CBM TOOLBOX
We want to simplify investing for everyone, especially beginner investors.
Use CBM Toolbox. Analyse numbers. Build a story. Grow your wealth.
Invest like the best, Warren Buffett.
CBM Toolbox will help you check all the 4 pillars of value investing.
Investing = Story + Numbers
Investing is an art, not a science
CBM Toolbox has a balanced scoring system. The final verdict will vary based on your responses.
CBM Toolbox is another step in the investing journey.
This is just the starting point. Build an investing framework. Avoid investing in a business that does NOT pass the checklist. If it does, research more!
LEARN MORE ABOUT TOPICS?
CBM TOOLBOX TUTORIAL
Watch us fill out the CBM Toolbox for a sample business!
CIRCLE OF COMPETENCE
Warren Buffett advises that you should only invest in businesses that you understand.
If a business is not in your circle of competence, it’s not in your circle of competence. It takes a lot of time to expand your circle via osmosis.
You should avoid businesses that are not in your circle of competence and you don’t understand.
MOAT
Warren Buffett says that he likes businesses that are like a strong castle and have a very deep moat around them.
Moat is a competitive advantage that the business has.
There are 5 types of moats: brand, secret, toll bridge, switching, and price.
VALUATION USING MULTIPLES
We look at Price/Earnings, Price/Sales, and Price/Free Cash Flow ratios for the past 5 years.
The ratios are a good way to see how the business is doing compared to its peers.
These ratios are automatically calculated in the CBM Toolbox.
VALUATION USING DISCOUNTED CASH FLOW
Every investment is the present value of all future cash flow.
We use the discounted cash flow model to calculate this:
Average EPS or Cash Flow: We have automatically calculated this for you in the CBM Toolbox. Change this only if you know what you’re doing.
Profit Growth Rate%: This is an estimate that you’re making. You can use analysts’ predictions (using Yahoo finance) or make a guestimate using your knowledge of the company (Circle of Competence) and past numbers (MOAT).
Minimum Rate of Return: This is where you enter how much you’re expecting back from your investment. Remember, the S&P index gives an average return of 8-10%. So your assumption should be more than that. We like to keep it at 15.
P/E ratio: This is another estimate you will have to make. You can either use the past 5 years’ data or the average S&P PE (20) for your estimate.
We also show the Margin of Safety (MoS) in the CBM Toolbox for the calculated fair price to understand the % difference between the current price and fair value.
A fair price in green in the CBM Toolbox means the stock is currently undervalued.
DISCLAIMER
The verdict or information provided as part of this toolbox is not specific to individual investors. It’s based on individual responses and Cold Brew Money is not liable to the information filled out by the users using this toolbox. We do not have any insight on the responses provided and the accuracy of the information and as such, the verdict is subjective to the person filling it out who will also be liable for the verdict. The information is general information only and should not be taken as constituting professional advice from Cold Brew Money. Cold Brew Money is not a financial adviser. You should consider seeking independent legal, financial, taxation or other advice to check how the information relates to your unique circumstances. Cold Brew Money is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, by use of this video. You agree to verify all information yourself before investing or consulting a financial advisor.