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Thomas Chua Profile picture
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9 Oct, 9 tweets, 4 min read
The top 1% of investors are learning machines.

The good news?

The internet has made knowledge accessible to everyone.

Here are 5 blog posts that taught me a great deal:
What you learn: Return On Invested Capital and Compounders

From: @JohnHuber72, Managing Partner of Saber Capital Management

sabercapitalmgt.com/importance-of-…
What you learn: How Moats Make a Difference

From: @IntrinsicInv

intrinsicinvesting.com/2017/04/04/how…
What you learn: The Psychology of Human Misjudgment, by Charlie Munger

From:@farnamstreet @ShaneAParrish

fs.blog/great-talks/ps…
What you learn: Investing basics, markets, valuation, psychology and more

From: @mastersinvest

mastersinvest.com/tutorialnaviga…
What you learn: 10 Investing Gems from Peter Lynch’s One Up on Wall Street

From: @safalniveshak

safalniveshak.com/10-investing-g…
🎁Bonus

What you learn: Figuring Out a Company's Intrinsic Value

From: @SteadyCompound

This is my most shared post which garnered over 400,000 views.

steadycompounding.com/investing/figu…
If you've learned something from this thread, please:

•Retweet the first tweet to help others find it

•Follow me @steadycompound

I write about investment concepts, business breakdowns and growth philosophies.
If you have enjoyed this thread, you're gonna love my newsletter where I curate 3 ideas on investing and growth philosophies.

Every week.

steadycompounding.com

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More from @SteadyCompound

Thomas Chua Profile picture
2 Oct
Unsolicited financial advice for anyone in their 20s who is looking to become financially secure.

Here are 8 of the best pieces of advice I have received:
1/ Give every dollar a job

Having $1,000 in your checking account with no purpose meant you have $1,000 to spend.

Decide the % that goes into:
•Groceries
•Bills
•Investment/Retirement
•Near-term saving goals (e.g. Christmas or holiday)
•Emergency fund
2/ Automate your finances

Send each dollar to the right places automatically every month:

•Investment account
•Savings account
•Paying off debt

Humans are creatures of impulse.

Don't put your willpower to the test and design your environment for success.
Read 11 tweets
Thomas Chua Profile picture
1 Oct
Economic moats are never stable.

It either gets wider or narrower every day.

More than 90% of stock market returns are generated by companies with widening moats.

Learn how to spot companies with widening moats 👇
Network effects increase value to customers when usage increases.

Social networks such as Instagram become sticky when all your friends are on them.

Likewise, Google's search engine becomes better as more data is fed into its algo.
Cost advantage moats with more efficient manufacturing or distribution.

GEICO became one of the largest insurers in the USA with its massive advantage on cost—by cutting out the middlemen.

We want to see cost decline with scale and savings continuously passed to consumers.
Read 10 tweets
Thomas Chua Profile picture
25 Sep
Having a finance degree did not make me a better investor.

Rather, I learned 10x more about investing from Twitter University.

🧵 Here are 5 threads from world-class Fintwitters.
What you learn: Build an investing checklist.

From: @BrianFeroldi, writer at Motley Fool

What you learn: Read 10Ks like a Hedge Fund

From: @FabiusMercurius

Read 8 tweets
Thomas Chua Profile picture
24 Sep
The market is efficient in pricing a business most of the time.

However, it is horrendous at pricing the optionality of a business.

4 types of optionality that could be hidden in a business:
/1 Product Expansion

Potential to increase the range of products to the same pool of customers.

E.g.

$AMZN started out as an online book store and then expanded to become the "everything store".

$CRWD introducing new modules to their existing customer base.
/2 New Businesses

Create entirely new business by leveraging the advantages of its core business.

E.g.

$SE launched digital payments after establishing a strong presence in Southeast Asia's e-commerce.

$AMZN rolling out AWS because its e-commerce demanded huge usage itself.
Read 8 tweets
Thomas Chua Profile picture
18 Sep
Over a 15 year period, 90% of active funds can't beat the market.

I've spent months studying the top 10% who do.

Here's what I learned:
Invest like businessmen.

When you buy a stock, you are buying part of an enterprise.

Whether it's 10 shares of Facebook or several million shares.

Consider it no different than if you were buying the company in its entirety.
Staying invested.

Timing the stock market is a fool's errand.

To obtain returns on the markets, you must first be invested.

Miss the 10 best days and your returns will be halved.
Read 12 tweets
Thomas Chua Profile picture
10 Sep
SaaS companies generated huge returns for shareholders despite showing net losses.

98.8% of investors use the wrong metrics to evaluate these companies.

Here are 5 metrics to capture the potential of a SaaS company.
Time to value

The time it takes a customer to realize the value of your product.

The faster value is realized, the less likely a customer will churn and the more they love your product.

Crowdstrike Falcon can be fully deployed in a large enterprise in a day.
Sales Efficiency Ratio

For every S&M dollar spent, how much revenue is generated?

A low ratio means more capital is required to grow, and less FCF left for shareholders.

Zoom requires little to no cost to onboard customers, look at its FCF exploding as revenue grows!
Read 9 tweets

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