When I started on Wall Street in the early 1980s, I quickly realized something strange…
The guys making the most money weren’t the ones with PhDs in finance or the most complicated spreadsheets.
I met money managers with outstanding track records who never even took a business course in college. Some of them had advanced degrees in history, philosophy, and anthropology!
What they all shared…They were the ones with the most common sense.
Investing is actually simple. But because it looks analytical — full of numbers, ratios, models, and jargon — a lot of people make it more complex than it needs to be.
They fall in love with the tools and forget what really matters.
Let me share something with you that I’ve learned after four decades in this business:
The best valuation tool isn’t a spreadsheet. It’s thinking like an owner.
A powerful reminder that great investing starts with thinking like an owner, not a spreadsheet jockey.
If you own a business — not just for a trade, but for the rest of your life — how would you think about what it’s worth? Would you focus on whether its price-to-earnings ratio is 13 or 15?
Would you spend hours adjusting the discount rate on a discounted cash flow (DCF) model to the third decimal place? Of course not.
Instead, you’d ask:
Does the business generate stable, predictable earnings year after year?
What long-term risks could impact the business?
Does management make smart decisions to increase shareholder value?
That’s how real investors think.
It’s how Warren Buffett thinks. And it’s how I want you to think, too.
Forget the Spreadsheets
You don’t need to be a Chartered Financial Analyst or an MBA to be a great investor.
You just need to understand the business you’re buying into.
Real Talk: If you don’t understand the business, no valuation tool will help you.
You can change the terminal growth rate… tweak the margins… move around the cash flow assumptions — and get a completely different answer.
That’s why even seasoned Wall Street analysts can come to wildly different conclusions on the same stock. They’re playing with the dials to fit a narrative.
But if you understand the business, how it makes money, its competitive advantages, and what drives growth, then valuation becomes obvious.
The numbers will speak for themselves — no fancy spreadsheets needed.
In fact, the less you know about DCFs, the better. Because when you do, it’s easy to tweak the math until it justifies any price.
That’s when investors get into trouble. That’s the last boundary, because the easiest person to fool is yourself.
But if you keep things simple — if you value a business like you’re buying the whole thing with your own hard-earned money — you’ll avoid that trap.
So, what’s the takeaway?
Focus on understanding the business, not the model.
When a business has strong, reliable earnings… needs little capital to grow… holds pricing power with a long runway ahead… and you can buy it at a fair price — that’s a great investment.
You don’t need to outsmart Wall Street — just stay honest with yourself.
That’s the kind of thinking that helped us invest in companies like Marvell Technology, Interactive Brokers, and Alphabet — even when Wall Street was panicking.
And it’s the kind of thinking that’ll keep working for you… year after year.
If you have questions, you can send them to me at [email protected].
And follow me on X here for daily updates.
Regards,
Charles Mizrahi
Prosperity Insider
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