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Brian Stoffel

4 Aug, 11 tweets, 4 min read

@nntaleb

Five years ago, after reading @nntaleb's *Antifragile*, I developed a framework for identifying Antifragile companies.

In the past three months, @BrianFeroldi and I have put 23 different companies through that framework.

Here's how they scored, a 🧵⤵️

A quick caveat:

Before 2020, 7 companies had been defined as "Antifragile". Since Jan 1, 2020:

* All 7 have beaten the S&P 500's 41% returns
* The average return is 150% (+109 points)

Why this matters: 2020 was the first "chaos" to measure anti-fragility at scale.

One more caveat:

* A low score doesn't = BAD INVESTMENT. There are tons of false negative.

I'm willing to accept that, because (historically)

* A high score has always = market-beating performance

Keep that in mind, as we go through the three levels.

Companies are evaluated on a scale.

FRAGILE = score below 7.0. These are companies I won't invest in.

ROBUST = score between 7.0-12.0. I consider all of these for investment.

ANTIFRAGILE = score above 12.0. If I don't already own these, I ask myself why...

FRAGILE STOCKS
AMC Theaters $AMC - 1 point
Celsius $CELH - 3 pts
AppHarvest $APPH - 4 pts
Yeti $YETI - 6 pts
Sofi $SOFI - 6 pts
ContextLogic/Wish $WISH - 6.5 pts

Again, lots of false negatives. Remember that before letting your blood pressure rise 🧘🧘‍♂️

ROBUST STOCKS
Upstart $UPST - 7 pts
Palantir $PLTR - 7.5 pts
Nio $NIO - 8 pts
Robinhood $HOOD - 8 pts
Spotify $SPOT - 9.25 pts
Coinbase $COIN -10 pts
Clover Health $CLOV - 10 pts
Roku $ROKU - 10 pts
Fiverr $FVRR - 10 pts
Coupang $CPNG - 10.5 pts
Peloton $PTON - 11 pts

ANTIFRAGILE STOCKS
Zoom $ZM - 12.5 pts
Airbnb $ABNB - 12.5 pts
Pinterest $PINS - 12.75 pts
Crowdstrike $CRWD - 13 pts
Tesla $TSLA - 13.5 pts
Sea Limited $SE - 13.5 pts

The actual numbers are helpful, but THE PROCESS of finding them is what really matters. I don't blindly buy anything.

For instance: I don't own $PINS b/c I don't like when customers don't = users

And I have considered buying $UPST b/c I'm getting more comfortable with the risks

@Brian_Stoffel_

If you want to learn more about this framework, follow me (@Brian_Stoffel_ ) and watch this video which was made as a primer:

@BrianFeroldi

There's ~10 minute video for EACH ONE of these 23 stocks.

6 FRAGILE stocks
11 ROBUST stocks
6 ANTIFRAGILE stocks

You can see each one from the site @BrianFeroldi and I have here (it's ALL free!).

Subscribe and you'll get ~two new ones each week.

youtube.com/c/BrianFeroldi…

And if you want to download the framework yourself, you can choose the price (including FREE) here...

brianferoldi.gumroad.com/l/zWXye

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More from @Brian_Stoffel_

Brian Stoffel

@Brian_Stoffel_

25 Jun

The 9 Most Anti-Fragile Companies I've Evaluated

(That are still under $100 billion)

Largest to smallest, those 9 are:

1) Airbnb $ABNB - $94 B
2) Mercadolibre $MELI - $77 B
3) Atlassian $TEAM - $67 B
4) CrowdStrike $CRWD - $58 B
5) DocuSign $DOCU - $54 B
6) Peloton $PTON - $37 B
7) Datadog $DDOG - $33 B
8) Unity $U - $32 B
9) Axon $AXON - $11 B

Seven of these companies have been public since January 2020 -- capturing the chaos of the pandemic that "Antifragility" is built for.

Their average returns: 230%
The S&P 500's: 32%

What do all of these companies have in common?

8 things👇

Read 14 tweets

Brian Stoffel

@Brian_Stoffel_

22 Jun

14 Books That Changed My Life 📘

(and what I learned from each of them)

@Read_Ishmael

1/

The *Ishmael* series by Daniel Quinn (@Read_Ishmael)

* We were optimized for hunting/gathering
* The way we live is evolutionarily odd
* Every culture has a story, but few identify the story they're enacting.

Also, *Story of B* and *My Ishmael*

amazon.com/Ishmael-Novel-…

@nntaleb

2/

The Incerto by Nassim Taleb (@nntaleb)

* Randomness over power of stories (Fooled by Randomness)
* 1% of inputs = 99% of output (Black Swan)
* How to be thrive in uncertainty (Antifragile)
* No opinions without risk of loss (Skin in The Game)

amazon.com/Incerto-Fooled…

Read 19 tweets

Brian Stoffel

@Brian_Stoffel_

15 Jun

There are lots of ways to "win" as investor.

Focusing on valuation is one of them. But you have to be really:
* Smart
* Willing to put in lots of work
* Aware of what market is doing daily

My approach:

I PAY ZERO ATTENTION TO VALUATION.

It's worked. The proof & thinking 👇

What I look for are ANTIFRAGILE companies.

They all:

* Use the Barbell Method (Mission, Moat, Optionality)
* Have Financial Fortitude (Balance Sheet, no Concentration)
* Have Skin in the Game (Founder, Ownership, Glassdoor)

If they have these 3, I don't worry about valuation

The basic idea:

When chaos hits, ppl in real world don't care about valuation of a stock.

* Schools: $ZM will help us with COVID (no one cares about stock price)

* Citizens: Our police need to use $AXON (no one cares about stock price).

Some real examples from my port

Read 14 tweets

Brian Stoffel

@Brian_Stoffel_

12 Jun

Last week, I talked about the Antifragile Framework for investing.

The biggest question, by far: What about VALUATION?

It's not in the framework.

But before I explain why, there are 6 things you need to know about ANTIFRAGILITY and PREDICTING the future. A 🧵

1/

We often take what's recently happened, and project that into the future without end.

That makes sense. 99.9% of the time, you'll be right.

The same was true for our ancestors. NOT doing this would have led to extinction as hunter-gatherers

2/
But 0.1% of the time, you'll be wrong. (Black Swans)

Imagine how WRONG your predictions would've been on:

* October 23, 1929 (Black Thursday)
* December 6, 1945 (Pearl Harbor)
* Summer 1990 (Fall of USSR)
* September 10, 2001 (9/11)
* New Year's Day 2020 (COVID)

Read 12 tweets

Brian Stoffel

@Brian_Stoffel_

8 Jun

@nntaleb

Six years ago, I read @nntaleb's *Antifragile*. The lessons invaded my brain and haven't left since.

I started taking the ideas and applying to investing.

I created a framework for stock picking from it. It has 8 parts

It has roughly 4X'd the market.

How it works, a 🧵⤵️

Before I tell you those eight, a quick note on what Antifragility is.

According to Taleb, the world can be broken into 3 parts:

*FRAGILE: breaks under pressure
*ROBUST: stays same under pressure
*ANTIFRAGILE: gets stronger under pressure (up to point)

1/

MISSION STATEMENT:

With a good one, a company can respond to chaos and become stronger.

The best ones are:

* Simple: Employees can ask: does this fulfill the mission?

* Optionable: Lots of ways to fulfill it

* Inspirational: Serving higher purpose

My fav: Axon $AAXN

Read 15 tweets

Brian Stoffel

@Brian_Stoffel_

11 Apr 18

@nntaleb

1/ This is a stretch, but it's something I keep coming back to when brilliant (@nntaleb) and popular (@sapinker) collide. The recent @WSJ piece does a brilliant job of highlighting the difference between *Skepticism* and *Enlightenment*.

Key passage wsj.com/articles/the-d…

@yhazony

2/ In the end, @yhazony isn't saying we should shun all "progress", but that we need to move slowly, and locally, to make sure that we don't cause *more* damage in our pursuit of *progress* because we don't fully understand the benefits of traditions.

@_Daniel_Quinn

3/ Reminds me of re-telling of Adam and Eve in @_Daniel_Quinn's Ishmael.

The context: Narrator believes agriculture ushered in a new way of living. It pitted Modern (Agricultural) humans against indigenous peoples.

In effect: The Bible = Story to justify agriculture

Read 8 tweets

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