Network effects occur when a product becomes more valuable as more people use it.

A company’s value may consist of both the value of existing assets and the value of future growth opportunities.

The ultimate goal of equity analysis is to identify investments whose intrinsic value differs from their market price.

Investors should consider both company-specific factors and industry-wide factors when evaluating a stock.

A company that exceeds investor expectations will always see its stock price rise.

Strong financial statements automatically guarantee a successful investment.

A company earning returns below its cost of capital is creating economic value for shareholders.

Network effects make it easier for competitors to attract users away from an established platform.

Earnings quality refers to the extent to which reported earnings reflect a company’s underlying economic performance.

Franchise value refers to the value created by future investment opportunities that generate returns above the cost of capital.