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Durable Investments Profile picture
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4 Apr, 5 tweets, 1 min read
"If you risk something that is important to you for something that is unimportant to you, it just does not make any sense."
"If you hand me a gun with a 1000 chambers in it, there's a bullet in 1 chamber, and you said 'Put it up to your temple, how much do you want to be paid to pull it once?' I'm not going to pull it."
"You can name any sum you want but it doesn't do anything for me on the upside and I think the downside is fairly clear. I'm not interested in that kind of a game"
"If you think you are going to be a lot happier if you have got 2X instead of X, you are probably making a mistake."
"You'll get in trouble if you think that making 10X or 20X is the answer to everything in life"

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More from @retaox

Durable Investments Profile picture
6 Apr
$BTI

There are 1.1 Billion smokers in the world. And 5 Trillion cigarettes consumed annually, generating $700B in revenue per year for the industry.
660B of those cigarettes are sold by $BTI to over 150M customers.
US Brands : Newport, Camel, Natural American Spirit
Global Brands : Dunhill, Kent, Pall Mall, Rothmans, Lucky Strike

Goal is to invest and grow non combustible products as fast possible while maintaining a 65% dividend payout ratio and less than 3x debt to ebitda ratio.
How's their current global positioning in non-combustible products?

Heat Not Burn : Glo is #2 in the world after IQOS.
e-vapor : Vuse is #1 after JUUL fiasco.
Oral : Velo is #1 outside US. 10% market share in US.
Read 15 tweets
Durable Investments Profile picture
23 Mar
Every single time my wife opens an $ETSY package, she sees a handwritten note from the seller. She goes "Awww. That's so sweet" and she posts a picture of the note along with the item on her IG stories. The number of times she has done that with an $AMZN package : 0.
Thesis : Internet has democratized entrepreneurship. That's the theme of last 2 decades and it's going to be the theme for next 2 decades as well.
That's a change I guarantee will never revert. $EBAY $AMZN $SHOP $FB continue to contribute and benefit from this theme.
All of them have carved their niches and so has $ETSY. Every one I know dreams of running a self sustainable business and $ETSY makes it possible by giving sellers a increasingly global audience. It gives buyers a wider selection of personalized items.
Read 10 tweets
Durable Investments Profile picture
22 Mar
$ADSK was THE software to learn when I was growing up. My dad showed off CAD to me 20 years ago when his employer was building a textile factory back in India.
The learning curve and high switching costs, combined with $ADSK's iteration on old products and introduction new products to students for free produces a wide moat and strong momentum in the user base.

Informative podcast :
*
In the short term, their move into subscription/cloud model, might provide much more predictable revenues.

Looking at growth numbers :
* Revenue grew from $2.2B to $3.8B at 5.6%
* Gross profits from $2B to $3.4B at 5.5%
* Free cash flows from $510M to $1.3B at 10%
Read 10 tweets
Durable Investments Profile picture
20 Feb
"This is the key part of Warren Buffett’s philosophy that folks overlook. He talks a lot about return on retained earnings. Whether keeping an extra dollar in a business tends to result in an extra dollar being added to the market cap."
Good read!
"Don’t confuse how fast a car is moving at this instant with how much distance it’s covered in the past hour"
"
The past average is just the past average. It is not the same as what the company will earn on the next dollar of capital it puts into the business.

But it can be used as a guide. Especially for wide moat businesses."
Read 5 tweets
Durable Investments Profile picture
18 Feb
"If you buy into a leveraged company & it deleverages over the next 10 yrs, your returns would be very poor compared to what you'd expect, they'd be much lower than the business. Let's say you are paying a 5% interest rate on your bonds/loans, you're paying like 4% after tax."
"If you have a company, and they take 3/4/5 years in a row of free cash flow & dedicate most of it, while you own the stock, into paying down that debt, it's the same as if they went out & invested in a project that returns 4% after tax"
"It's hard to think of anything that's as unprofitable as paying down debt. Paying down debt is a very very low return use of cash, except for companies that are super heavily indebted and have incredibly high interest rates."
Read 6 tweets
Durable Investments Profile picture
17 Feb
$CVS 2021 guidance -->
Cashflow from operations : $12B
Capex : $3B
Adjusted operating income across segments :
* Health Care Benefits : $5B
* Pharmacy Services : $6B
* Retail/Long-Term Care : $6.5B

3 segments of almost equal size.

Cue the cross selling / flywheel slide.
After Aetna acquisition, leverage ratio is now at 4x. Goal is to reduce it to 3x by 2022.

"We've hit the 2021 run rate and the synergies are fully embedded in the business."
"Millions of new customers will engage with CVS Health for the first time through testing and vaccine administration services. We will use this opportunity to shape a health experience that demonstrates the value we bring."
Read 11 tweets

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