Investment Analyst Foundations
Sequenced like a foundational investment-analyst curriculum -- quantitative methods first, behavioral guardrails, then financial reporting, equity, fixed income, derivatives, alternatives, professional ethics, and portfolio management. A core analyst foundation built for self-study learners pacing toward a comprehensive analyst footing.
Who it’s for: Self-study learners building a comprehensive investment-analyst foundation — a useful companion to the analyst concepts also covered on professional finance exams, though it is general education, not a credential study program.
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Personal Finance → Value Investing
- The Time Value of Money — Present value and discounting: why a dollar today beats one later, how the discount rate reflects opportunity cost, and how analysts price future cash flows.
- Perpetuities, Gordon Growth, and Uneven NPV — The perpetuity formula PV = C/r, the Gordon Growth model for growing dividends, and discounting uneven cash flows into a net present value, step by step.
- The Math of Compounding — Compounding math with monthly contributions, why starting age outweighs the amount, the Rule of 72 for doubling time, and Munger's rule: never interrupt it.
- Diversification: Don't Put All Eggs in One Basket — Diversification in order: splitting money across asset classes by time horizon, then world regions, then vehicles -- and why one total-market fund does most of it.
Microeconomics for Investors
- Supply, Demand & Market Prices — How supply and demand set stock prices: why prices move on buyer eagerness rather than headcounts, what volume reveals, and reading elasticity from a price hike.
- Elasticity: Why Some Companies Have Pricing Power — Price elasticity and pricing power: why inelastic demand lets a company raise prices and grow revenue, with streaming, airline, and luxury-watch cases worked.
- Perfect Competition: Why Commodity Businesses Struggle — Why commodity businesses struggle: perfect competition competes profits away, and why a 4x P/E on a cyclical producer often marks the cycle peak, not a bargain.
- Monopoly Power: The Economics Behind Competitive Moats — The five sources of a competitive moat -- network effects, switching costs, cost advantages, intangibles, efficient scale -- and why regulators become the risk.
Macroeconomics for Investors
- Inflation: What It Is and Why It Matters — How inflation erodes real returns: CPI versus PCE, why the Fed targets 2% and watches core PCE, and computing real return by subtracting inflation from yield.
- The Fed and Interest Rates: How Policy Moves Markets — How Fed rate moves ripple through markets: the transmission from fed funds to Treasury yields, mortgages, and stock valuations, plus winners in each regime.
- GDP: What the Economy Actually Produces — GDP explained through its formula: C + I + G plus net exports, real versus nominal growth, the GDP deflator, and why inventory-driven quarters tend to reverse.
- The Business Cycle: Timing the Economic Seasons — The four business-cycle phases -- expansion, peak, contraction, trough -- which sectors fit each, and why leading indicators warn before employment breaks.
Reading Financial Statements
- The Income Statement: How Much Did They Earn? — How to read an income statement: the financial statement that shows how much a company earned or lost over a period -- revenue, costs, and profit, explained.
- The Balance Sheet: What Do They Own and Owe? — What a company owns, owes, and leaves for shareholders: why assets always equal liabilities plus equity, how to spot growth funded by debt, and three lines most readers skip.
- Cash Flow: Follow the Money — Cash flow is the hardest statement to fake: the three sections and what healthy looks like, the free-cash-flow formula, and how rising earnings can hide falling cash.
- EBITDA: What It Is and Isn't — What EBITDA strips out and why, how it helps compare companies with different debt loads, and how adjusted add-backs and ignored capex can mislead.
Financial Accounting
- Accrual vs Cash Accounting — How accrual accounting differs from cash basis: revenue recognized when earned, why a profitable company can still run out of cash, and reading deferred revenue.
- Depreciation: Spreading the Cost of Assets — Depreciation spreads an asset's cost across the years it earns: the straight-line formula, why it is a non-cash expense, and what EBITDA hides by leaving it out.
- Revenue Recognition: The ASC 606 Five-Step Model — The ASC 606 five-step model for recognizing revenue: identifying performance obligations, allocating the price, and why aggressive timing invites fraud.
- Inventory: FIFO vs. LIFO and Why It Matters — FIFO vs LIFO in rising prices: which method reports higher profit, why LIFO cuts the tax bill, and using the LIFO reserve to restate for comparability.
- DuPont Analysis: Decomposing Return on Equity — DuPont analysis splits return on equity into net margin, asset turnover, and leverage -- showing whether a headline ROE comes from profits or borrowing.
- EPS and Dilution: The Most Watched Number on Wall Street — Basic vs diluted EPS: how options and convertibles expand the share count, why valuation should use the diluted figure, and where EPS growth comes from.
- Deferred Taxes: Why Tax Expense Differs from Taxes Paid — Why book tax expense rarely equals cash taxes paid: how deferred tax assets and liabilities arise, loss carryforwards, and reading the effective tax rate.
- Lease Accounting: The Hidden Debt That Isn't Hidden Anymore — Lease accounting under ASC 842: operating vs finance leases, right-of-use assets and lease liabilities, a worked rent capitalization, and where IFRS 16 differs.
Intermediate Accounting for Analysts
- US GAAP vs. IFRS: Key Differences That Move Numbers — The GAAP-IFRS differences that move reported numbers, using the LIFO reserve to convert inventory to FIFO, and adjusting for capitalized R&D before comparing.
Understanding Valuation
- What is a P/E Ratio? — What is a P/E ratio? The price-to-earnings ratio shows how much investors pay for $1 of a company's profit -- the most-used valuation metric, explained simply.
- EV/EBITDA: The Professional's Metric — Why professionals price on EV/EBITDA rather than P/E: how enterprise value neutralizes debt and taxes, what typical sector ranges look like, and why no band is universal.
- Price-to-Book: Asset Value — What price-to-book compares and when it actually works: what a reading below 1.0 means, why banks are the classic case, and how to tell a bargain from a value trap.
- Cost of Capital: What Discount Rate to Use — What the cost of capital is: how WACC averages the costs of debt and equity, why the discount rate drives the whole valuation, and why it is a judgment call.
- DCF: What Is a Company Really Worth? — How a DCF estimates what a company is really worth: the four steps, discounting future cash flows to today, and why a fragile output demands a margin of safety.
DCF Valuation in Practice
- WACC: The Discount Rate That Makes or Breaks Your Model — How WACC is assembled from the cost of equity and debt, what different rates imply about risk, and how a two-point change in the discount rate moves a valuation.
Understanding Bonds and Fixed Income
- What Is a Bond? — What is a bond? A bond is a loan to a company or government that pays you fixed interest (the coupon) and returns your principal at maturity. Explained simply.
- Price vs Yield: The Seesaw Relationship — Why bond prices and yields always move in opposite directions, how a 5% bond reprices as rates change, and the yield-to-maturity approximation formula.
- Duration: Measuring Interest Rate Risk — What bond duration measures, how to estimate a price change from a one-point rate move, and why 30-year Treasuries swing far more than 2-year notes.
- Credit Spreads: Pricing Default Risk — What a credit spread is, typical spreads by rating, and why widening spreads are a leading indicator of stress -- your pay for taking default risk.
- Capital Structure: Who Gets Paid First? — The capital-structure priority ladder from secured debt to equity, typical recovery rates by seniority, and who actually gets paid in a Chapter 7 liquidation.
Capital Markets
- Understanding Yield Curves — How to read normal, flat, steep, and inverted yield curves, plus the forward-rate and term-premium mechanics that turn curve shape into a rate forecast.
Derivatives Beyond Options
- Forwards and Futures: Locking In a Price — How forwards and futures lock in a price with no cash upfront, why clearinghouses and daily settlement cut counterparty risk, and how an airline's fuel hedge plays out.
- Put-Call Parity: The Pricing Anchor — The parity equation linking calls, puts, stock, and a risk-free bond: how one option's price fixes the other, and how to spot arbitrage when the relationship breaks.
Options Fundamentals
- Calls and Puts: The Building Blocks — What calls and puts give you the right to do, why each contract controls 100 shares, and how a buyer's maximum loss is capped at the premium paid up front.
- The Four Greeks: Delta, Theta, Gamma, and Vega — Delta, theta, gamma, and vega in plain terms: what each Greek tracks, why theta bills option buyers every day, and why gamma punishes option writers.
Alternative Investments: Beyond Stocks and Bonds
- What Alternative Investments Are — What counts as an alternative investment: the five families from private equity to farmland, the illiquidity premium, and the accredited investor test.
- Hedge Funds: The Market-Agnostic Mandate — How hedge funds pursue market-agnostic returns: long/short equity spreads, the 2-and-20 fee model, and telling genuine alpha from repackaged beta.
Leveraged Buyout Analysis
- LBO Mechanics: How Financial Sponsors Create Returns — How sponsors buy companies with 50-70% debt and build equity through EBITDA growth, multiple expansion, and debt paydown -- with sources-and-uses mechanics.
Venture Capital & Startup Investing
- How Venture Capital Funds Work — How VC funds work: the LP-GP structure, management fees plus carried interest, and the power law that lets one or two big winners carry thirty investments.
BDC Investing -- Public Access to Private Credit
- What is a Business Development Company? — What a business development company is: a public fund lending to mid-sized private firms, why the 90% payout rule drives high yields, and how those dividends are taxed.
Real Estate Investing
- Cap Rates and Property Valuation — Cap rates as real estate's earnings yield: NOI over value, the risk-free plus premium minus growth decomposition, and why rising rates cut property values.
- Building a Real Estate Allocation — Building a real estate allocation: why your home does not count, what a 10% REIT sleeve does to a portfolio, and where REIT income yield comes from.
Professional Ethics: How Investment Professionals Are Supposed to Behave
- Fiduciary Duty: The Client Comes First — Fiduciary duty's two limbs -- loyalty and care -- why sincerity is no defense to unsuitability, and how Reg BI sits between suitability and the full standard.
- Conflicts of Interest and Fair Dealing — Conflicts of interest in practice: why disclosure is the floor, not the cure, what front-running looks like, and the avoid-disclose-never-exploit discipline.
- Material Nonpublic Information and the Insider-Trading Line — Where the insider-trading line sits: material AND nonpublic, how tippee liability reaches beyond insiders, and why the lawful mosaic theory is different.
First Portfolio Builder
- Position Sizing and Rebalancing: Keeping Your Target Weights — Setting position weights -- equal, market-cap, or conviction -- with caps on single positions, and why drifting winners quietly push risk above your target.
Portfolio Risk Management
- Risk Metrics: Sharpe, Beta, and Drawdown — Sharpe ratio, beta, and maximum drawdown in practice: what each metric measures, why beta times the market move sets your expectation, and how to read your own numbers.