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22 Oct, 8 tweets, 3 min read
Murata (6981) is the world’s largest producer of multi-layer ceramic chips (MLCCs) with over 40% market share.

Bull thesis: The company’s main revenue source (MLCCs) will see a demand explosion from two sources: EV and 5G

Here's what you need to know 👇
macro-ops.com/murata-manufac…
1/ The MLCC Demand Boom is Coming

- Required no. of MLCCs went from 3K in 2012 to 8K in 2018

- EV Batteries will require 30K MLCCs

- Smartphones will need 1.5x more MLCCs in 2024 than today

- MLCC supply will be 6x higher (6.1 trillion!) by 2025

Here's what MLCCs do ... ImageImageImage
2/ Murata: The Best Way To Play The Demand Surge

- Started w/ $102K in capital, now does $14B in revenues

- 40% Share of Global MLCC market

- Churns out 150B MLCC pieces per month

- 77K employees and 92 subsidiaries around the globe

There's three reasons Murata will win ...
3/ First Mover & R&D Advantages

Murata wins two ways:

1) 92 subs and thousands of customers provide insight other companies can’t get. They spot trends and potential product failures before anyone else.

2) 40% Mkt share allows Murata to spend more on R&D w/ less % of revs Image
4/ Monozukuri: Everything In-House

Murata does everything in-house. From raw material sourcing, sheet casting to sintering and inspection/packaging.

Why this is important:

- Their global reach and scale, Murata can solve customer needs faster/cheaper than competitors Image
5/ Valuation & Exponential Growth

- Murata's a model of consistency: 30% GM, 12-17% EBIT margins, profitable. But inventory/accts. rec. have sucked cash-flows last year.

- The current stock price assumes low (~5%) revenue growth till 2025.

- Mr. Market doesn't see EV/5G Image
6/ Risks

There's a few major risks with the Murata bull thesis:

- Rise in China-owned MLCC production
- Increased demand from alt. capacitors (aluminum, tantalum)
- Inability to correctly anticipate customers' needs
- Economic recession = less capex in EV & 5G
7/ Long-Term Stock Chart

One more thing ... the monthly chart is *tantalizingly* bullish. If we get a monthly breakout into new ATH we could really see this thing move. Image

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Brandon Beylo Profile picture
17 Sep
[THREAD]

GoodRX $GDRX filed their S-1 earlier this week.

I read It so you don't have to (but you should).

Here's a thread on what I found interesting, fascinating and down-right incredible from the company.

I'm starting at zero: sec.report/Document/00011…

cc: @saxena_puru
1/ High-level Facts & Figures:

- #1 most downloaded medical app

- 4.9M Monthly Active Users

- 80%+ Repeat Activity

- $20B+ in Consumer Savings

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Mission: To help Americans get the healthcare they need at a price they can afford.

So far it's working (really) well.

The company estimates 18M of their customers could NOT have afforded to fill their Rx without the company's savings tools.
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Brandon Beylo Profile picture
24 Aug
[THREAD]

Unity (prop ticker: $U) filed their S-1 this AM.

I read the filing so you don't have to (but you should).

Here's a thread on what I found interesting, fascinating and down-right incredible from the company.

I'm starting from zero.

Join me: sec.report/Document/00011…
1) High-level Facts & Figures:

These high-level stats impressed me (cc: @ballmatthew ):

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Power to the creators.
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Brandon Beylo Profile picture
7 Aug
[THREAD]

5 Signs We *Might* Be In An Equity Bubble.

Thought-provoking piece from the wicked-smart fund manager Gary Mishuris.

Here's a thread on the five signs Gary sees in this potential market bubble ...
forbes.com/sites/garymish…
Sign #1: "Stocks are bought based on belief and not thorough analysis"

- It's not enough to believe. At some point your beliefs need to be backed by thorough analysis and numbers.

- Great resource for this numbers to narratives (ht @AswathDamodaran):
Sign #2: "A narrow group of companies or business models is perceived to be so valuable that any company that is seen as belonging to this group is valued at extraordinary levels"

Today's examples:

- Any SaaS business
- E-commerce
- Online retailers
- Telemedicine
- SPACs
Read 6 tweets
Brandon Beylo Profile picture
4 Aug
[THREAD]

Academics and financial institutions praise complexity.

More complex models. More complex theories.

Unfortunately the real world doesn't reward complexity.

It rewards simplicity.

So, it pays to keep things simple in markets.

Here's how: macro-ops.com/ruthless-reduc…
1/ Ruthless Reductionism

Reduce your investing/trading plan to a few key variables.

These key variables drive your strategy's returns anyways (thanks, Pareto).

The more complex your plan/strategy, the more ways it can go wrong.

Markets reward robustness, not fancy models
2/ What Does Reductionism Look Like?

Reductionism will look different for each trader/investor.

Investors:

- Less-complicated DCF models
- 1 or 2 main drivers of the thesis
- Clear biz risks

Traders:

- Fewer indicators
- Less lines drawn on a chart
- Fewer trades
Read 8 tweets
Brandon Beylo Profile picture
17 Jul
[MEGA THREAD]

Competition is for Losers by @peterthiel

Thiel discusses five important ideas:

1. Capturing Value
2. Lies People Tell
3. How To Build a Monopoly
4. Last Mover Advantage
5. History of Innovation
6. Psychology of Competition

Let's dig in!

bit.ly/32nKk1q
1) Capturing Value --

Lesson: If you have a valuable company, two things are true:

a) Create X dollars of value for the world
b) You capture Y% of X

What people miss: X and Y are completely independent variables.

Google - smaller market/larger value
Airlines - inverse Image
1b) Perfect Competition

Pros:

- Easy to model
- Efficient in static world
- Politically Stable

Cons:

- Psychologically unhealthy
- Irrelevant in dynamic world
- Preempts question of value

What we're told: You want competition in society and it's a GOOD thing.

But is it? Image
Read 22 tweets
Brandon Beylo Profile picture
23 Jun
[THREAD]

J.P. Morgan released a 100+ page CIO survey.

The theme: Cloud Computing & Digital Superpowers

I read it so you don't have to.

(H/t to @saxena_puru for covering some of these stocks)

Here's a thread on what I found interesting ...

Link: docdroid.net/RXHexts/jpm-ci…
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- Spending on Oracle $ORCL expected to drop nearly 9% in 2020
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