For several months, a close friend has been seeking to understand how to calculate a company's intrinsic value. I shared several books with him, but that didn’t do the trick. So, I told myself that the next time I was analyzing a company and calculating its intrinsic value, I’d loop him in.

Publicly traded software companies have been crashing for several weeks. They’ve reached levels where I suspected they might be priced below their intrinsic value. As I analyzed one company, I fired off a text message to my buddy asking if he wanted to go through it alongside me. Yes, he said.

An hour later, we’d walked through the financials of Snap Inc. (i.e., Snapchat) and he’d calculated an estimate of the company’s intrinsic value.

I learned a few things from the exercise. First, all the books in the world can’t replicate learning through doing. Working through a live example is the best way to learn, in my opinion. Second, it helps tremendously to have someone who understands the area help you learn something new. They can push you, explain nuances, and drastically accelerate learning (but they can’t do the work for you!). Last, the best way to learn something is to teach it to someone else. Explaining this process to my buddy forced me to identify gaps in my understanding and figure out simple ways to communicate complex things.

Overall, this was a fun exercise, and I’m glad I did it. I think this skill will help my buddy a ton, and I learned new ways to explain this topic simply.