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Brian Feroldi

@BrianFeroldi

6 Nov

1/ What is the 'Dow Jones Industrial Average'? (Thread)

In 1896, Charles Dow was an editor at The Wall Street Journal

There wasn’t an easy way for Dow to recap the market’s daily moves. Some stocks were up, others were down

He asked his business associate Edward Jones for help

2/ Edward Jones was a statistician. He helped Dow invent a solution.

Dow and Jones added up the share price of the 12 most popular companies, many of which were industrial stocks.

The total was then divided by 12 -- or averaged

The 'Dow Jones Industrial Average' was born

3/ On May 26, 1896, the average price of the original 12 Dow Jones Industrial Average stocks was $40.94.

Using price as a measuring stick made calculating the average easy (no computers at the time)

This is why the Dow is called a 'price-weighted index'

Read 9 tweets

Brian Feroldi

@BrianFeroldi

5 Nov

https://twitter.com/BrianFeroldi/status/1324324314053791744?s=20

1/ Part 2 - Is this company high quality?

Take score from part 1:

https://twitter.com/BrianFeroldi/status/1324324314053791744?s=20

Then we subtract scores for big risks in the 'gauntlet'

Max gauntlet score -54

Here's the step-by-step process

👇👇👇👇👇👇👇👇👇👇

2/ Gauntlet

Accounting Irregularities

-10

(maybe it should be -50)

3/ Gauntlet

Customer concentration

(pull up annual report and search "concentration")

-5: >20% of revenue from 1/few customers

-3: >10% of revenue from 1/few customers

0: No customers >10% of revenue

Read 17 tweets

Brian Feroldi

@BrianFeroldi

5 Nov

1/ Is this company high-quality? (Thread)

Many factors to consider -- why checklists are amazing!

Here's my step-by-step process for figuring that out

👇👇👇👇👇👇

2/ Score overview:

2 step process

Step 1: 100 points total, weighed by importance

Categories & max score:
Financials: 17
Moat: 20
Potential: 18
Customers: 10
Revenue: 10
Mgmt/Culture: 14
Stock: 11

Step 2 will be covered in another thread (I ran out of tweets)

3/ Financial:

Q: All things equal, would you rather have a cash-heavy balance sheet or debt-heavy?

A: Cash-heavy

0 - 5 possible

0 - tons of debt, 0 cash
1
2
3
4
5 - tons of cash, 0 debt

Read 25 tweets

Brian Feroldi

@BrianFeroldi

3 Nov

Why did I invest in $SDGR? (Thread)

Business model:

1⃣Software: 1,300+ customers - enables rapid discovery of new molecules for drug development & materials

2⃣Drug discover: >25 collab programs AND a wholly-owned pipeline

3⃣Equity in other biz

1⃣Software biz:

Use software to create new compounds

237 BILLION compounds explored in software in 1h 2020

Uses AI to drive faster, cheaper, higher quality molecules/drugs

35% rev growth in 1h 2020
82% gross margin
Top 20 pharma cos use software, average of 15 years

2⃣Drug discovery

Lots of drugs in development w/ partners

Milestone/royalty payments

Read 14 tweets

Brian Feroldi

@BrianFeroldi

1 Nov

@themotleyfool

Boosting your salary is a great way to turbo-charge wealth building

Here's the good news: Your salary is negotiable!

@themotleyfool and @ChooseFi have some AMAZING free resources for scoring a big raise:

Use them!

👇👇👇

@ChooseFi

.@ChooseFi resources

choosefi.com/023-career-hac…

choosefi.com/negotiate-your…

choosefi.com/how-to-negotia…

@themotleyfool

.@themotleyfool resources:

fool.com/careers/2018/1…

fool.com/careers/2017/1…

fool.com/careers/2019/1…

fool.com/investing/gene…

fool.com/careers/2018/0…

Read 4 tweets

Brian Feroldi

@BrianFeroldi

31 Oct

When I started "investing" in 2004 I had no idea what I was doing

I couldn't tell you ANYTHING about a balance sheet, income statement, management...nothing!

To prove just how bad I was, I looked up the first stocks I bought in 2004-2007

Here's how it went...

👇👇👇👇👇

Stock #1 - $STEM

I heard stem cells were going to be big, so I bought this penny stock

The ONLY thing I knew was the ticker - That's it!

I sold it for a 20% gain in a few months

My feelings: Investing is easy!

Stock #2 - $DIGI

Another penny stock -- I couldn't tell you ANYTHING about this company either

Bought for $1.40 -- sold 1 month later a 5% loss

My feelings: Investing is still easy!

(currently about $0.10 share, down 90%)

Read 21 tweets

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