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Tren Griffin
@trengriffin
, 3 tweets, 1 min read Read on Twitter
"...continuing shareholders reap an increase in per-share intrinsic value with every repurchase by the company. Obviously, repurchases should be price-sensitive: Blindly buying an overpriced stock is value- destructive." 2019 Berkshire Letter
Michael Mauboussin: "Buybacks below intrinsic value *penalize* sellers and benefit ongoing shareholders. Buybacks above intrinsic value benefit sellers and penalize ongoing shareholders."
"Certain shareholders will decide it’s time for them or to become net consumers rather than continuing to build capital. Charlie and I have no current interest in joining that group."

Someone I know had dinner with Munger recently. He said: "Charlie's home is remarkably modest."
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Tren Griffin
@trengriffin
There is no advertiser more relentless in trying to sell to me than the Shen Yun classical Chinese dance and music business. They are relentless advertisers and use every available marketing approach. Their sales and marketing budget must be massive. Or maybe they just like me.
"Shenyun" performance is a tool of the cult and anti-China propaganda. Clearly, "Shen yun" is not a cultural performance at all but a political tool of "Falun Gong" to preach cult messages" china-embassy.org/eng/xglj/flgzx/

ARPU of a cult member must be high due to the very high CAC!
Decades of experience with unit economics makes me think about everything that must generate cash to survive as a set of unit economics (e.g., hotdog stand, cult, restaurant). It's a mental model. Even if revenue is transactional you can estimate ARPU, CAC, GM and churn.
Read 3 tweets
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Tren Griffin
@trengriffin
1/ I tried to buy a hamburger yesterday with "earnings" and the counter clerk laughed at me. He would only take cash and said "Look earnings are only a clue about future cash flows, which you can actually spend." I knew he would say that but I did it anyway to justify this tweet.
2/ "Free cash flow is something that investors can spend. Investors can’t spend percentage margins. When forced to choose between optimizing the appearance of our GAAP accounting and maximizing the present value of future cash flows, we’ll take the cash flows.” Jeff Bezos
3/ If earnings are only a clue about future cash flow, why are people so obsessed about it? Because they are lazy and it is a shortcut companies must report. Mauboussin explains here: expectationsinvesting.com/pdf/earnings.p…
Read 4 tweets
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Tren Griffin
@trengriffin
1/ "technology has broken entry barriers and will structurally pressure margins in the consumer packaged goods (CPG) industry." You can see this in the grocery- big brands are no longer in the prime eye level shelf space. Brands like Beecher's Cheese are.

braziljournal.com/enrique-abeyta…
2/ "If you go to a supermarket, you see hundreds of new brands in the supermarket shelf, the client doesn’t want to leave their house anymore.. We bought brands we thought would last forever. We borrowed a lot of cheap money because money was cheap...."

braziljournal.com/jorge-paulo-le…
3/ "When TV advertising first arrived ...if you were Procter & Gamble you could afford the very expensive cost of network television because you were selling so damn many cans and bottles. Some little guy couldn't." Charlie Munger old.ycombinator.com/munger.html

Not the same world now.
Read 5 tweets

Related threads

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Michael Mauboussin
@mjmauboussin
1/A quick comment on Buffett and buybacks. The comment in today's letter, "Blindly buying an overpriced stock is value destructive," is not incorrect but it is incomplete
2/Here's the way to think about it
3/The first point is that value is conserved. If a company is worth $100,000 and it pays out $20,000, the new value of the company is $80,000 and $20,000 is now out in the world
Read 7 tweets
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Harish Kawalkar
@kawalkar
Charlie Munger, nor I believe that rule to be sensible. Rather, both of us have
consistently thought that at Berkshire this mark-to-market change would produce what I described as “wild and
capricious swings in our bottom line.”

#WarrenBuffet 2018 Letter
Our advice? Focus on operating earnings, paying little attention to gains or losses of any variety. My saying
that in no way diminishes the importance of our investments to Berkshire.
#WarrenBuffet 2018 Letter
Over time, Charlie and I expect them to
deliver substantial gains, albeit with highly irregular timing.

#WarrenBuffet 2018 Letter
Read 28 tweets
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Marco Rubio
@marcorubio
The justification for corporate buybacks is company has no better investment available. This may be true for any company from time to time. But what does it say when it is true for many companies year after year?

1/9
Since 1980 have steady trend of corporate profits flowing back into financial markets & less of these profits invested in increasing productivity through innovation, technology, equipment etc. The result is not enough increase in productivity, growth or widespread prosperity 2/9
Why are profits not being invested into company or new companies? Because our economy driven by large & active investors who pressure for increase earnings per share.Investment pools that prefer safe returns over long term investment & executive compensation based on stock
3/9
Read 9 tweets
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Ugo Obi-Chukwu
@ugodre
Hello everyone, welcome to @Nairametrics Corporate News Thread for the week ended December 9th, 2018. This thread is BTU by @BluechipTechNG

Thread Starts here
As usual, kindly retweet the first tweet of this thread so others on your timeline can follow. We welcome your feedback and comments on any of the tweets on this thread.

We begin...
1/ The Federal Government has given the Cross-River Garment Factory (certification) license to export its products beyond the shores of Nigeria to other parts of the world, like the US, Europe, Asia, and other parts of Africa.
Read 72 tweets
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IMReturnsManager
@IMRiskManager
Option Selling is the in thing so it'll be
The Complete Guide to Option Selling by James Cordier and Michael Gross

Week 1
#WeekendReading #LearningTogether
1 It is estimated that anywhere from 75 to 80 percent of all
options held through expiration will indeed expire worthless.
Furthermore, it is estimated that only 10 percent or less of all options
will ever be exercised.
2 "Option selling has unlimited
risk” is all that most investors know about the concept. The term
unlimited risk is enough to cause most investors to cross it off their list
of potential investment strategies without further exploration.
Read 20 tweets
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David Blanco
@dblancoen
Best fragments of one of my favorite books. Lessons from some of the best CEOs in history.
1) CEOs need to two things well to be successful: run their operations efficiently and deploy the cash generated by those operations.
2) What counts in the long run is the increase in per share value, not overall growth or size.
Read 26 tweets

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