Introducing Nick Peitsch — a self-styled millennial stock market & real estate investor located in Kelowna, British Columbia, Canada. After graduating with a B.SC. in Chemical Engineering from the University of Alberta, where he also took some finance-based courses, Nick Peitsch turned to the world of finance and investing. In doing so, Nick is following in the family tradition of his entrepreneur parents and grandparents.
Recently, ivoox.com described Nick Peitsch as “a young 25 year old hustler making his way investing in stocks.” Sure, he’s young, but like most of the new generation of entrepreneurs, this type of hype-talkin’ just doesn’t do Nick justice. He doesn’t just invest in stocks, but also operates his own rental property investment and YouTube channel. With his YouTube channel , Nick Peitsch has set about fulfilling his mission to help others build wealth and achieve financial freedom through investing.
Wanting to know more about his mindset, I asked investor, YouTuber, engineer, and entrepreneur, Nick Peitsch, just what this mission involves, to which he replied: “I create entertaining YouTube videos about finance & investing to help educate newer investors in the stock and real estate markets, as well as share my own journey along the way. I hope to impact each one of my viewers in a positive way — being able to teach them at least one thing about finance or investing.”
So far this journey has taken Nick Peitsch into the niche area of value investing where he believes the greatest profits are to be made. I asked Nick what led him here, to which he mentioned, “As an individual investor, it is nearly impossible to beat the market performance over the long term. To attempt to beat the market, I follow the lead of successful people like Warren Buffet, who once said, ‘Price is what you pay. Value is what you get.’ So, I constantly look for value, i.e. buying into businesses at discounted prices to what they are actually worth.”
What does this mean in practice? As a general principle there are three golden rules Nick Peitsch sets out for the would-be investor:
- Only invest in businesses and industries that you actually understand — this lowers risk and gives you a competitive edge.
- Stock price itself is irrelevant to the underlying business — research the company fundamentals before buying!
- Only invest in undervalued assets, i.e. the price is below the intrinsic value of the business.
However, as Nick Peitsch explained to me, this is really only the first part of what can seem to be a complicated process based on research, research and more research. The most important part in the process is the method Nick Peitsch uses to identify those businesses that represent good value among the hyped up & speculative stocks.
As Nick explains in his videos, there are five simple steps to finding discounted businesses:
- Understanding the difference between market value and intrinsic value – market value is subject to short term price fluctuations so is not a good indicator of real value. You need to determine what the company is really worth.
- Use valuation metrics. These are comparison tools that help you estimate the intrinsic value of a company. No single valuation metric will give you the complete picture so you need to use several.
- Examine the balance sheet – This is used to support the analysis from the chief valuation metrics. Here, you are looking for companies with a good debt to equity ratio of around 1 to 1.5, a current ratio greater than 1, and a return on equity ratio of greater than 10%.
- Find dividend stocks – Nick Peitsch likes those businesses with a dividend yield of between 3% to 6% and that can demonstrate dividend growth every year over a ten year period, while maintaining a payout ratio below 60%.
- Use a stock screener such as the “Yahoo Finance Stock Screener”, which is completely free. Just plug in the criteria you want to search for using the information gleaned from the steps above.
And there you have it — some simple investing tips from one of the latest entrepreneurs on the block. But if you still don’t know your ROEs from your P/E ratios, the great thing about the current crop of entrepreneurs, like Nick Peitsch, is that they help take the stress out of these complicated processes. He is happy to guide you step-by-step through everything on his YouTube channel. So, if you want to learn more about the ins and outs of value investing, as well as find profitable companies that are growing their earnings every year to invest in, then join Nick Peitsch’s YouTube community today!