Thread by @RamBhupatiraju

Thanks Irnest. My investing philosophy is that we need to start with good first principles/frameworks like the ones in that document, but then adapt it to the current Business/Market environment.

Few random thoughts on this in the thread below.

https://twitter.com/IrnestKaplan/status/1340595097503723520

-Valuing CO's that are going for growth instead of Profitability when there's lot of opportunity to be captured yet.

-Intended lack of Profitability (in many cases) causing over-valuation of (or negative) Earnings based metrics.

-Co's investing mainly thru Income statement (R&D, S&M) to grow and create value rather than Balance sheet (Hard Assets, CapEx)

-Importance of Intangibles and other metrics not captured by Accounting (Mgmt Quality, emerging Moat, Culture....)

-Trying to fit these type of CO's into the old Accounting/Valuation box doesn't fully work. So in my opinion, this topic has become a lot more nuanced and subjective.

I'm not defending every unprofitable & over-valued Company out there 🙂, just pointing out that the current GAAP standards do not capture the true Economic value being created by some great Co's out there, and that's an area of opportunity for investors who can dig deeper.

/END