We have discussed how stock market really works, with details how to set up brokerage account, tax obligations, spread when buying also enter and exit strategy.

1. Vienna Value Investing
Meetup #4 – For Newbies 
PRESENTED BY MARTIN BODOCKY
SUPPORTED BY

2. Why this meetup?
CREATE VALUE INVESTING HUB IN VIENNA
SHARE IDEAS AND EXPERIENCE AMONG MEMBERS
DOING INVESTMENT RESEARCH TOGETHER
THIS IS AN OPEN DISCUSSION MEETUP, PLEASE ASK
WHENEVER YOU LIKE

3. Who am I?
MARTIN BODOCKY
CEO OF MINT IT
AI AND FINTECH GEEK

4. Disclaimer
WE ARE NOT INVESTMENT ADVISORS.
WE ARE NOT RECOMMENDING TO BUY OR SELL.
WE ARE NOT TAX ADVISORS.
ANY DECISION YOU CONCLUDED FROM THIS SESSION
IS YOURS NOT OURS, YOU ARE IN CONTROL.

5. Agenda
1. HOW CAN YOU START EQUITY INVESTING
2. CHOOSING BROKERAGE ACCOUNT
3. TAX IMPLICATIONS
4. WHERE TO FIND FINANCIAL INFORMATION
5. WHAT IS BUY AND EXIT STRATEGY

6. Why should we invest?

7. How should we invest?

8. How to start investing
1. OPEN BROKERAGE ACCOUNT
2. FIND THE RIGHT INVESTMENT
3. BUY
4. KEEP USUALLY FOR MONTHS/YEARS
5. SELL, TAKE PROFIT
6. REPEAT FROM STEP 2.

9. How and why company becomes public
• INITIAL PUBLIC OFFERING (IPO) IS A FIRST SALE OF
STOCK BY A PRIVATE COMPANY TO THE PUBLIC
• RAISING A NEW FUNDS FOR A COMPANY
• ALLOW LIQUIDITY FOR CURRENT SHAREHOLDERS
• SELLING TO PRIMARY MARKET TO INSTITUTIONAL
INVESTORS
• THEN RE-SELLING TO SECONDARY MARKET TO
RETAIL INVESTORS

10. Is it wise to buy at IPO?

11. What is brokerage?
• REGULATED MIDDLEMAN BETWEEN INVESTOR AND
PUBLIC STOCK MARKET
• MAIN DUTY IS FACILITATE TRANSACTION
• THEY HOLD INVESTOR’S MONEY IN BROKERAGE
ACCOUNT
• THEY CAN ALSO OFFER RECOMMENDATIONS, NEWS
FEED, WEEKLY TIPS AND ANY MORE …

12. How is it done?
Execute
order at
stock
market
Brokerage
connect to
stock
exchange
You make
order in
brokerage
account
Each public company can be available on one or more stock
exchanges like London Stock Exchange, NASDAQ or Vienna
Stock Exchange.

13. Brokerage fee
• BROKERAGE FEES CAN BE A PERCENTAGE OF THE
TRANSACTION, A FLAT FEE OR COMBINATION OF
BOTH
• THERE IS ALSO CONNECTION FEES PAID TO STOCK
EXCHANGE
• THERE ALSO CAN BE A FEE PAID TO PURCHASE OF
SPECIFIC INVESTMENT PRODUCT LIKE ETF

14. Brokerage fee example
𝐹𝑙𝑎𝑡 𝑓𝑒𝑒 + 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 ∗ 𝑡𝑟𝑎𝑛𝑠𝑎𝑐𝑡𝑖𝑜𝑛 𝑓𝑒𝑒
+ 𝑐𝑜𝑛𝑛𝑒𝑐𝑡𝑖𝑜𝑛 𝑓𝑒𝑒 + 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑇𝑦𝑝𝑒 𝑓𝑒𝑒
• BUY ‘IBM’ AT NEW YORK STOCK EXCHANGE FOR $ 1000
$ 2.00 + $1000 ∗ $0.04 + $2.50 + $0.00
• BUY ‘S&P500’ ETF AT NEW YORK STOCK EXCHANGE FOR $
1000
$ 2.00 + $1000 ∗ $0.04 + $2.50 + $4.00

15. How to choose brokerage
• FREQUENCY OF YOUR TRADING
• YOUR TRADING EXPERIENCE
• YOUR EXPECTATIONS ABOUT ADDITIONAL SERVICES
LIKE RECOMMENDATIONS, TIPS, OR TAX ADVICE
• HTTP://BROKERCHOOSER.COM/
• (DISCLAIMER: I KNOW PEOPLE BEHIND THIS
SERVICE)

16. Brokerage business
“THEY ARE ALL NICE PEOPLE BUT
THEY ARE PAID BY YOUR ACTIVITY
NOT BY YOUR SUCCESS, YOU
SHOULD NEVER BLINDLY FOLLOW
THEIR RECOMMENDATIONS!”

18. What price I pay
• BID IS PRICE YOU BUY
FOR
• ASK IS PRICE TO BE
SOLD FOR
• SPREAD IS THEIR
DIFFERENCE

19. Stock trading taxes
• YES WE HAVE TO PAY TAXES ON YOUR RETURNS
• THERE ARE MANY TAX IMPLICATION TIED TO
DIFFERENT INVESTMENT VEHICLE
• YOU ARE NOT PAYING TAXES WHEN YOUR
INVESTMENT GAINING VALUE, ONLY WHEN YOU
SELL IT
• ATTACHED DELOITTE AUSTRIA TAX GUIDE

20. Value of patience

21. Common scenarios
• SELLING YOUR INVESTMENT IN LOSS
YOU CAN LOWER YOUR PERSONAL TAX
• SELLING YOUR INVESTMENT IN PROFIT
IT’S CLASSIFIED AS CAPITAL TAX AT 27.5 %
• GETTING DIVIDENDS OR BOND PAYMENTS
IT’S CLASSIFIED AS DIVIDEND TAX AT 27.5 %

22. My tax tips
1. WHEN YOU HAVE A LOSING INVESTMENT BY END
OF FINANCIAL YEAR SELL IT AND BUY IT BACK =>
“TAX HARVESTING”
2. WHEN YOU WANT TO SELL INVESTMENT FOR
PROFIT DO IT IN FIRST PART OF YOUR FINANCIAL
YEAR, YOU HAVE OPPORTUNITY TO HAVE SOME
LOSSES TO REMOVE THEIR TAX BURDEN

24. Financial data about public company
• BALANCE SHEET
• INCOME STATEMENT
• CASHFLOW STATEMENT
• GOOGLE AS EXAMPLE

25. Balance sheet
• STATEMENT OF NET WORTH OF BUSINESS OF TIME OF
PUBLISHING
• CONTAINS THREE ELEMENTS
• ASSETS ARE WHAT COMPANY HOLDS, LIABILITIES WHAT
IT NEEDS TO PAY AND EQUITY WHAT VALUE IT CREATES
Assets Liabilities Equity

26. Income statement
• STATEMENT OF NET WORTH OF BUSINESS OF TIME OF
PUBLISHING, IT CAN HAVE QUARTERLY OR ANNUALY
FASHION
• PROVIDES REVENUES – HOW MUCH WAS SOLD
• GROSS PROFIT
• OPERATING EXPENSES
• NET INCOME

27. Cash flow statement
• THE CASH FLOW STATEMENT IS DISTINCT FROM THE
INCOME STATEMENT AND BALANCE SHEET BECAUSE IT
DOES NOT INCLUDE THE AMOUNT OF FUTURE
INCOMING AND OUTGOING CASH THAT HAS BEEN
RECORDED ON CREDIT.
• THEREFORE, CASH IS NOT THE SAME AS NET INCOME,
WHICH ON THE INCOME STATEMENT AND BALANCE
SHEET, INCLUDES CASH SALES AND SALES MADE ON
CREDIT.

28. My ratios #1
• PRICE TO EARNINGS RATIO - REPRESENTS HOW
MUCH INVESTORS ARE WILLING TO SHELL OUT FOR
EACH DOLLAR OF A COMPANY'S EARNINGS. IT
SHOULD NOT BE COMPARED ACROSS DIFFERENT
INDUSTRIES.
• PRICE TO BOOK RATIO
•
𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝
𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠 −𝐼𝑛𝑡𝑎𝑔𝑖𝑏𝑙𝑒𝑠 −𝐺𝑜𝑜𝑑𝑤𝑖𝑙𝑙

29. My ratios #2
• DEBT-EQUITY RATIO – MEASURE COMPANY
FINANCIAL LEVERAGE
𝑇𝑜𝑡𝑎𝑙 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
𝑆ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑒𝑟′ 𝑠 𝐸𝑞𝑢𝑖𝑡𝑦
• FREE CASH FLOW - TELLS AN INVESTOR HOW MUCH
ACTUAL CASH A COMPANY IS LEFT WITH AFTER
ANY CAPITAL INVESTMENTS.
𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝐼𝑛𝑐𝑜𝑚𝑒 − 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐸𝑥𝑝𝑒𝑛𝑑𝑖𝑡𝑢𝑟𝑒 𝐶𝐴𝑃𝐸𝑋

30. Intrinsic value

31. Buy strategy
• CREATE INVESTMENT CASE
• WHAT HYPOTHESIS YOU ARE BETTING ON?
• WHEN PRICE WILL BE LOWER AS YOUR FAIR PRICE
MINUS MARGIN OF SAFETY
• INVESTMENT CHECKLIST

32. Investment Checklist
• CIRCLE OF COMPETENCE – INDUSTRY, SECTOR
EXPERIENCE
• RISK AVERSION – VOLATILITY OF SECURITY
• DIVERSIFICATION – BETA, INDUSTRY, SIZE
• GOAL APPROACH(TIME LIMITED INVESTMENTS)

33. Exit strategy
• THE STOCK PRICE IS HIGHER THAN YOUR FAIR PRICE
• YOUR ASSUMPTION/HYPOTHESIS DISAPPEARS

34. Any questions?

35. Next sessions
• INVESTMENT DEBATE – SECOND PART OF JUNE
• ANY IDEA ? - PLEASE PARTICIPATE