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.
-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

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More from @RamBhupatiraju

20 Dec
Pretty good and simple document on Research Methodology used by Davis Funds. 👏

✔️Characteristics of great businesses
✔️Evaluating Management
✔️Ideal way of valuing Businesses (Owner's Earnings) ✔️Selling discipline

cc: @Gautam__Baid @dmuthuk

davisetfs.com/documents/ETFR…
Good Flowchart.

Bottom-up analysis of Companies, while being aware of Top-down (Trends/Views) is extremely important these days.

davisetfs.com/about/investme…
Methodology. Many similarities with the frameworks of Buffett, Chuck Akre, Terry Smith etc..
Read 6 tweets
18 Dec
Time for a Scorecard📊and thesis📑updates for purchases done in Feb/Mar 2020. Last review done in late April. How far things have come since then.😯

Not taking any drastic actions, other than few sells in fully valued, slower growth Co.'s.
Events since then
✔️Co's reporting two Qtrly reports
✔️Accelerating growth for few sectors
✔️Understandable problems for few others
✔️Crazy run-ups & valuations in the last 9 mo's, supported by biz growth in some cases, but mostly due to Monetary factors & Investor enthusiasm...
I usually buy for two scenarios

1⃣Leading Co's within strong secular trends, that also have strong Management Teams and solid Financials (Rev growth, Profitability or improving Margins/FCF prospects, no balance sheet risk...).
Read 13 tweets
17 Dec
Excellent article by @CBinsights on #SPACs. 👏

✔️The basics
✔️Why now? For Private Companies & Investors
✔️Challenges & concerns
✔️Looking ahead

The article clarified few things well for me.👍

cbinsights.com/research/repor…
How it works👇
Benefits (in the ideal case of course) for the parties involved 👇
Read 10 tweets
16 Dec
Good refresher document on
✔️Basics of the three Financial statements
✔️Financial Statement Analysis (cross sectional & time-series based)
✔️Financial Ratios & correlations
✔️DuPont Analysis, ROE & components.

This stuff matters in normal Markets.😉

pearsoncanada.ca/media/highered… Image
Balance sheet 👇 Image
Income Statement 👇 Image
Read 7 tweets
14 Dec
Nice article on "5 Investing Gems from Peter Lynch I Wish I’d Known Earlier".

medium.com/live-your-life…
1⃣ Investing Is an Art, Not a Science

2⃣ When in Doubt, Tune in Later

3⃣It Takes More Than One Great Product for a Company to Be Worth Investing In

4⃣ Be Suspicious of Co's With Growth Rates of 50–100% a Year (see details)

5⃣ Companies That Have No Debt Can’t Go Bankrupt
Few pts I liked in each.

1. Investing Is an Art, Not a Science

"You need to be disciplined and patient and have the ability to remove emotion from your decision making.

Understand the nature of the companies you own and the specific reasons for holding the stock.
Read 13 tweets
13 Dec
Excellent blog with Book Reviews and some long-form essays. h/t @DuaMandhir 👏

cc: @dmuthuk @Gautam__Baid

Thread below with some of my fav books/reviews. ⬇️

mandhirdua.com/book-reviews?b…
The little Book that builds wealth - Pat Dorsey

mandhirdua.com/book-reviews/f…
The Most Important Thing - Howard Marks

"Success in investing lies in having a contrarian approach to understand value, risk, cyclic nature of markets and most importantly human psychology".

mandhirdua.com/book-reviews/f…
Read 9 tweets

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