Discover and read the best of Twitter Threads about #caprichinvestments
Most recents (4)
A thread to understand growth stocks
As the name suggests growth stocks are which that grows its top line and bottomline for a long period of time.
As the name suggests growth stocks are which that grows its top line and bottomline for a long period of time.
1. A company grow at 20 % implies that in the previous years the Topline of the company or Its sales has been growing at 20 %
If a company’s sales grow at 20 % then it can double its revenues in ( Il leave it to you to do the math)
Is only topline growth a factor ?
If a company’s sales grow at 20 % then it can double its revenues in ( Il leave it to you to do the math)
Is only topline growth a factor ?
2. Some companies ( mature companies ) have lesser sales growth and have a higher profit growth ( Check mature companies like HUL )
What does this imply ? It means even if they aren’t able to grow their products their operations has positive “Operating leverage” and so most
What does this imply ? It means even if they aren’t able to grow their products their operations has positive “Operating leverage” and so most
A thread on competitive advantage and moats
We’ve heard of moats which is metaphorically a term used by warren Buffett. So what’s a moat in business sense ?
Put simply moats are competitive advantage that keep competitors at bay from encroaching a companies territory.
We’ve heard of moats which is metaphorically a term used by warren Buffett. So what’s a moat in business sense ?
Put simply moats are competitive advantage that keep competitors at bay from encroaching a companies territory.
What are the sources of competitive advantage ? Old age companies like standard oil and reliance had a scale advantage, where they were able to produce at scale which in turn helped them reduce costs and get a good price from their suppliers.
Do scale advantages still persist ?
Do scale advantages still persist ?
1. Scale advantages is the first source of MOAT. If a company can scale its production or service it has a huge advantage over its peers
Ex : Take Netflix, the scale advantage comes from its leverage used via internet which is absent in other forms. With scaling its had an edge
Ex : Take Netflix, the scale advantage comes from its leverage used via internet which is absent in other forms. With scaling its had an edge
Received requests on quant strategy tweeted earlier here’s a basic process I’ve modeled in the intrinsic value sheet, which removes emotions completely from decisions
Where each company is categorized based on its parameters and given range of value. I’ve hidden others companies
Where each company is categorized based on its parameters and given range of value. I’ve hidden others companies
Once the ranges are in green we start to buy without second thoughts until I feel comfortable and as long as it’s available within that range. It’s a very disciplined process.
We keep updating the sheets as new information flows in and keep revising our estimates every 6 months
We keep updating the sheets as new information flows in and keep revising our estimates every 6 months
The idea is to be non- emotional and take decisions based on data.
Most of the companies have been in the green zone in March 2020 and not navigated to yellow or Red now. So that’s a time we start building cash.
This mod helps me to think through my own valuations and process
Most of the companies have been in the green zone in March 2020 and not navigated to yellow or Red now. So that’s a time we start building cash.
This mod helps me to think through my own valuations and process
A small thread on the power of compounding.
1. If you invested 1 ₹ in the 1st box and allowed it to compound let’s say in a simple bank account, by the time it’s in the 8th box you would have made 128 x your original 1₹ now apply this to sensex or Berkshire Hathaway.
1. If you invested 1 ₹ in the 1st box and allowed it to compound let’s say in a simple bank account, by the time it’s in the 8th box you would have made 128 x your original 1₹ now apply this to sensex or Berkshire Hathaway.
2. The time it takes to reach the boxes depends on the time taken to compound. If you put that 1₹ in bank account it takes 8-10 years to move to second box, but the same will take just 3 years if invested in Berkshire and around 6 years if if you invested in sensex.
3. Compounding applies to everything in life, I had 5 good friends in school and as we grew up those 5 knew 5 more and they knew 5 more and over a period of time there’s this big group of people I came to know just by the first 5 persons. So compounding happens in everyday life.
