Investing thought experiment, but do the math:
Take the financials of these businesses, but depreciate R&D over 10 years and look at what happens to GAAP earnings. Do the same math over different depreciation periods.
Datadog (DDOG)
OKTA
Pagerduty (PD)
Crowdstrike (CRWD)
Take the financials of these businesses, but depreciate R&D over 10 years and look at what happens to GAAP earnings. Do the same math over different depreciation periods.
Datadog (DDOG)
OKTA
Pagerduty (PD)
Crowdstrike (CRWD)
2/ What's the useful life of Shopify's software? Expense R&D costs immediately? Seriously?
What's the useful life of Docusign's software? One year or less? Are you joking?
Over what period should Stripe's software be depreciated? Expense it immediately? That's coconuts!
What's the useful life of Docusign's software? One year or less? Are you joking?
Over what period should Stripe's software be depreciated? Expense it immediately? That's coconuts!
3/ Charlie Munger: "Everyone can see that you have to more or less just guess at the useful life of a jet airplane or anything like that. Just because you express the depreciation rate in neat numbers doesn’t make it anything you really know.” jamesclear.com/great-speeches…
4/ If only there was another way to value a business. Wait! The value of a business is the present value of free cash flow.
"Companies are valued not on their percentage margins, but on how many dollars they actually make, and a multiple of that.” Bezos 25iq.com/2014/04/26/a-d…
"Companies are valued not on their percentage margins, but on how many dollars they actually make, and a multiple of that.” Bezos 25iq.com/2014/04/26/a-d…
5/ "I'd go to shareholder meetings and someone would ask about earnings. I’d say, ‘You're in the wrong meeting.’ If you start generating earnings it means you’ve stopped growing and the government is now participating in what should be your growth metric.” 25iq.com/2014/11/02/a-d…
• • •
Missing some Tweet in this thread? You can try to
force a refresh
