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Earnings are a clue about long term future cash flows. They are a too irresistible short cut for a writer who wants to avoid doing a valuation of a business:

"Investors would now have to fork out about 41 times estimated earnings to buy Ferrari stock."

washingtonpost.com/business/ferra…
"Industrial free cash flow now projected to exceed EUR0.6 billion, supported by the strong collection of the advances of the Ferrari Monza SP1 and SP2, lower tax payment and the phasing on some investment programs between 2019 and 2020." google.com/amp/s/www.fool…
The number of times I have bought a partial interest in a business based on something like:

"Ferrari N.V. (RACE) Formed Double Top Chart Pattern"

is never.
25iQuiz: Is this analysis useful in valuing a stock? "Dudenhoffer determined the average $80,000 profit by taking annual revenue and EBIT (earnings before interest and tax) for the first half-year reports of 2018 and dividing it by the number of sold cars."google.com/amp/s/www.cnbc…
How much of the value of Ferrari as calculated in a DCF is terminal value?

How much will that terminal value be impacted by the electrification of performance cars?

How deep under ground is the assumption about terminal value buried in a P/E multiple?

wsj.com/articles/ferra…
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Tren Griffin
@trengriffin
"The report predicts that by 2025, 45% of the total mobile data traffic will be carried by 5G networks." techrepublic.com/article/5g-tak…. Why don't they reveal the numbers to the right of the decimal point in their spreadsheet?
Everyone knows it is better to be precisely wrong than approximately right in making predictions. Or is it the reverse? In any case, hide the assumptions and be vague enough to claim you are right with any outcome. Only remind everyone if you are right tho. Forecast a 40% chance!
By 2021, 11.0 exabytes (EBs) per month will be in gaming traffic, up from 1.2 EBs per month in 2016. cisco.com/c/dam/assets/s…
Read 3 tweets
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Tren Griffin
@trengriffin
25iQuiz: What's the LTV of a Disney+ customer? ARPU? Churn? Gross margin? CAC?

"Apptopia issued a report estimating streaming service Disney+ has reached 15.5 million downloads and generated $5 million through in-app purchases." news.google.com/articles/CAIiE…
What about Hulu? What are the unit economics? Why is ARPU so low?

"It seems the effective subscription price for Hulu SVOD is very low (and even with that, Hulu barely grew in the fiscal fourth quarter, adding only about 500,000)” net new paid subscribers."
Zen Riddles:

If someone is watching DISNEY+ on a free trial are they a "customer"?

Is the cost of that free trial COGS or CAC?

If a mobile operator pays the fee for the first year for a person, how much higher will the churn rate be and how much lower is ARPU?
Read 4 tweets
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Tren Griffin
@trengriffin
25iQuiz: If you have read my 25iq.com posts on subscriptions and unit economics you should be able to do an analysis of the business model of "unlimited ramen."

25iq.com/2018/08/11/how…

25iq.com/2017/07/15/ama…

25iq.com/2018/01/20/sup…

25iq.com/2016/12/31/a-h…
Other blog posts on 25iQ may help you create an answer. What opportunity is the ramen shop trying to solve? Is it like a car wash selling a monthly subscription unlimited washes? google.com/amp/s/25iq.com…
Which unit economics variable is a restaurant trying to improve with an unlimited offer?

"Olive Garden, notes pasta pass holders visited the restaurant an average of 28 times during last year's promotion, many times bringing along groups of friends."
Read 3 tweets

Related threads

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JPR007
@jpr007
LONG-TERM AUTO LOANS

This article actually makes one of the best arguments for buying an EV over an ICE vehicle.

Think about it :

1. people are now choosing to pay ~$38,000 for a new vehicle that is superior to what they used to own npr.org/2019/10/31/773…
2. They choosing to use ~7-year Auto Loans to make that decision seem more affordable to them

3. For that price they can buy a state-of-the-art EV that will cut their monthly fuel bill by 75% and almost eliminate any routine maintenance costs
4. These are real monthly Cash savings that can go directly to wards making that monthly loan payment, making the original sense of affordability even more affordable in real terms.
Read 21 tweets
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Steve Faktor
@ideafaktory
@LinkedIn @LinkedInToday The H-1B is profoundly broken. It doesn't need to be cut, but reformed.

A rebuttal to this piece (from firsthand experience managing a global team with H-1B's at a F100 US corporation.:

bloomberg.com/opinion/articl…

(thread)
H-1Bs don't officially make workers indentured & underpaid; just unofficially. Workers can only switch to other companies that will pay to sponsor visas. Many don't. So:
- That reduced market
- Extra cost
- Transactional friction

Limit their options & pay.
Because many H1B workers arrive without families (or at least extended families), they tend to work longer hours, so companies get more bang for the buck.

How much buck?
Read 12 tweets
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eric boroian
@eboroian
This summer, it'll be nearly 20 years since I started playing guitar. Mostly Jazz & Blues, but also Folk & Bluegrass.

Of all the things I've learned, two really stand out as the biggest drivers of improvement. They both have interesting applications to investing...
In guitar soloing, there's a trend towards memorization vs understanding. People memorize scales instead of trying to understand why certain notes sound good in a given context. This is a mistake
Scales are patterns (often sets of notes in diagram form) that can be played over certain chords in a given key. They are amongst the correct group of notes to play. They're a shortcut, and are used because they're convenient.
Read 43 tweets
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Spencer Bogart
@CremeDeLaCrypto
1/ We dug in to Maker / $MKR and, in the spirit of the industry, wanted to open-source some questions and concerns that surfaced. Thread below...
First, worth noting that Maker’s traction is impressive, it’s a fascinating experiment and I’m glad that they’re pushing the boundaries of innovation. Most of that is well-covered, so I’ll use this thread to instead surface concerns (and hopefully answers!)
I summarized some of our concerns in a Reddit post (reddit.com/r/MakerDAO/com… ) and was really impressed with the community’s willingness to address difficult questions without seeing it as FUD (thank you!)
Read 20 tweets
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Abhishek Murarka 🐂💹
@abhymurarka
1/n
A tweet thread on my key takeaways and learnings from the book "Of Long Term Value and Wealth Creation from Equity Investing" by the brilliant Bharat Shah. The book is a repository of condensed wisdom from 3 decades of his investing career – a must read!
[RT if helpful]
2/n
Essential principles of investing have largely remained unchanged over history of organized investing. What has changed is the interpretation and application by investors, as deemed convenient or expedient at a particular point in time.
3/n
 Investing is simple, but not easy.
Simple, because it's not difficult to understand the essential principles of investing- a large opportunity, accretive earnings growth, high character & a certain degree of predictability. Not easy, because the required discipline is rare.
Read 45 tweets
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InvestGod
@eldivyn
I always tell people, think of stocks as owning part of a business, rather than just as tickers to trade up and down. 25 likes on this post and I'll tweet 10 things I evaluate about a business before I buy stocks in it.
Okay, so we have hit 25 likes. Most people do this at the end but I'll do this at the beginning: welcome to my TED talk. This is a thread to tell you that investing in stocks should not be about gambling and shouldn't be focused on the short term.
Think of every stock you buy as purchasing a business and becoming part owner. You don't buy a business today to sell it in 2 months after you've made 20% profit so why invest in stocks that way?
Read 24 tweets

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