1 of your recommendations.

Jun 13, 2017

Without forecasts of the income statement and balance sheet, this report is not useful.

Company analysis and macroeconomic analysis do not provide forecasted numbers, most of the information provided is available for free. There's little info on market share.

Missing space between Cost of Revenue & parenthesis.

Incoming Ash Ketchum, Pokemon Master
Literally a problem, solve for both X and Y, please and thank you.
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Jun 13, 2017
Red3:

Without forecasts of the income statement and balance sheet, this report is not useful.

Company analysis and macroeconomic analysis do not provide forecasted numbers, most of the information provided is available for free. There's little info on market share.

Missing space between Cost of Revenue & parenthesis.

Again, I think this speaks to the distinction between pro rata and pro forma models. I built the program on pro rata models since it is designed for anyone to be able to pick up and learn the basics of financial modeling and research. Pro Rata models project the income statement until the EBIT line but the key projection is free cash flow since this is used to determine the implied share price for the target.

With that said, if the main issue is financial statement projection then I can add that content/training to the program but then the learning curve is much much steeper. Right now, I'd rather individuals understand the core concepts and functions of the models before moving onto pro forma models. Building out financial statement projections is much easier once you have a strong grasp of the basics.

But, maybe you can clarify the emphasis on the income statement projection. If you are forecasting EPS as a sell-side analyst then that makes sense. But if you're a buy-side analyst and trying to determine the ISP of a target then you project free cash flow not income statements. Pro Forma or financial statement projections are more relevant for companies that can't be priced based on free cash flow such as financial companies.

Jun 13, 2017

I think a significant portion, if you're talking about ER, should be focused on development of writing skills...I think that's usually the toughest part of the job - getting in sync with your analyst's writing style while being able to convey succinct, insightful research analysis.

Jun 13, 2017

To me it seems like your focus is more on modeling statements and getting a DCF done rather than teaching someone how to complete an in-depth research process...which is what a research program should be about. Especially a paid one. There is much more that goes into an investment idea than a DCF and commenting about its outputs. It also seems like the main incentive for you is to generate low-cost investment ideas for your fund. I don't know if you're really offering anything someone couldn't learn for free on their own time. What's your background? Upgrade Capital's value investing mentorship is free, and is much superior to what you're offering.

Jun 13, 2017

@Stryfe"

So the focus of the program isn't simply on DCF modeling. While it is important to complete our financial models correctly the greater emphasis is in identifying alpha opportunity. Our training discusses the importance of asymmetry, scenario analysis, risk/reward, SWOT analysis etc. Models are simply a tool that enable you to determine an implied share price for a stock. However, models are useless without an understanding of risk, business models and macroeconomic factors.

The main incentive is not to generate low-cost investment ideas. In all honesty, very few (if any) ideas are ever actionable. I can generate more actionable recommendations from my own research with a much lower time commitment than running the program. I launched the program for educational purposes and I think the price point (as well as reward for submission) speaks to it. I am a huge believe in pragmatic and practical learning (i.e. learning through real-world application) and that is how our program is designed. Individuals who have completed our program found the real-world focus very rewarding and they learned a lot more from our process versus the traditional seminar/webinar/text approach. You can read the testimonials on our site for their thoughts.

I took a look at the Upgrade Capital site and it appears to be a competition model. Students compete against each other by submitting trade ideas or managing a virtual (I assume) portfolio. Some of these ideas are then passed onto hedge fund partners. I didn't see any mention of training or monetary rewards. Maybe you can clarify the program in more detail but I think these are two different models; a competition model versus an educational model

So my background is not typical to finance. I didn't mention it on the site as I wanted to focus on the program itself but I can provide a brief insight here. I did an undergrad in Science (psychology) and then switched from the medical field to finance. I have competed globally in financial modeling competitions and placed in the top 20%. I also generate sell-side research independently (via Quadrant Skew Capital) and distribute it to hedge funds. I'm currently working on a deal with a large US hedge fund and smaller Canadian funds for one of my sell-side ideas. Obviously cannot disclose any names due to NDA and confidentiality. With that said, I will be the first to admit that there are plenty of programs fronted or started by people with a more developed finance background than I. However, based on the feedback from people who have completed the program they find it very rewarding/education and enjoy the real-world learning process. So I think the program is competitive at our price point. If we were priced at $1000+ or were not a startup then I would understand the comparison with more established programs (like Breaking Into Wall Street which I highly recommend to anyone).

Anyway that's my insight to your queries.

Jun 13, 2017

Just a quick wrap-up of the points raised so far. Here are my questions to readers:

  • The cost of the program is $100 (CAD) for 1 year which equals about $6.60 USD monthly. Given the price point -- is the market comparing the quality of the program on par with programs that cost over $1000 USD (like BIWS)? Shouldn't there be elasticity of demand/price here where a perceived lower quality should be acceptable given a corresponding decrease in price?
  • Another concern is that the offerings of the program may be available for free (i.e. the product offered is not differentiated enough to offer any value worht paying for). Does the market not perceive any value in the program offering a framework for real-world application, along with resources and a monetary reward (i.e. minimum $100 for selected ideas)? We are going to increase the monetary reward as the program grows. So at what reward would a $100 annual cost be easily justified/accepted? $500? $1,000?
  • There seems to be concerns regarding what the program itself offers. This appears to be chalked up to simple misunderstanding or lack of awareness on the program itself. However, the write-up on the site (Under our EQUITY RESEARCH PROGRAM tab) should answer/clarify these concerns? Have you read the write-up or were you simply looking at the end-product (i.e. sample equity research reports) and forming an opinion?
Jun 13, 2017
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