Yield Theory
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Learning library

Fundamental research, from the ground up

Read the business. Work the numbers. Challenge the valuation.

40 chapters · 12 modules · 12+ hours

Try the first chapter freeSee the curriculum

Visual field notes · Worked example

A better business can still be a worse investment

Dollars per share. Hypothetical teaching data, not a forecast or market history.

Earnings per share

$1.00

Start

Multiple investors pay

30×

Start

Share price

$30.00

Start

Price at year 0Earnings growthMultiple changePrice at year 0
Press play or pick a year to see what moves the price.
Step 1 of 3

Separate the two engines

Start with a business earning $1 per share and a stock trading at $30. Earnings grow 10% each year, reaching $1.331 in year three. The green bar shows what that growth alone would add if investors kept paying 30×: $9.93 a share. It answers a business question: is each share earning more? It does not yet tell you what an investor receives.

View the chart data
Dollars per share
Period / categoryEarnings per shareMultiple investors payShare price
Year 013030
Year 11.12729.7
Year 21.212429.04
Year 31.332127.95

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Your curriculum

Foundations

Module 1

Foundations

What a share is, how the market prices it, and where returns come from.

  1. 01Think like an owner23 min · Free sample
  2. 02How the stock market actually works23 min · Members
  3. 03Where stock returns come from22 min · Members
Finding the evidence

Module 2

Finding the evidence

Map the industry, find the filings, and keep an honest evidence ledger.

  1. 04Map an industry and its business models22 min · Members
  2. 05Find the evidence in US filings22 min · Members
  3. 06Build an evidence ledger22 min · Members
The income statement

Module 3

The income statement

Follow revenue to profit, and see which business lines earn it.

  1. 07Follow the dollar through the business22 min · Members
  2. 08Revenue is not a bank deposit22 min · Members
  3. 09Read segment reporting22 min · Members
Balance sheet and cash

Module 4

Balance sheet and cash

See what the company owns, owes, and how cash really moves.

  1. 10Check whether the earnings become cash22 min · Members
  2. 11Read the cash-flow statement23 min · Members
  3. 12The cash conversion cycle22 min · Members
Quality and obligations

Module 5

Quality and obligations

Test whether earnings are real and what the company owes.

  1. 13Test the quality of earnings23 min · Members
  2. 14Read the debt before the upside22 min · Members
  3. 15Leases and obligations outside the debt line23 min · Members
Business economics

Module 6

Business economics

Measure what one customer is worth and whether the business earns its keep.

  1. 16Make one customer profitable23 min · Members
  2. 17Recurring revenue and customer retention23 min · Members
  3. 18Pricing power and inflation22 min · Members
  4. 19Judge the business and its stewards25 min · Members
Moats and management

Module 7

Moats and management

Judge how durable the advantage is and who is steering it.

  1. 20Put the moat on trial22 min · Members
  2. 21Management, incentives and the proxy statement22 min · Members
Capital allocation and shares

Module 8

Capital allocation and shares

Follow where the cash goes and what happens to your share of it.

  1. 22Where should the next dollar go?22 min · Members
  2. 23Acquisitions, goodwill and write-downs22 min · Members
  3. 24Think in value per share22 min · Members
  4. 25Stock-based compensation, explained22 min · Members
Valuation basics

Module 9

Valuation basics

Read what a price assumes, and learn time value, multiples and the cost of capital.

  1. 26Put a price on the expectations22 min · Members
  2. 27Time value of money and compounding22 min · Members
  3. 28Normalize before you compare23 min · Members
  4. 29Cost of capital, explained22 min · Members
Valuation models

Module 10

Valuation models

Build a DCF, reverse it, and size the risk before you trust it.

  1. 30Build a DCF from operating drivers22 min · Members
  2. 31What is the price already assuming?23 min · Members
  3. 32Make room for being wrong23 min · Members
  4. 33Margin of safety and expected return23 min · Members
Following the business

Module 11

Following the business

Read cycles, earnings releases and calls, and keep the thesis current.

  1. 34Research a business through the cycle25 min · Members
  2. 35Read an earnings release like a researcher22 min · Members
  3. 36Read an earnings call and guidance22 min · Members
  4. 37Know what would change your mind22 min · Members
Decisions and the memo

Module 12

Decisions and the memo

Size the position, write the memo, and run the whole process once.

  1. 38Position sizing and building a portfolio22 min · Members
  2. 39Write a decision you can revisit22 min · Members
  3. 40Capstone: a full Harbor teardown28 min · Members