Feb 7, 2020
In today's episode of the podcast, Robert Hirsch from Freedom
Factory talks about - What is the Most Undervalued Asset
Listen to the podcast, read the transcript, or watch the video below.
Hi there. It's Robert Hirsch from Freedom Factory again, and I
want to talk to you today about what I see as
the most undervalued asset class on the planet. And that's
small business. If you're to go buy a small business, and let's say
it's making $200,000 a year and it's in an average industry, and
you know an average thing, you might be able to buy it for three
And what that means is the purchase price of the company would be $600,000. Now a lot of guys are watching saying, you know, maybe I don't have a $600,000 check or a 6 million check or a 60 million check. Put whatever size is appropriate for you, but you can go get things like small business loans.
You can do seller carry notes. Often you can buy a company throwing $200,000 a year, for only a hundred or $200,000 into it or less. And when I look at the stock market, let's say a company is trading for 20 times earnings. So if it's earnings or $1 million, it's trading for 20 million is its market cap.
Well, it's much more interesting to buy a company at three X. They want a 20 X, and you know the math is pretty obvious. But if you have an entrepreneurial skillset and you're willing to work hard and sales and marketing and entrepreneurship. There isn't a more undervalued asset class on the planet. You know, me personally, I've made all my money from buying, selling, and operating small businesses over a 28-year career.
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