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Finance for MBA in 18 Short Videos: SUMMARY for Bitcoiners

Note: This is financial education and information, not financial advice.

To help all of us better understand the financial side of Bitcoin investing, the videos below easily summarize the basics you would learn in a finance class of a ‘mainstream’ MBA. Taken from my other finance tutorials site MBAbull.com (formerly MBAbullshit.com) and famous finance tutorials Youtube channel with 120,000 subscribers and 15 million video views.

Financial Ratio Analysis or also known as Financial Statement Analysis using ratios is a quick technique used to assess overall company health and or to compare it to other companies. Wanna learn deeper? No worries, watch my other free videos from my other site MBAbull.com.

The value of money depends not just on the amount, but on WHEN it is given. If I give you $100 today, you can make it grow to $101 next year because of bank interest… that is called future value.  Another way of saying that is… $101 given to you next year has a present value of only $100 today.  When we combine many present values for many different amounts, this is called net present value. Wanna learn deeper? No worries, watch my other free videos from my other site MBAbull.com.

Using the internal rate of return is a great way to compare which businesses or investments earn your more, expressed in percentage terms. I know that can sound like a complicated concept, but watch the video above and you’ll get it in a jiffy! Wanna learn deeper? No worries, watch my other free videos from my other site MBAbull.com.

If you make an investment in anything (whether it’s a business or Bitcoin), you want to know how soon you get back the money you invested.  Using the payback period is one easy way to measure this. Wanna learn deeper? No worries, watch my other free videos from my other site MBAbull.com.

The decision tree analysis is a very good tool to use when trying to make financial decisions. You might use this method to help you decide between Bitcoin and other investments. Wanna learn deeper? Wanna learn deeper? No worries, watch my other free videos from my other site MBAbull.com.

How much is a business or company worth? Would you buy a restaurant for $1,000 if its tables and chairs were bought from the shop for $2,000? Sounds like a good deal, doesn’t it? But what if that restaurant is only profiting $1 per year and you couldn’t sell the tables and chairs easily? Would you still pay $1,000 for that restaurant business?  See the video above to understand the concept of how to value a company or how to value a business based on its earnings. Wanna learn deeper? No worries, watch my other free videos from my other site MBAbull.com.

Here’s a theoretical way on how to value stocks (also known as stock valuation). This same concept can also be used with other investments which may bring “dividend” type earnings (such as security tokens). Wanna learn deeper? No worries, watch my other free videos from my other site MBAbull.com

Here’s a theoretical way on how to value bonds (also known as bond valuation). This same concept can also be used with other investments which may bring FIXED or “interest” type earnings (such as staking tokens). Wanna learn deeper? No worries, watch my other free videos from my other site MBAbull.com.

The riskier the investment, the higher your return should be. Would you be willing to earn a 1% profit from a risky company if a safe bank also pays you 1% interest? Of course not.  The risky company should have the potential to earn you much more than 1%, to compensate you for your risk (same way it’s only fair that you might earn much more from Bitcoin as a volatile or risky investment than from a stable bank deposit).  So how much exactly is the “fair” amount you should earn from an investment, depending on how risky it is? The Capital Asset Pricing Model (also known as CAPM) is a theoretical way to measure this. Wanna learn deeper? No worries, watch my other free videos from my other site MBAbull.com.

If you borrow money from the bank at 10% interest per year to fund your business, your cost of capital is 10%.  On the other hand, if you ask your friend to invest his money in your business and he “expects” a return of around 20%, then your cost of capital is 20%.  But what if you have a business, and part of the capital comes from borrowings and another part of the capital comes from borrowings? The Weighted Average Cost of Capital concept (popularly referred to as WACC) helps you gauge your actual cost of capital when taking into account the different sources of your capital. Wanna learn deeper? No worries, watch my other free videos from my other site MBAbull.com.

In terms of risk to reward ratio, investing or playing with options is often compared to the risk vs. reward of investing in Bitcoin… only that options have an “expiration date” while Bitcoin is forever.  There are two basic types of stock options, namely put options and call options.  See the video above to learn about put options. Wanna learn deeper? No worries, watch my other free videos from my other site MBAbull.com.

In terms of risk to reward ratio, investing or playing with options is often compared to the risk vs. reward of investing in Bitcoin… only that options have an “expiration date” while Bitcoin is forever.  There are two basic types of stock options, namely put options and call options.  See the video above to learn about call options. Wanna learn deeper? No worries, watch my other free videos from my other site MBAbull.com.

While traditional accountants often talk about “profit,” it’s common for financial strategists and investors to think in terms of actual “cash flow.” Meaning, they believe you don’t actually get any “richer” unless you convert your profits (or Bitcoin) into actual fiat cash like US$ dollars. Interestingly, this in a way conflicts with Bitcoiners’ who consider “fiat” cash like $US to be inferior money compared to Bitcoin because the government can print an unlimited supply of dollars.  Still, it’s important for Bitcoiners to understand this concept so that we know the viewpoint of traditional financial managers when they are thinking of investing in Bitcoin. To understand this concept better, let’s watch the video above about cash flow statement and cash flow statement analysis. Wanna learn deeper? No worries, watch my other free videos from my other site MBAbull.com.

When it comes to investing of any type, the concept of “break even” is important.  Did you earn more than you invested within a specified period of time?  In the video above, we learn about break even analysis. Wanna learn deeper? No worries, watch my other free videos from my other site MBAbull.com.

A VERY important concept for any investor or trader, especially in this information age. The Efficient Market Hypothesis helps us understand that the potential to earn good money on an investment is not based only on the good fundamentals of that investment, but on how quickly news about that investment travels among investors, and/or what the other investors “expected.”  You  might think an oil company is a “good investment” because they have newly struck 1 million barrels of oil in the ground… but you can’t earn money on it if everyone already knew about it before you did.  Or, even if you knew about the oil find before everyone else, the stock price of this company will go DOWN if everyone else expected them to find 10 million barrels of oil, but they only found 1 million and so everyone else got disappointed.  This is why it might be very bad to invest in “shitcoins” instead of a truly decentralized currency like Bitcoin BTC, since it’s often only the shitcoin “insiders” who know the news before you do. Wanna learn deeper? No worries, watch my other free videos from my other site MBAbull.com.

Move videos below on finance topics for MBA (optional)...

When you have a business or company, its capital structure and debt policy must be considered. Wanna learn deeper? No worries, watch my other free videos from my other site MBAbull.com.

Another important topic which MBAs should understand.  What is the impact on the profitability of you company when you give dividends?  Here we discuss dividend policy and the concept of Dividend Payout Ratio.  Not very relevant to Bitcoin, but as a Bitcoiner if you want to “know” what MBAs know, you should learn this concept. Wanna learn deeper? No worries, watch my other free videos from my other site MBAbull.com.

You may have heard famous Bitcoiners (and others) complaining that big corporations “scam” the country when they get bailout money and then use a lot of money to “buy back” their own shares of stock in the market, which then “artificially inflates” their own stock prices instead of reinvesting the money into expanding/maintaining the business and creating or maintaining jobs.  In this topic under dividend policy, we look at the impact of share repurchases, also known as stock buybacks, on a company’s and its shareholders’ profitability. Wanna learn deeper? No worries, watch my other free videos from my other site MBAbull.com.

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