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25iQuiz:

Morningstar: "We assign Dollar General a narrow moat rating on the strength of its brand intangible assets and a cost advantage."
05/12/2019

Is this the right way to assess the existence of a moat?

Is the conclusion correct?

How does a moat impact intrinsic value?
2/ "Dollar General (DG) serves customers in rural and suburban areas, while its rival, Dollar Tree (DLTR), targets suburban, middle-income shoppers. Family Dollar focuses on lower-income urban and rural customers." news.google.com/articles/CAIiE…
3/ Voodoo that you do? "The stochastic reading is projected to decline to 58.28 this week from 69.51 on Nov. 29. When the stock set its high this reading was 91.57, above the 90 threshold as an inflating parabolic bubble, which is a signal to book profits."news.google.com/articles/CBMiM…
5/ "Economic Moat is a proprietary Morningstar data point." morningstar.com/InvGlossary/ec…

Is the above sentence:
6/ What is the relationship between:

"Competitive advantage period (CAP) is the time during which a company is expected to generate returns on incremental investment that exceed its cost of capital" people.stern.nyu.edu/adamodar/pdfil…

and the existence of a moat? Why does it matter?
7/ Clue: The terminal value can make up 70 percent or more of the outcome of a DCF analysis.

people.stern.nyu.edu/adamodar/pdfil…

people.stern.nyu.edu/adamodar/pdfil…
8/ "Just 44% of food sales today go to traditional grocery stores, down from 90% 30 years ago. [They must] fend off deep-discount chains like Aldi and Dollar General and diminish the treasure-hunting appeal of places like Costco and Trader Joe’s." bloomberg.com/features/2019-…
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Tren Griffin
@trengriffin
1/ The streaming industry has been selling music at the current subscription prices for a long time because: (1) the streaming itself is a commodity with zero pricing power and (2) the music owners have wholesale transfer pricing power over the streamers. rollingstone.com/music/music-ne…
2/ Music streamers must find first party content (e.g., podcasts) that doesn't expose them to wholesale transfer pricing power of music owners to remedy the gross margin problem. Netflix and Amazon know this and that is why they create content they own. 25iq.com/2017/08/19/wha…
3/ If the music streamers raise the retail prices for consumers music owners can just raise their wholesale transfer prices and take any new profit.

Chance the Rapper found a way to take a slice of the profit pool and preserve his share in a value chain. 25iq.com/2018/09/01/les…
Read 5 tweets
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Tren Griffin
@trengriffin
1/ Any interview with Marc Andreessen (@pmarca) is self-recommending Early in the interview he talks about how Jio has connected many millions of people to the Internet. What isn't well understand is the back end innovation that enabled this even with 4G.
@pmarca 2/ Jio built its customer base on a greenfield network that "virtualized and cloudified the core network" (e.g., the Jio network has zero circuit switches). Software Defined Networking (SDN) enables breakthrough levels of automation and provisioning. The service has lower costs.
@pmarca 3/ Andreessen points out that innovations like Jio increase "n", which increases the value of networks. My quibble is Metcalfe's law is wrong and instead “the value of a network of size n grows in proportion to n log(n). a16z.com/2016/03/07/net… But increasing n still matters.
Read 3 tweets
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Tren Griffin
@trengriffin
"Streaming giants are struggling with a big churn conundrum: Only a third of users stick around." bloomberg.com/news/articles/…

25iQuiz: Is the cost of a free trial COGS or CAC? Is that expense above the gross margin line or below?
"A business that ignores even small changes in churn often ends up dead. As with any metric, it is better to be roughly right in calculating churn than to be precisely wrong. It is also important to understand that there are sneaky ways to hide churn..." google.com/amp/s/25iq.com…
There isn't any GAAP rule since the accounting rules assume all businesses are manufacturers from decades ago. 😉 Hopelessly out of date.

Tren: Someone on a free trial is a prospect. They are in a sales funnel, but not converted to paid. Giving a prospect free service is CAC.
Read 3 tweets

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Filomena Rocha
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22. United States decided to label #IRGC terrorists. But who are the real terrorists? Who created, trained, armed & financed the worst terrorist groups in the world?

#Hypocrites #DoubleStandards #Liars #Warlords #USRealTerrorists
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Santiago Capital
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I've received several (SEVERAL 😅) emails, texts, DMs etc over the last 24 hours asking me if I'm ready to throw in the towel on the strong #dollar thesis and admit I was wrong on #gold because it is "clearly breaking out now" (and I said it was not yet ready to do so).
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So I thought I'd write a thread so I can answer everyone at once.
First of all, nothing has been definitively proven one way or the other yet on either gold or the dollar.
Second of all, if you think being wrong is something I'm not capable of handling, I assure you I am.
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I have been wrong many times in my life/career. And I will undoubtedly be wrong many times going forward. Nobody gets it right all the time. Getting things wrong from time to time is part of this job. To think you are not going to get things wrong...is hubris, pride, etc
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Anandita Jain
@jain_anandita
[1] Morning Star is a reversal candlestick pattern from a bearish to a bullish market. It is formed after a downtrend when the market has hit bottom and signifies the start of an uptrend.
[2] This pattern consists of 3 candlesticks. The first being a strong bearish whole body candle, followed by a very thin body candle (called star here) and then followed by a strong bullish candle. The important thing to note is the gap down between the first two candles.
[3] A gap down essentially means that the opening of the star is lower than the closing of the first. The star need not open below the lower wick of first candle but can exist between the closing price and the lowest price of the first candle.
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Dan Schulz
@danschlz
Intangible assets may be one of the most important, least understood phenomenon of the 21st. Innovation, growth, inequality, the role of management, and financial and policy reform can't be understood without a proper measure of intangible assets.
The 2002 Conference on Research in Income and Wealth sought to measure the types of investment people were making in "the new economy." At the time, Microsoft was the world's most valuable company at $250b. $3b (1%) was plant and equipment. This was unheard of.
Intangible investments usually incur a sunk cost. It's difficult to sell the "assets" at a future date. They're often specific to the company who made the investment, but at the same time, others may benefit from them.
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Robert Hewitt Wolfe
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So... been thinking a lot about all the beautiful scripts out there that will never seen the light of day. The stillborn and the misbegotten. They'll never be filmed. They're just paper now. How would you like to read one?
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