Well, people always ask me, how do I

find great investment opportunities in

today's market? Now, remember that

whatever the market is, the index, even

at all-time highs, there are great

companies selling at reasonable prices

or at discounts. There are

opportunities. You just have to know how

to, you know, find them and drill into

them. So, we're going to show you how I

look for great stock ideas every single

day. And I'm going to show you how I do

it with a Stock Oracle, which I think

most of you have subscribed for. And

there's there's a few ways you can do

it. The first thing you can do is

uh you go to what we call the Value

Radar. And this shows you a whole heat

map of the S&P 500,

the US market. So, this are all the 500

companies, and you can always look at

them based on their discount or premium

to intrinsic value, and how they have

done for the last 1 day, the last 1

week, the last 1 month, the last 3

months,

so and so forth, right? So, for example,

if you take a look at year-to-date, all

right? Year-to-date, um where

which have been the best performers

year-to-date? So, you can see straight

away, best performance would be Apple.

Apple's up 24% this year, Microsoft's

down 18% this year, Google up 7% this

year, Amazon down 1% this year, JP

Morgan up 8%, so and so forth.

But, this is not really useful. It tells

us how it performed in the past. Who

cares about the past? We want to know

how it's going to perform in the future,

right? So, um let me go to this here

that tells me which ones are uh

overvalued at a premium and which are

undervalued at a discount, okay? So, uh

when you see

a minus means discount to intrinsic

value, and plus means above intrinsic

value. And of course, discount would be

more green,

and overvalued would be more red when I

look at this. So, straight away when I

look at the whole market, where do I see

some undervalued companies? Again,

I don't just

buy stocks because they're cheap,

because cheap crap is still crap. They

must be high quality, then I look for

valuation. So, quality is always the

priority. The valuation is always

secondary, okay? So, straight away,

which stocks stand out that are

undervalued, that are of high quality?

And you've got Nvidia. Nvidia is 10%

below intrinsic value.

Microsoft, 18% below intrinsic value,

even with yesterday's pop, you know?

Meta, 40% undervalued.

Where else? Now, some of these are quite

small. So, what you could do is you can

actually zoom in to a particular sector.

For example, if I just click on

technology, you can see these are all

the technology stocks. Now, for example,

you can see Micron is 57% overvalued.

Now, some people they don't understand,

they say, "How can it be? Micron the PE

ratio is so low. How can it be

overvalued?" They don't understand,

right? So, maybe I'll talk a bit about

this, because this is a very common

question that I get. How can Micron be

so overvalued? So, let me explain. Now,

first of all, understand that PE ratio

doesn't work for all kinds of companies,

okay? They only work for certain kind of

companies, and Micron is one of those

companies which are what we call very

cyclical. Now, what does cyclical mean?

Cyclical means their profits

historically don't go up consistently.

Their profits go up a lot, they go down,

go up, so it's very, very cyclical. So,

for example, let's look at their

financials. So, we're going to click on

financials, and you can see what I'm

talking about.

Um

there we are, right? So, take a look at

the uh net

income.

Now, remember how is PE ratio

calculated?

PE is the share price today

divided by the earnings per share.

Earnings per share comes from the net

profit divided by number of shares.

So, Micron is a company where look at

the profit. It it goes up, it goes down,

it goes up, it goes down all the way,

goes up, all right? So, you can see it's

very cyclical. Now, it's here because

there's a big demand for their memory

chips and because of lack of supply, the

prices are very high.

Now, the question is is this

sustainable?

So, some people say that Micron is no

longer cyclical, that for the rest of

the future, it will keep going up.

Now, if that is true, then yes, Micron

is very cheap right now. Very cheap, if

if that's true.

But,

if it turns out that memory is actually

cyclical, then this will not last, which

means once the oversupply, or rather the

undersupply is over and there's an

oversupply, and memory chip prices go

down, what's going to happen to this

profit? This profit is going to drop

back down

to here

as it has been

since its history, okay?

And the problem with cyclical stocks is

when the profits are very high. Like

now, the profits are very high. When

this becomes very high, what happens to

the PE? The PE becomes very very low.

Okay? So, if you look at Micron today,

what's the PE? The PE ratio is

um

you can see the forward PE is 5.6.

So, people think, "My god, that is

really really cheap, right?"

But, again, the problem is that because

the earnings are so high, it causes us

PE to drop to 5.6 forward P/E. So, that

looks cheap,

but it's an illusion.

Because these this profit is not

sustainable. So, once this profit if the

profit drops, this goes down the P/E

from 5.6 would shoot up back to like 30

P/E.

You get the point? So, you got to be

very careful about these situations.

Now, again, um

the question again with Micron is this,

is are the earnings going to be

sustainable? Are they going to keep

going up for the next 10 years? Or are

they going to come back down again?

Honestly, I don't know. I really don't

know. And people are divided because

they're not sure how sustainable

are these memory chip demand and and

prices. So, for me, very simple, when

I'm not sure of something, I don't dare

to invest in. I stay away. But, it

doesn't mean I cannot make money from

it. Can I make Can I still make money on

Micron? Yes, but not as an investment,

but as a short-term trade. And there's a

big difference because in trading, I

don't care about fundamentals. In

trading, I don't care about uh intrinsic

value. In trading, I just look at a

price action. I enter based on a price

action.

I put a stop-loss because in trading,

it's like a one-night stand. In a

one-night stand, you need protection.

And there's a profit target. Whereas

investing, I don't have any stop-loss

because I know that it's undervalued.

You get the point? So, having said that,

interestingly, would I buy Micron? Yes,

I would as a trade, but as an

investment, it's too uncertain. And I

can't tell you that it is

undervalued because of this cyclicality,

okay?

Uh for example, if you look at the

intrinsic value over here,

you can see the way you calculate

intrinsic value

can have a wide variation. So, if you

use a discounted free cash flow model

and you believe the cash flow will

continue to grow, then yeah, Micron is

worth 249,000,

right? So, that is one extreme.

But, if you say no, it's cyclical, the

profits will drop back down, then Micron

will be worth its mean PE

uh without non-recurring income, it'll

be worth about 500 bucks, okay? So, the

Oracle value takes the more conservative

stance. And that's why the Oracle value

is 556,

which is based on the mean PE ratio, and

not based on this $200,000

that assumes that memory chips will go

up forever, all right? And that's why

based on

>> [snorts]

>> 556,

uh it is actually 57% overvalued. All

right, so again, having said that,

uh

I could still make money on Micron, but

as a trade, not an investment. So, how

would I trade Micron for example?

Okay, so if I look at Micron over here,

purely based on price action, you can

see that this is a valid trade setup,

because you can see this is what we call

a double bottom pattern, or a bear trap,

okay? So, it made a swing low, made a

lower swing low, and it closed with a

bullish candle above that swing low.

It breached the lower Bollinger bands

over there,

and the stochastics went into oversold

condition. So, based on this, there's a

probability

that the price would go up.

All right, again, this is a trade, not

an investment, because in trading,

overvalued can become even more

overvalued, right? So, we don't care

about valuation for trading. But if I

enter the trade, what would I do? I will

buy

uh here. In fact, I would have

Yeah, I could enter right there when the

market opens on Monday.

Oh, sorry, opens today on Friday, all

right? I put a stop loss here, below the

swing low. So, this is my risk, my 1R

risk, and then I will

uh take profit at about 2R, somewhere

there,

uh when it exceeds the previous high,

all right? So, again, this is a trade,

not an investment.

So, there are many stocks like like I

keep teaching my students. I say that in

the whole market

in the whole market

less than 1% of stocks

are investable.

Okay? Less than 1% are

investable. I don't know why my pen is

not writing very well, but investable.

So, these are stocks where it's very

easy to value because the earnings, the

profits are very predictable. They're

very They are compounders.

And I only invest in the 1%, okay? 99%

of stocks

are not investable. Not investable.

Because they're not that predictable and

they're very hard to value. Like

companies like SpaceX or Micron, you

know, to me these are the 99%. Not

investable, but tradeable. Can still

make a lot of money on that, but as a

one-night stand with protection and not

a long-term investment. So, that that's

the main difference between trading and

investing.

Now, on the other hand, a company like,

let's say

um

uh

Mastercard, for example. Okay? So, you

can see the difference, right? So, you

saw that Micron, the profit goes up,

goes down, goes up, goes down. That we

call that a cyclical company. All right?

Very unpredictable in the future. No one

knows what what the hell's going to

happen, right? But if you look at a

company like Mastercard, you and you

look at the financials, you can see it

is not cyclical a cyclical. Because you

can see that the profits, they

go up consistently, right? They do drop

from time to time, but generally they're

compounding upwards. So, for these kind

of stocks

yeah, it it's more investable. You you

you get the big difference there, yeah?

So, if you're wondering again, why is

Micron over priced when a P is at five,

that's the reason why, okay? So, anyway,

let's go back to our value radar.

And

yeah, so what I showed you was we click

on technology.

And you can see again what are the

undervalued technology stocks. You have

got got a Microsoft, you got Nvidia, all

right? You got Oracle, for example, but

again,

you know, I I don't just buy them

because they're undervalued.

Like Oracle is 44% undervalued, but I

wouldn't buy Oracle. I wouldn't buy

Oracle. Why wouldn't I buy Oracle?

Because

when I look at the fundamentals,

there are things that scare me. And the

main thing that scares me about Oracle

is that the debt levels are quite high.

So, for example, if I click on company

metrics over here,

and I look at the

debt ratios,

you can see that yeah, current ratio is

fine. That's like above one, okay? But

you can see debt to EBITDA ratio, this

is scary to me because their debt to

EBITDA is 4.32.

And that is very scary because to me

anytime the debt to EBITDA is more than

three, it's too dangerous for me. It's

too over leveraged. So, straight away,

fail. I avoid [snorts] I don't I don't

care how cheap it is, I avoid companies

where the debt is scary. And by the way,

if you scroll down, you can also see

in the S&P 500, you can see these are

the stocks that are very undervalued.

You click on that and they all appear

over there. Stocks that are undervalued,

click on that, they appear over here.

And in this case, the color coding here

refers to whether it's a wide moat

company. A wide is green, which means

it's got a very strong durable

competitive advantage that will protect

it from competition very much. So,

narrow moat means uh some

competitive advantages, and no moat

means that

you know, they can do very well in the

short term. Profits can go up a lot, but

long run, they can easily be uh

disrupted by competition, or they don't

have much pricing power over the long

run. That's called no moat. So, again,

for no moat companies, I will never

invest in them, but I may trade them

short term. Because short term, they can

go up a lot, but long run, it's more

uh vulnerable uh to pricing pressure or

competitive pressures, all right? And

then, these are stocks stocks that are

fairly priced over there, stocks that

are overvalued over here, and stocks

that are very overvalued over there.

So, if I click on very undervalued

again,

these are some examples you see. You see

examples like Core Part, uh Tesco, Meta,

uh Nike, ServiceNow,

uh FICO, Zoetis, and and so on and so

forth, okay? So, some of you have been

asking me about Meta. What do I think

about Meta? Uh Meta recently announced

earnings. I think earnings were very

good, but the stock dropped 9%, you

know? So, is it an opportunity, or is it

something to stay away from? Well, let's

take a closer look. So, if we click on

Meta,

uh we can see again how the stock ranks

very fast using this thing called the

Oracle IQ.

Where in terms of predictability, how

predictable are the revenue and profits?

It is very predictable. High rank high.

How about profitability? How profitable

is it? Rank high. How about growth?

Growth is medium growth. Not super high

growth, medium growth. Moat, strength of

the economic moat, very wide moat.

Financial strength, very strong

financial strength. Valuation

is high, which means it is very

undervalued. So, straight away, it gives

me a very good analysis of of the

company. [snorts]

Now, some people have asked me, "But

Adam, you know, Amazon and Meta and

Google and Microsoft and so and so

forth, they're taking on so much debt.

Their debt is so high. Aren't you scared

about all the debt?" Now, again, you

cannot look at a debt

in isolation.

You have to compare the debt

with their earnings. Okay? So, as long

as they earn a lot, they've got very

strong cash flow, and they can easily

service the debt, the company can be

very, very strong financially. So,

again, what are the ratios I look at?

Let's look at the same ratios

which I showed you just now. If I go to

company metrics,

and [snorts] let's look at Meta.

Um

and I go to debt ratio. So, for Meta,

you can see what's the current ratio.

Current ratio means the current assets

divided by current liabilities. That is

uh 2.23.

Very safe.

They've got double the current assets

versus their current liabilities. Debt

servicing ratio, zero. Very safe.

As long as the debt servicing ratio is

below 30%, safe.

What's debt servicing ratio? It is the

interest expenses, how much interest

they pay,

divided by the cash flow from

operations. Okay?

Next, interest coverage ratio should be

at least three or five or more.

Theirs is 70s. Insane. Okay? Debt to

EBITDA ratio, like I mentioned, three or

less. Their debt to EBITDA is 0.75.

What does that mean? That means they can

pay off all their debt

in 0.75 years.

So, even though you see in the headlines

in the media, "Oh, Meta is taking on so

much debt," but if you look at the

ratios, you find that it's nothing,

right? They are financially very, very

strong. Look at the ratios, look at the

numbers, don't look at the headlines and

the media

distortion, yeah? Now, the other concern

that people have with Google and Meta

and Microsoft is that recently their

free cash flow, some of them have

dropped and turned negative. People say,

"Aren't you concerned about that?" Mhm,

no. And I'll I'll tell you why, okay?

Now, if a company's free cash flow drops

and turns negative because the business

is not doing well, because revenue

dropped, cash from operations dropped,

then of course that is bad. Run away,

stay away, sell, cut loss, okay?

But, if the company's revenue is

growing, their cash flow from operations

is growing,

but free cash flow goes negative, that's

fine

because of temporary increase in CapEx,

capital expenditures, especially growth

CapEx, where they are investing for the

future. So, for example, let's take a

look at their financials.

Let's look at their financials again.

And see what I'm talking about. So, for

Meta,

you can see their revenues are growing

very consistently.

So, they're growing their their top line

revenue, that's very important. Their

net income,

you can see also growing very

consistently, yeah? Their operating cash

flow, how much cash they generate from

the business, that is also growing very

consistently.

The concern is the free cash flow. You

can see the free cash flow in dark green

uh has dropped here.

It also dropped in 2022, okay? So,

again, what caused the free cash flow to

drop?

Now, remember that, let me write this

down for you, okay? Free cash flow

is the cash flow from operations, which

is this

orange line, minus the capital

expenditure. What they're spending to

build data centers and all that, right?

So, this is going up. But, because this

goes up a lot, it causes this to go

down. Now, this going up is fine as long

as it is growth CAPEX, as long as it's

temporary.

Because

once they've built the CAPEX, then this

will drop.

And then this will explode higher. And

lead to more free cash flow in the

future because of their uh investment

today, yeah. So, that's not something

I'm concerned about at all.

So, how would I value Meta? So, again,

click on intrinsic value.

And you can see that if you value Meta

on the recent free cash flow that has

dropped, then Meta is worth 557.

And it's currently selling at 539.

Which means that even if you account for

the drop in free cash flow,

it is selling

uh below the intrinsic value of 557,

all right? But, like I said,

I will not take the recent free cash

flow.

Because the CAPEX has gone up

temporarily. So, I would use a more

normalized free cash flow. If you use a

more normalized free cash flow, then

your intrinsic value should be somewhere

close to $900.

So, the Oracle value, what it does is it

normalizes the free cash flow if there's

a sudden jump in the CAPEX. It

normalizes it, okay? So, that's how it

works. It uses an AI machine learning

algorithm to do that, yeah? So, that's

that's Meta Platforms over there.

Now, so this is one way to get great

ideas. Another way is to use the value

radar.

Oh, sorry, not the value radar. I showed

you that. It's is a screener, the stock

screener.

So, the stock screener is something

where those of you who are

who kind of like, you know, you know

what metrics you're looking for,

parameters you're looking for. Uh there

are all kinds of 400 metrics where you

can put in exactly the stock you want to

find.

Okay, so let me give you an example.

Let's say you say, "Okay,

I only want companies that have got

um

a wide moat, a wide economic moat, okay?

So, click on moat here and say I want

the moat score,

which is between 1 to 10. I want a moat

score

of at least, you know, 7 to

10.

Okay?

So, that is the first filter. What else

do you want? Um

Now, you can also click on AI moat and

just say I want a

wide moat companies, for example. I want

wide and narrow. It's up to you. But

let's say you just want to look at a

wide moat companies, companies that are

the most monopolistic, the the the

strongest competitive advantage. What

else? Uh you can then look at, uh for

example, um

Oracle IQ,

where you say, "I want companies where

the financial strength

is at least high to medium financial

strength." For example, I want companies

where their profits and revenue are

very predictable, high predictability,

high and medium, or just high. It's up

to you. It's how strict you want to be.

I want companies that are very

profitable, where the profit

profitability rank is very high, for

example.

Uh I want companies that have got growth

uh high and medium.

Whatever you want. So, this is like a la

carte, all right? You put in whatever

things that you want. You can be very

specific and say that, uh in terms of

valuation,

I want companies that

um

where the price to Oracle value, let's

look for them. What price to Oracle

value

Yeah, price to Oracle value is

uh low.

It's uh let's say below one.

So, what does this mean? This means that

you want the price to be lower than the

intrinsic value. So, zero to one, right?

More than one means it is overvalued,

for example. You can also put in your

own like, you know, PE ratio, price to

book, rule of 40, whatever you want,

right?

Uh what else? You know, you can put in

financial metrics if you want, you know,

whatever you want. It's all all here,

okay?

And then once you run the scan,

there you go. So, all the stocks will

appear

that fit

these criterias. And you can sort them

out. You can say, let me sort them out

by

uh

price to Oracle value over here. So, the

most

uh undervalued

to the most overvalued here.

Okay? I can sort it by growth.

So, the highest growth

would be Eli Lilly.

And then second highest Nvidia. Third

would be Broadcom. And then uh you have

got AS

MIY. ASM International. It's not ASML.

It's a different company, right? Uh

AIPUY. This Airports of Thailand. All

right, so some foreign companies are in

there, you know, right? So, this is ala

carte. Now, there's also kind of like uh

set dinner. All right, set lunch. Where

you go to

uh screener, go to screening ideas.

You say, I don't want ala carte. I want

you to tell me

um some set meals. And you said, okay, I

want to invest in

uh high-quality compounding companies.

These are top tier white mode businesses

with high historical profitability and

consistent growth metrics. So, run the

scan.

And there we are. It's all here, right?

And you you going to get you can sort it

by um, you can sort it by growth.

And again, you get the same list, right?

Eli Lilly, Nvidia, you got um,

Anyang Pharmaceutical, Google, Broadcom,

Palantir, Airbnb, Microsoft, ResMed,

Hershey's, and so and so forth. Okay?

Um,

and some of you may say, "I want to only

focus on

uh, speculative growth stocks." Then,

run the scan. "I only want to focus on

defensive recession-proof companies."

Run the scan. "I want to focus on fallen

angels, companies that have uh, who are

great, but have dropped because of

temporary problems." Uh, "I want to scan

companies that Peter Lynch would buy."

"I want to scan companies that Warren

Buffett would buy based on their

philosophy, based on their rules." It

would find you these companies. So, once

you get that investment idea, or once I

get that investment idea, I would then

look at the charts to look for optimal

entry and uh, exit points. So, for

example, to me, Meta is one of the

highest conviction opportunities I see

in the market today. Now, uh,

disclaimer, I already own a lot of Meta,

which I bought years ago at very low

prices, but I've been still adding a bit

more because I think that uh, yeah,

yeah, it's it's a pretty good risk to

reward here. I'm not recommending you

buy. I'm just sharing this with you for

educational purposes, to share my

thought process. So, if you look at

Meta, for example, again, the intrinsic

value is um,

uh, $900. Right now, selling at 539, so

significantly undervalued. And you can

see the price action, right? Wave up,

wave down, wave up, wave down, wave up,

wave down, wave up, wave down, wave up,

wave down. So, it's more or less been

trading in this range, right? It's more

or less in this range.

And then, yesterday it dropped to this

support level there.

532 support level. And but it's not

really yet oversold on the stochastics,

but that's not too important in

investing, right? We're more interested

in undervalued at a support level.

Nothing wrong for me to add more at the

support level. Of course, no guarantee

it cannot go lower. It can, all right?

In the short term, we can't always

predict manipulation or sentiment. But

more or less, if we, or rather if I

add at these support levels, I've got a

pretty good risk-reward because

eventually

it will rebound higher. Whether it's

from here or lower down, it will rebound

higher. All right? So, I hope this has

been useful to show you that, yeah, in

any market, there are great companies,

and this tool can help you to find them

a lot faster. Thank you for watching,

and may the markets be with you.