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Brandon Beylo

@marketplunger1

7 Jun

I've seen many folks complain that they haven't found great ideas lately (some even 1YR+).

That's just not true if you venture outside the US.

But that's scary.

Here's what you do: find simple businesses

For example, Stock Exchanges

THREAD: 6 Stock Exchange Ideas

1/ Why Stock Exchanges?

Stock Exchanges are simple business that don't change (too much) depending on geography.

Plus, they're predisposed to monopoly/network-effect benefits as more people use a specific exchange.

Also, exchanges are as old as the 17th century (Lindy).

2/ Hong Kong $HKEX/388

World's largest exchange by market cap and and listed companies.

Stats:

- 96% GM
- 73% EBIT margin
- Almost no share dilution
- HK gov't largest shareholder (don't want to see it fail)
- 30% ROC
- 40x Normalized Earnings

Read 9 tweets

Brandon Beylo

@marketplunger1

20 May

1/ “We can have no finer role model. He was a value investor — a member of that eccentric tribe that believes it’s better to underpay than to overpay.”

This thread reveals the story of the greatest value investor you've never heard of.

The story of Floyd Odlum.

THREAD

2/ With a decent income from his job as a law clerk, Odlum started trading in the stock market. He initially saw the market as a rich, fertile ground for speculative profits. Far from his cemented legacy as a deep value investor.

3/ Yet like most beginning speculators, Odlum too paid his fair share of market tuition.

After losing all his $40,000 starting capital, Odlum retreated from the markets. One newspaper revealed it, “took [Odlum] a while to pay back that sum”.

Read 24 tweets

Brandon Beylo

@marketplunger1

20 May

Some quick thoughts for new investors about writing up a new idea:

When I first started investing (and still sometimes do today) I wanted to write everything down about a stock.

Every data point on paper.

Yet this brain-dump removed the LEARNING from "learning the biz"...

The more I asked other investors about their processes, the more I realized they spend less time "data dumping" and more time deeply thinking.

I know, it sounds pithy.

But these are my favorite investors. What did they know that I didn't?

Answer: The power of compounding..

Here's what they (generally) do.

The best investors I know slowly accumulate knowledge on a company or industry (months, years, etc.).

Then, when a new idea surfaces, they leverage all that compounded knowledge and the actual act of writing the idea becomes effortless.

Read 5 tweets

Brandon Beylo

@marketplunger1

13 May

There aren’t many investors compounding capital at double digits over the course of decades and those that do are already well known (i.e., that guy from Omaha). However, in a small office above a taco shop, a man did just that.

[THREAD]

Allan Mecham ran a hedge fund called Arlington Value who has demonstrated the advantage in simplicity, long-term thinking, and the power of compounding.

Arlington Value doesn’t have a large team of analysts.

They don’t run advanced machine-learning algorithms or exploit esoteric satellite data and there’s not a single distinguished diploma on their walls.

Read 11 tweets

Brandon Beylo

@marketplunger1

12 May

@bgurley

Reading this 2003 blog post from @bgurley on Internet-based businesses and how many investors threw every dot-com business out with the bathwater.

Gurley offered 4 reasons why some companies worked when everyone thought they wouldn't.

[THREAD]
abovethecrowd.com/2003/04/23/dot…

1) They weren’t bad ideas:

"In fact many were good ideas. Were there too many consumer startups? Yes! But there were also too many software companies, semiconductor companies, telecom equipment companies, and the list goes on and on.

As we later learned, over-funding (i.e., too many startups with too much capital) was the key issue, not the particular investment category. Low-cost, high-scale marketplaces do in fact exhibit increasing returns.

Read 9 tweets

Brandon Beylo

@marketplunger1

12 May

Successful investing is an active rebellion against one’s instinctual proclivity to sabotage long-term returns.

In a perfect world, investing is like gardening. You cut the weeds (losers) and water you flowers (winners).

In practice, investors do the opposite.

We tend to sell winning stocks too early (cutting the fruit) while desperately clinging to losing positions (watering the weeds).

This habit is called the Disposition Effect.

Coined by Shefrin and Statman in 1985, the Disposition effect explains the tendency for investors to cut their winners short while riding their losers lower.

It’s an academic way of saying, “most investors suck.”

Read 4 tweets

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