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14 Oct, 4 tweets, 2 min read
1/ I often dream about writing and speaking as precisely and thoughtfully as my friend Michael Mauboussin. I was lucky to be able to read his new book when it was still a draft. Now I have a hard copy for my library. Friends are a treasure. Hand written notes are a lost art.
2/ "Rather than forecasting cash flows, investors should begin by estimating the expectations embedded in a company's stock price. An investor who has a fix on the market's expectations can then assess the likelihood of expectations revisions."

Invert!

expectationsinvesting.com/online-tutoria…
3/ At 4:46 Bill Gurley describes an approach that is straight up Michael Mauboussin-style "Expectations Investing." Take the stock price today and reverse engineer what must happen to support that price. One thing you do know is the current price. Invert!
4/ Four aces in my library! amazon.com/Michael-J.-Mau…

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More from @trengriffin

Tren Griffin Profile picture
16 Oct
1/ Simba: "Investing based on ratios like P/E isn't working."

Mufasa: "That's because stock prices reflect transactions between investors selling the present value of future flows they expect a business to produce and buyers who expect even higher future cash flows."
2/ Simba: "Looking up ratios on a web site is easy. Doing a Price-Implied Expectations Analysis requires some work."

Mufasa: "Do you want to use an investing system that is easy or do you want the PIE system that actually works? Use the on-line tutorial." expectationsinvesting.com/online-tutoria…
3/ Simba: "Can't I just invest in great businesses?

Mufasa: "You can't earn superior returns on stocks that are priced to fully reflect future performance. Picking stocks is searching for mistakes What revisions doesn't the seller understand? To start, know what they expect."
Read 8 tweets
Tren Griffin Profile picture
15 Oct
Porsche AG:

"we are facing challenges in sourcing semiconductors." google.com/amp/s/www.cnbc…

Of course, if the container ship backlog at the ports of LA/Long Beach drop, all supply chain problems are fixed! Everyone knows this.
"By September, the annualized rate of sales had tumbled by one-third to just 12.6 million vehicles from as high as 18.8 million in April." news.google.com/articles/CAIiE…
news.google.com/articles/CAIiE…
Read 4 tweets
Tren Griffin Profile picture
15 Oct
1/ The amount of venture capital invested in space is ~1.2%. A tiny fraction of that is for commercial human flight. Less than .1% probably. As a percentage of all investments globally the amount of money invested in commercial human flight isn't even noise. It's bupkis.
2/ Rocket launches are spectacular and draw lots of attention. It's a giant bomb with a nozzle.

Arguments that investing in space based business is diverting resources from other "more important" efforts are gong to be made by people who have zero understanding of the facts.
3/ Space-based technology (eg, earth observation and GPS) have resulted in huge productivity and quality of life improvements. Higher farm productivity that results from precision agriculture is just one example. GPS is everywhere. Not investing more capital in space is bonkers.
Read 4 tweets
Tren Griffin Profile picture
14 Oct
1/ "Wholesale transfer pricing power" is a term I first heard John Malone use circa 1995. The "Warner Media-Discovery just does content" bet that David Zaslav is making depends on who has the most pricing power in the value chain. What's your BATNA? vanityfair.com/news/2021/10/d…
2/ John Malone: "Is cable going be a great business; who is going to make the money? It may well be that the Disneys of the world make the money and cable and video continue to get squeezed. I think at least for now [broadband has] enough pricing power." 25iq.com/2014/11/02/a-d…
3/ Wholesale transfer pricing =  the bargaining power of company A that supplies a unique product XYZ to Company B which may enable company A to take the profits of company B by increasing the wholesale price of XYZ.
Read 7 tweets
Tren Griffin Profile picture
12 Oct
1/ A persistent power law is a signature of path dependence. Path dependence is often driven by preferential attachment. Path dependence is everywhere, if you know how to look for it.

The key insight is simple: People don’t make decisions independently.
axios.com/creator-econom…
2/ "We live in Extremistan, where black swans proliferate, winners tend to take all and the rest get nothing –there’s Domingo and a thousand opera singers working in Starbucks.” nytimes.com/2007/04/15/mag…
3/ Please put your Twitter Super Follows revenue into an investment account instead of spending it at The Dollar Store. Thanks in advance!

"Twitter’s creator platform Super Follows is off to an inauspicious start, with only ~ $6,000 in US iOS revenue in the first two weeks."
Read 4 tweets
Tren Griffin Profile picture
11 Oct
1/ Podcast for your next workout or walk (interview with Dan McCarthy on Customer-based company valuation (CBCV) starts at 13.30 minutes. Better forecasting with data science. With CBCV, marketing speaks the language of the CFO.) music.amazon.com/podcasts/f33ef…—-with-daniel-mccarthy
2/ Podcasts that include a transcript have lower customer acquisition cost (CAC). There is always better word-of-mouth with a transcript. I'm much more likely to be a guest on a podcast with a transcript like Invest with the Best or Infinite Loops. podcasts.apple.com/us/podcast/the…
3/ Dan McCarthy talks about a way to differentiate between a business that is creating value and one that is destroying value even though both are not profitable on a GAAP basis in this podcast. He uses the word "variable" in one important sentence. What is that sentence ?
Read 5 tweets

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