 Good day fellow investors. Today we're going to analyze Daimler by applying the 25 tools from the book Modern Value Investor. The funny thing is that I analyzed the company in December 2017 when I was finalizing the book and really looking for a company to apply all those tools. Daimler is a big company and fitted perfectly all the tools so I can really show how you go about investing and applying those tools on the company. The problem is that when I did that in December the stock price was 77.5 euros, now it's much lower but my intrinsic value was even lower than that. So I was risking it, okay I'm so I'm analyzing a 77 euros stock but my real price is much lower and I'm putting that into a book. I'm sorry for Daimler shareholders that this became reality so quickly but let's analyze the stocks, let me show you my models, let me show you my application of the tools, let me show you what I'm looking at when analyzing a stock that others aren't and that's something crucial. You have to have a long-term perspective on any investments you do. That's the message for today. Let me show you first Daimler stock price and then my models and then how I get about intrinsic value, margins of safety and what would be a purchase price for a stock like Daimler. So if you look at Daimler from 1996 to 2017, 20 years you can see that when the economy is good the stock peaks with shocks that make it very very volatile especially if you look it from a long-term perspective. You can see in 1998-97 very high 100 euros then dropping to below 60 then again to 90 depending on the shocks as the recession 2002 came very low to 30 euros spiking 2007 when things are good this gets expensive again down 2008 2011 up 2012 European crisis down 2015 everything was good up Chinese crisis down and now we are there around 5590. The problem is that most analysts don't look from such a 20-year perspective I do and their valuations for the stock in December were between 55 euros and 90 euros because they extrapolate the last few quarters and put them into their long-term models. Let me show you how that looks like. So this is Daimler stable net present value 1.5 growth rate 1.5 growth rate of the car market which is estimated by McKinsey and the 10% discount rate. I just take 10 years of expected earnings and then come to a sum of present values of 67 euros in this case which was close to the 77 and close to the average the analysts gave. However this is a very very static and linear assumption and conservative because I don't include the final value but that doesn't matter as long as you keep using always the same methodology to compare stocks of course. Now if I put a 3% growth rate which was also an estimation for the market and a 5% discount rate my present value immediately jumps to 83 so again this is a linear estimation but when we start adding a recession where usually Daimler's earnings go deep into the negative and that's why you see the stock price drop so significantly so here I added a recession where they lose 50% of current earnings into the negative but also earnings drop 50% 2019-2021 only to continue the growth from before and then the sum of present values is already 49 just 50 euros. If I include two recessions the sum of present value is down to 40 euros so if you include what happens over 20 years there will be recession there will be shocks then you can see how there will also be much better opportunities for buying Daimler not at 77 but at 50-40 and here I applied in December what happened in the previous 20 years to a potential intrinsic value book value growth line which is the stable line and the past price the volatility of the past price into the future and you can see that every few years with the recession Daimler's stock falls severely below its intrinsic value and that is when you have to buy such a stock and unfortunately for investors we didn't have to wait long for shocks to hit the stock so Trump is threatening his war with tariffs with Europe with China with everybody but this hits stocks like Daimler who sell a little bit in the US China and all across the world and Daimler becomes the first to predict profit hit and lower their guidance which really trashed the stock the stock was 77 in December now it fell to 57 and as you can see from the last five years Daimler was a roller coaster stock and will always be a roller coaster stock so that's something you have to keep in mind because most analysts look it from a linear perspective okay this is a shock this will lower earnings but they don't look okay in a few years will it get better they don't know but just look at history it gets worse it gets better it gets worse better worse better and that's what you have to take advantage of when investing here is the rest of the tools applied the range of values from the analysts present values liquidation values private owners intrinsic value that I got cash per share trust in management potential future price psychicality catalyst sector insider activity dividend sentiment business mode and what says google about the stock and scandals don't forget the diesel scandal so my conclusion was Daimler's intrinsic value I think was 50% in the book buy with a margin of safety 20 to 40% now the 20 40% margin of safety if you buy Daimler at 50 I think you will have a 10% long-term return if you buy with a 20% margin you wait it at 40 but that depends on you and how much time you have to analyze stocks the more you can have stocks to compare the more you can wait for better margins of safety if you can buy Daimler at 30 if you miss it you have something else so the more investment analysis you do the more comparatives you have the more you can wait for bargains bargains and bargains and those bargains will come here and there as we have seen from the long-term chart as we have seen how the stock is affected by the shocks so the message for today is really take the long-term perspective when investing okay things are really good now but what are the shocks that can hit the stock what can be piled on and then try to buy where okay there's nothing bad that can happen it can get worse than this and then you really buy a stock like Daimler from my current perspective if Daimler hits 40 I will really look at it to see whether it is a buy compare it to other opportunities and not if you are a long-term investor who wants a good return at 50 you might start thinking about it but not at 77 not at 90 because then the risk the return is small and the risk is too big so the message from today is Daimler look at the stock but look at everything you do when investing from a long-term perspective take a 20 year perspective what can go wrong what can go right and everything will be much much easier you will have much less to do because there will be less opportunities to invest but nevertheless you will invest with less risk and high returns if you like this approach please check my book on amazon the link is in the description below if you like this approach to analyzing stocks but you don't have the time check my research platform thank you for watching i'll see you in the next video