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5 Mar, 5 tweets, 2 min read
These are fantastic threads / perspectives for analysts to read - thank you.
On the art of the stock pitch
Some thoughts for analysts to reflect on
I really enjoyed this point. Everything is context specific, but this strikes me as a great way to increase creativity. The PM has time to think creatively. Another element is psychological safety. Great PMs own errors & deal with them effectively. Scared analysts aren’t helpful.
PM/analyst r’ships are multifaceted & different at each firm. Some great PMs see themselves as analysts. There are some amazing points in these threads to help analysts reflect on strengths, weaknesses & finer points beyond analysis. The best are constantly learning & improving.

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More from @AReviewOrTwo1

AReviewOrTwo Profile picture
28 Jul 20
It is important to learn the right lessons from both mistakes [commission & ommission] & things that go well. I often find people focus their learning on mistakes & less on the latter or learn the wrong lessons or see patterns that don’t exist

Some thoughts on trying to learn...
1/ Missing out on something with a high optical valuation... the lesson is usually not ‘be willing to pay any price’ or ‘quality at any cost’ it is ‘why were your numbers / expectations too low’, ‘what did you miss about the business’
2/ When you lose money because something bad happens to the fundamentals, try to break things down:
- Was there a mistake of analysis before buying?
- Did you miss a change after you bought?
- Was it a portfolio mgmt error in not cutting & putting capital elsewhere?
- Bad luck?
Read 10 tweets
AReviewOrTwo Profile picture
18 Jun 20
15 things that I think about when trying not to sell a good L-T idea:

1. Be prepared to give up P&L in the S-T, L-T winners are often volatile

2. Monitor consistency between narrative & fundamentals. Imagine the destination & the key drivers. Use patterns to help navigate
3. Understand why something is persistently mispriced (confidence in a mispricing means you are less likely to sell)

4. Have a well balanced portfolio of great cos, never let a position become so big it owns you / can take you out of the game
5. Form independent views and rigorously test your thinking by yourself, a lot of people will have opinions about the future without knowing much about a situation, you need a strong filter... sometimes not listening is a good thing...
Read 11 tweets
AReviewOrTwo Profile picture
20 May 20
Uniqueness, hard to replicate / imitate is such an important concept...
Helmer: There must be some aspect of the Power conditions which prevents existing & potential competitors, both direct & functional, from engaging in the sort of value-destroying arbitrage Intel experienced with its memory business. This is the duration aspect of Power [7 Powers]
Kay: Successful strategy is rarely copycat strategy. It is based on doing well what rivals cannot do or cannot do readily, not what they can do or are already doing. [Foundations of Corporate Success]
Read 5 tweets
AReviewOrTwo Profile picture
21 Dec 19
Good analysts don’t just consume a lot of detail in an academic fashion. They build knowledge in a purposeful, strategic way... some of the things they do include:
- Identify critical biz drivers & pressure points / risks
- Weight the most important information correctly
- Understand how management think, what they want & what they are motivated by
- Always benchmark their views to the expectations they believe are discounted in the price
- Form independent views from a variety of sources
- Are creative in how they think (both in how they think about research & how they think about a company or industry)
- Filter out ideas quickly (eg based on risk / downside, circle of competence or lack of an expectation gap)
Read 13 tweets
AReviewOrTwo Profile picture
18 Dec 19
In trying to find L-T winners, I try to think about the following features [non-exhaustive]...you might only realize that these features are present after you own the co & know it better...features are easier to identify in hindsight, but the present often feels more uncertain
1) A company creates value for customers in a way that others find hard to replicate [in particular I have enjoyed reading @bradsling on NZS and whether it would matter to customers if a bomb fell on the company's HQ]
2) A company can capture a portion of that value in economically profitable business model, but still leave significant customer surplus on the table
Read 7 tweets
AReviewOrTwo Profile picture
5 Sep 19
Assessing mgmt isn’t a science & often access is limited. Look for thoughtfulness. Look for people you can tell are not motivated just by money. Is there an entrepreneurial culture? Look for people who think long term. Lots of mgmt teams will say the right stuff, but is it true?
Reading the transcripts, CEO interviews, CEO letters, presentations on YouTube and other company materials, attending a few meetings, studying the company history etc should be enough to start to get a feel for whether you like management or not.
Some questions to think about...
Read 27 tweets

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