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Peer group and relative valuation
A P/E ratio means nothing until you know who it's being compared to. Here's how to build a peer group that holds up, and what to do when a company doesn't have a clean one.
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AppLovin: Falling Knife or Deep Value Play?
AppLovin's stock fell nearly half in three separate stages even as growth and margins stayed strong, while a separate, unresolved SEC investigation questions the very measurement transparency the business is built on. Is this a business the market mispriced, or one still finding its bottom?
You don't need a Bloomberg terminal: free tools for finding a company's numbers
Every number we use comes from somewhere. Here's exactly where to find it yourself, for free, without a Bloomberg terminal or a paid research subscription.
Understanding the discounted cash flow (DCF) method
A DCF does not predict the future, it makes your assumptions about a company's future cash flows explicit enough to question. Here is how the standard method, terminal value and all, fits together.
New tool: DCF Calculator
A free discounted cash flow calculator, project free cash flow and get a fair value per share.
Palantir, a lesson in narrative investing
Palantir's price surged about 29% after a Q2 earnings report that came in much stronger than expected and raised full-year guidance. Yet the stock still trades at nearly 140 times earnings, a steep premium to the rest of its sector. What is that price paying for?
Poker, Not Roulette: Why New Investors Should Start Small
You just read deep-dives on two very different companies. Here's the lesson underneath both: no story is ever certain, which is why new investors should start small.
Micron, a lesson in growth investing
Micron's stock is up roughly 650% over the last year, driven by AI memory demand. Is this a structural shift or a bubble waiting to burst?
Adobe, a lesson in value investing
Adobe's stock has fallen 70% from its 2021 high while revenue and margins stay strong. The market is betting AI will erode its moat. Is that bet right?
Going deeper with ratios
Beyond the four foundational ratio categories, there are three more that experienced investors use to assess how efficiently a company deploys its capital, uses its assets, and rewards its shareholders.
The four types of ratios
Ratios fall into four categories, each answering a different question about a company. Knowing which category a ratio belongs to tells you what it is measuring, and what it cannot tell you.
Understanding ratios
Margins tell you how profitable a company is. Ratios go one step further and tell you whether the stock price reflects that profitability fairly, generously, or not at all.
Investing in the S&P500
Everybody buys the S&P 500 as a way to diversify across the US market. But a handful of companies now account for more of the index than most investors realize.
Understanding margins
The same income statement looks completely different depending on the size of the company. Margins strip away size and let you compare any two companies, or a company against its own past, on equal footing.
New tool: Cash Flow Statement
An interactive walkthrough of the cash flow statement, line by line.
New tool: Balance Sheet
An interactive walkthrough of the balance sheet, line by line.
Understanding financial statements
Every listed company publishes three core financial statements. Together they tell the full story of a company's financial health, if you know how to read them.
New tool: Income Statement
An interactive walkthrough of the income statement, line by line.