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Plum Capital

8 Aug, 12 tweets, 3 min read

I love hearing stories about people's investing careers - how they got started, and what lessons they learned along the way to ultimately be successful in the markets. Pretty quiet Sunday, so a quick 🧵about my early days. Hopefully helpful for young'uns, and funny for veterans

I was interested in finance from a young age. One day in college I opened a brokerage account and got an allowance of $500 from parents to fund it. Had very supportive parents whenever I wanted to experiment with stuff like this 👍

It's was a full service online account, so could trade just about anything. I gravitated to FX - reason being: 1) liquid, 2) leverage available, 3) sensitive to macro and news headlines, 4) I didn't know anything about stocks, 5) thought I could make money using charts

I somehow had awesome beginner's luck. Had way more winning trades off the bat than losers. Account size slowly grew over weeks and months. I was having a lot of fun, of course I had no idea what I was doing but felt like I was learning and getting better 😂

Then I had my first big break - bet on the Japanese elections in size (relative to my total account size, lol) with the idea that Abenomics = weaker yen so I went long USD/JPY pair with plenty of leverage😬

This trade worked out beautifully, and at this point I turned the initial $500 deposit into $5,000 or so. Was over the moon, starting making elaborate projections on how much I could possibly make before I finished college... dreamed about a 50k nest egg by graduation

You probably already guessed what happened thereafter. I made a bunch of other uninformed trades and promptly lost all my money. Was shell-shocked for a while... $5k is a lot for a college kid! Got a few more allowances to try again - and blew up my account several times over

At this point, I had customer service reps from the broker personally reaching out to me through email. Their language was very cordial of course, but implied something like "you are a moron and trade like a complete idiot - call us and we can educate you on best practices"

I had a bit of an unsubstantiated ego at the time so ignored all their offers to give me some customized help and 1x1 education. Then lost whatever I had left in the account again. LOL!

Then I eventually got an actual buyside job out of school and learned about how to analyze companies and do fundamental due diligence. Helped me get past that "retail FX gambler" phase of my career at the very beginning.

So what did I learn? The following:
1) Risk management is key
2) Leverage blows you up
3) Stay away from revenge trades after a big loss
4) Don't invest if you don't have an edge
5) Always be open minded about learning more

Anyway - this is a story mostly for the younger fintwitters out there. I'm sure my story is not unique; suspect many others have some variation of this story for their own careers. Happy investing😆and feel free to retweet if you found this funny, haha

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More from @Plum_Capital

Plum Capital

@Plum_Capital

11 Aug

Finally had a chance to read through the $IEA earnings call transcript from the call earlier today. I think this is required reading for anyone interested in the stock. Full of nuggets and I am even more bullish than I was before (not sure if that is possible, but anyway)

I promise to shut up about $IEA shortly but wanted to draw your attention to a line in the transcript that really struck me - the recent equity offering was significantly oversubscribed

This jives with my suspicion that there are many institutions circling around $IEA and looking to snap up shares. And with the earnings commentary out today, wouldn't be surprised to see more strong hands show up in due course as people complete their work and get comfortable

Read 6 tweets

Plum Capital

@Plum_Capital

10 Aug

Hunter Douglas ($HDG.NA) posted a blowout 2Q as expected. Highest quarterly EBITDA margin ever (I think?) at 21.3% and the Company has signaled bullish outlook as well for the near/medium term

@puppyeh1

Given 2Q EBITDA of $254mm, incremental margins and the outlook, not difficult to estimate $850-900mm of EBITDA for FY'21. This was previously calculated by others (e.g. @puppyeh1) and I was initially skeptical - but the 2Q makes clear the art of the possible for this year

Based on my numbers, (including leases in the EV calc as EBITDA is pre lease-payments), $HDG.NA is trading at 4.4x (ref. price 92.3 EUR) EV/EBITDA on FY'21 estimates

Read 9 tweets

Plum Capital

@Plum_Capital

10 Aug

Quick update on my best idea and largest position (by cost basis) - $IEA

Things are working out as planned. Company priced the new HY notes as of Aug 6th. I had a few takeaways and thought this would be helpful for anyone following along

Most importantly, the $300mm Unsecured Notes priced at 6.625% with some OID - 98.483. This is a 6.875% yielding piece of paper. I was slightly disappointed, I thought this might price as tight as 5% given strength in the HY market

But 6.625% is definitely good enough. Recall that we are refinancing a Preferred with a dividend rate of 12% cash (and higher if PIK'ed!). The cash interest savings are gargantuan, and turns the busted cap stack to a more traditional one with a revolver, HY bond and public equity

Read 9 tweets

Plum Capital

@Plum_Capital

6 Aug

Bunch of random thoughts on the market and my portfolio on a Friday afternoon after the close. Not that I expect people to care, but very open to general feedback if you happen to read this...

A week ago my portfolio hit ATHs. I happened to tweet about it too. This angered the market gods and they gave me a set of bad earnings reactions to some of my positions. Now down about ~7% from said ATHs. For sure not end of the world, but stings. This game is tough 😾

Been crazy busy going through earnings and re-evaluating my theses, but took a bit of time today and refreshed portfolio stats. I think I am in decent shape, but definitely could use some clean up and optimization in the weeks ahead

Read 14 tweets

Plum Capital

@Plum_Capital

4 Aug

Update on $ELVT 2Q earnings for anyone that is following this one. Bottom line - thought it was a fine quarter, with elements of my thesis generally intact or confirmed. More detail below 👇

Most important point: the Company is back in growth mode. Consolidated portfolio grew by +13% sequentially on a QoQ basis. Majority of growth happened in May and June, with momentum continuing into July. Very good to see - the overhang of tepid credit demand is lifting

Second - credit quality remains strong. Loan loss provisions were 35% of revenues for the quarter, still at the bottom of historical ranges. Credit quality will probably revert to historical norms at some point, but still a tailwind for the biz for the time being

Read 12 tweets

Plum Capital

@Plum_Capital

2 Aug

Ok here's the thread for $TREC for those who are too busy to read stuff on Substack (but you should!). I like this one a lot, and Trecora has an added benefit of being significantly less risky that other ideas I've posted so far to date. Protecting the downside is important...

Trecora Resources (NYSE: $TREC) is a producer of hexanes and pentanes. They are input materials for various larger processes, including the manufacturing of foams, polyethylene, etc. Also used as an agent in Canadian O&G, to separate asphaltenes from the tar

It's a duopoly market, with TREC having 60% market share - only Phillips 66 has the capability of producing at the same purity levels as $TREC - which is important, as customers can get hurt badly if there are impurities in the products they use for their own processing needs

Read 16 tweets

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