A thread on 7 pillars of investing ( Investment framework of @unseenvalue )
[My understanding]
One pillar per day :)
Day 1: Circle of competence.
[My understanding]
One pillar per day :)
Day 1: Circle of competence.
And this one is very interesting :)
2nd Pillar: Management.
3rd Pillar: Industry Structure.
4th Pillar: Business Economics.
( Some of the key points mentioned here)
( Some of the key points mentioned here)
5th Pillar: Psychology.
6th Pillar: Narratives & Numbers.
Final pillar: Cycles & Valuations.
• Economic cycle
• Market cycle
• Business cycle (v.imp)
• Growth
• ROE/ ROCE
• WACC
• CFO/ FCF
• EV in relation to cash, sales.
When the business cycle turns you need not worry about market cycle/economic cycle.
• Economic cycle
• Market cycle
• Business cycle (v.imp)
• Growth
• ROE/ ROCE
• WACC
• CFO/ FCF
• EV in relation to cash, sales.
When the business cycle turns you need not worry about market cycle/economic cycle.
For example, Economic cycle may suffer but pharmaceutical & chemicals doing well.
50% of your gain comes from a better understanding of the business cycle. If you get wrong with the business cycle you can't make money regardless of EC/MC
50% of your gain comes from a better understanding of the business cycle. If you get wrong with the business cycle you can't make money regardless of EC/MC
You can modify this framework according to your requirements, but you should have honesty, discipline and patience with your framework.
Stay away from the noise 🔊 and
think rationally.
[ End ]
Stay away from the noise 🔊 and
think rationally.
[ End ]
