Thread by @RamBhupatiraju

2⃣0⃣2⃣0⃣ Execution Champions.🏆

Some businesses that have been a delight to watch this year.

What other biz surprised you with their resilience, execution & results this year?
@saxena_puru @BrianFeroldi @FromValue @TMFJMo @JonahLupton @7Innovator @adventuresinfi @7AustinL

Portfolio positions in dotted lines, while the rest are from my Watchlist.

Keeping aside the day-day price movements & arguments about their valuations, we have to zoom out & appreciate how well these Co's adapted, executed & delivered outstanding business results this year.

Some Businesses like followed by , , , delivered some of the best qtrly results we'll ever see.

Other Businesses like , , , picked up a lot of users that will be effectively monetized in the future.

Some Businesses are having an incredible product development velocity like , , separating themselves from their competitors.

Overall it's incredible to watch these businesses execute and be a long-term shareholder in many of these.

Valuation is important, but we've to understand the various nuances.

1) High Quality business are usually not available for cheap (backward looking multiples) most of the time, unless there's a panic or severe (but temporary) earnings disappointment.

2) If the Quality/growth/leadership/opportunity holds up or expands, the current expensive valuations might look cheap for investors that can withstand volatility and hold for the long term.

3) Valuations do not always capture the business reality (when the current spend is going to result in huge Rev/Mkt share growth soon, a COVID type situation pulling forward the demand, increased consumer awareness w/o having to spend on CAC, improved LT growth trajectory...)

For long term investors in individual stocks, it's beneficial to observe the major/sustainable trends happening in the world (Technological/Demographic/Regulatory....) and their positive or negative impact on various sectors you're interested in.

Sometimes the past operational performance and current Financial statements of a Company are a reliable indicator of the intrinsic value of a Co, but if the Co is not in a stable environment (most are not), or able to successfully adapt to trend changes (many are not able to) ..

...making investment decisions based purely on the past information can be really dangerous.

Mean reversions to the upside do not automatically happen with time, if the underlying Business cannot keep up with the times.

Similarly mean reversion to the downside do not need to automatically happen if the Company continues to be a leader in a growing TAM and led by outstanding Management.

There will always be Co's worth paying up for, Co's we need to be more cautious w.r.t valuations, and Co's that are not worth buying no matter how cheap they appear.

It depends a lot on the exact Co, it's future, and the investor's research, conviction and time horizon.

Investing is about the future. Co's that remain relevant, innovate and continue to deliver meaningful value to their customers in that future will thrive. The ones that can't will continue to reminisce about the glorious old days and that is not where I want my $ invested.

/END