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#charliemunger #BerkshireHathaway
#WarrenBuffett
#Apple

Why #WarrenBuffett missed the transformation from Hard assets to Soft assets , Why the legend never understood the transition to Software and it’s future and he underestimated the Internet to a very vast extent
It was 1997 and Warren was offered an opportunity to buy Microsoft stock and he said he believes MS story is pretty good in the short term , but he doesn’t see a great future in another 2 decades.
MS was trading at $16-18 at that times and has split thrice since then...
Berkshire purchased GEICO in 1995-96. It came to Warren’s attention that GEICO was paying $10 to search engine Google for every mouse click on GEICO ad
The cost of this service provided by Google was NIL
Warren couldn’t read the thesis behind this kind of income Google generated
He couldn't gauge whether Google had a durable competitive advantage or would be overtaken by rivals.
He himself had switched his loyalties from Alta Vista to Google but did not realise the potential of the Google business
Warren was never able to understand Amazon and Jeff Bezos , in fact he was busy buying traditional retail business like TESCO in 2006 and Kraft in 2015.
Warren and Berkshire though were aware of the progress made by Amazon till 2017
but it was #ToddCombs or #TedWeschler who purchased Amazon stocks for Berkshire Hathaway.
Warren had exposure to Amazon bonds between 2001 -02 till 2005-06. His exposure was on basis on Junk credit price it was available after dot com bubble burst
Warren started buying Apple in 2016 again at behest of Todd Combs and Ted Weschler
Since than Berkshire has been buying and occasionally selling Apple ended up net buying of $35 Billion and and now by 2020 is worth $122 billion which is 25 % value of entire Berkshire market cap
It took Berkshire decades to realize a $18 billion unrealized gain on its $1.2 billion investment in 9.4% of Coca-Cola
It took Berkshire only about one year to realize a $40 billion unrealized gain on its $36 billion investment in 5.4% of Apple

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Srinivasan G
@srinicaps
@AskRobinhood
#RobinhoodTraders #robinhood

The free stock trading app valued at $11.2 Billion is the hottest Stock broker in the world in 2020
With 10 Million active users and record 4.31 million daily average revenue trades recorded in June 2020
it’s clearly the Saas business of the year 2020.
But the big news is Robinhood “doesn’t charge fees”
It offers commission free stock, ETF and options trades
How does Robinhood earn its revenue if it doesn’t charge its customers to buy and sell and trade equities
Robinhood sells the retail order flow to high frequency traders (HFT) and Market Makers
Market makers make money on the spread between the bid and the ask
Market makers provide liquidity to the market, which means they take the other side of trades.
Read 9 tweets
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Srinivasan G
@srinicaps
The massive reset of the middle class in 2020 after #COVIDー19

#inflation #deflation #stagflation
#usfed #euro #dollars

Western countries are dealing with this crisis by increasing debts, increasing social spending and hence, ensuring the destruction of their currencies
and their bond markets and impoverishing the citizens along the way.
The destruction of the middle class allows governments to enact all sorts of dangerous policies because the middle class is really what rises up.
However, in other countries, mainly in Asia, Eastern Europe, and even Russia, they’re not handling this in the same fashion.
Many of these countries don’t even have social spending programs to the extent that the West does.
Read 7 tweets
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Srinivasan G
@srinicaps
#DividendInvesting
#dividends #yield

With interest rates depressed and likely to remain so for years, stocks with ample and secure dividends could benefit as investors search for yield.
One approach is to consider companies whose dividend yields nicely exceed their bond yields
This can be a good way to find high-quality stocks because low bond yields are often a sign of financial strength & dividend stability
The stock of any company whose safe dividend yield is materially higher than its own 10 year bond yield may have a compelling risk/reward profile
The approach doesn’t predict that a stock will outperform, but it has been very effective at identifying stocks with limited risk
Let’s take an example Johnson & Johnson (JNJ), whose dividend yield of 2.7% is more than double the about 1% on its 10-year debt.
Read 9 tweets

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