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Brian Stoffel

22 Nov, 12 tweets, 5 min read

@BrianFeroldi

Admitting your mistakes as an investor is crucial. It makes you:

✅Accountable
✅A better investor.

In that light, when @BrianFeroldi and I reviewed Peloton in June 2021, I liked it so much that I bought shares.

Since then, it dove 60%.

$PTON

Here's what I'm doing⤵️

First, I need to REVIEW MY REASONS FOR BUYING

Because of our YouTube channel, this is pretty easy. Can just pull up the results of my framework, and immediately make changes to the OBJECTIVE variables

Right off the bat, I know there's NO meaningful change to:

1⃣ Concentration Risk
2⃣ Glassdoor Reviews
3⃣ Founder's Role
4⃣ Insider Ownership

🔴Finances, however, changed a ton -- which lowered the company's score to a 9 overall

More importantly, however, we need to evaluate the SUBJECTIVE variables of:

🏰MOAT: Peloton's sustainable competitive advantages
🔛 OPTIONALITY: The ability to create to revenue streams to fulfill the company's mission.

For the purposes of this segment, I'll focus on MOAT

In June, I gave $PTON credit for:

✅Network Effect (Weak): communities on platform
✅Switching Costs (Medium-Strong): Credit Card used to pay subscriptions
✅Brand (Strong)
✅Counter-Positioning (Medium): Against Gyms

In revisiting my original thesis, however, I realized:

I DID A SUB-PAR JOB RESEARCHING THE CURRENT BUSINESS DRIVERS.

If we look at where Gross Profit comes from, we see that it's primarily NEW BIKES / TREADMILLS, which are lower margin and faltering

More importantly, the VAST MAJORITY of subs margin comes from CONNECTED FITNESS subs.

🟢Connected = REQUIRE a bike or treadmill
🔴Digital = DO NOT require them

I like 🔴 more than 🟢

The problem: 🟢is MUCH more important than 🔴

That means BUYING THE BIKES (low moat and one-off purchase) is way more important that I originally appreciated, as the connected fitness subs don't come without them.

What's worse, while PRODUCT growth is SLOWING, CHURN is rising

On top of that, if the brand was a powerful as I thought, we wouldn't see this type of an increase in sales & marketing while sales a slipping

@BrianFeroldi

If all of this sounds confusing, @BrianFeroldi and I made a video which makes it easier to digest here

And if you like content like this, be SURE to subscribe to our channel (TOTALLY FREE) where we produce 3-4 videos EVERY WEEK

youtube.com/brianferoldiyt…

Thus, I've made the decision to SELL my $PTON shares.

$PTON could be a GREAT investment going forward. A recovery in sales trends could be HUGE.

But:

😕Financial Fortitude swung from ANTI-FRAGILE to FRAGILE
😩MOAT is narrower than I thought.

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More from @Brian_Stoffel_

Brian Stoffel

@Brian_Stoffel_

15 Nov

Market Crashes are Scary 😱

They don't have to be 😌

Here are four actionable steps to transform them
1⃣
2⃣
3⃣
4⃣

A mini-thread⤵️

1⃣Prepare INTELLECTUALLY

If you're around long enough, bad stuff WILL happen.

Our example: Russian Roulette

If you play one round, you have a 83% chance of survival (five empty chambers of six)

But if you agree to five rounds, you only have 40% chance of living

1⃣Prepare INTELLECTUALLY

Let's apply to investing: a 30% drop in market occurs ~once per decade.

Odds of NO 30% drop in one year = 90%

But if you invest for 30 years (as many do), *at least* one such drop is guaranteed. This uses same math as above, but with 9➗10

Read 12 tweets

Brian Stoffel

@Brian_Stoffel_

30 Oct

@themotleyfool

In 2010, wife & I quit teaching. Rolled over 403(b)s

Those accounts have grown:

✅27% annually
📈That's 910% total.

This isn't to brag, it's to be accountable for my @themotleyfool writing and my YouTube channel with @BrianFeroldi

How we did it & my portfolio today ⤵️

@nntaleb

As @nntaleb says, "Don't tell me what you believe, SHOW me your portfolio."

Actions > Words

So here it is, excluding cash, as of the start of November.

Since 1/1/12: 910% returns
Since 1/1/17: 625%
Since 1/1/19: 360%
Since 1/1/2020: 183%
YTD: 24%

The portfolio⤵️

1) $SHOP 16% of port. (~2,500% combined returns)
2) $MELI 8% (900%)
3) $CRWD 8% (350%)
4) $SE 7% (150%)
5) $MDB 7% (600%)
6) $TEAM 6% (300%)
7) $DDOG 5% (350%)
8) $AXON 5% (500%)
9) $VEEV 5% (800%)
10) $AMZN 5% (1,700%)
11) $GOOG 4% (800%)
12) $U 4% (65%)
⤵️

Read 8 tweets

Brian Stoffel

@Brian_Stoffel_

19 Oct

@nntaleb

Nassim Taleb's @nntaleb work has adjusted my MINDSET to always consider his worldview.

My favorite book = ANTIFRAGILE

There are lots of heuristics I've developed from the book, but ONE stands out for its

✅Counter-intuitiveness
✅Real-World Applications

🧵⤵️

That is:

Given two choices, ALWAYS favor the one with:

😡Known Downside & Unknown Upside

OVER

😻Known Upside & Unknown Downside

The applicability in Life and Investing is under-appreciated...yet vast

And if you understand Anti-Fragility, it makes sense.

Something must have known (and acceptable) downside to stand the test of time. It must also *at least* have exposure to upside.

But no matter how great the upside is, if the downside leads to RUIN, it isn't worth it

Read 11 tweets

Brian Stoffel

@Brian_Stoffel_

12 Oct

In 2017, I made my first purchase of a company that is now my largest holding.

First ten shares cost ~$430.

Today, those same shares are worth ~$13,500

That's a 32X return in just four years!

Here's the stock, and three more I'm putting $$ into in search of similar results ⤵️

The company was Shopify.
$SHOP

I used my Antifragile Framework to double-check my conviction of the company.

The understanding of $SHOP from the framework even led me to buy more after a short-report a few months later

fool.com/investing/2017…

Using EXACT SAME framework, I've identified three more companies with similar potential.

The first is Axon Enterprise $AXON (already a 9-bagger for me)

Maker of TASERS, Axon body cameras & (most importantly) software solutions for police.

More on $AXON fool.com/investing/2021…

Read 9 tweets

Brian Stoffel

@Brian_Stoffel_

4 Oct

@themotleyfool

I started investing ~ 10 years ago.

👨‍🏫Rolled over my 403(b) from teaching
📈Started investing it.

Since then, I've averaged 25% returns per year.

A few things have helped:

* @themotleyfool
* A huge bull market
* A framework I devised to help

My portfolio as of 10/3/21 ⤵️

1) $SHOP, 15% of port, +2,300% combined returns
2) $MELI 9%, +1,000%
3) $CRWD 7%, +300%
4) $SE 7%, +130%
5) $MDB 7%, +500%
6) $AXON 6%, +500%
7) $TEAM 6%, +220%
8) $DDOG 5%, +300%
9) $AMZN 5%, +1,600%
10) $VEEV 4%, +750%
11) $GOOG/L 4%, +700%
12) $U 4%, +40%

Continued ⤵️

13) $ABNB 3%, +10%
14) $ISRG 3%, +800%
15) $PAYC 3%, +1,000%
16) $DOCU 3%, +15%
17) $ETSY 2%, +300%
18) $SNOW 2%, +10%
19) $ZEN 1%, +350%
20) $PTON 1%, (30%)
21) $GBTC 1%, +600%
22) $ZM 1%, +7%
23) $TSLA 1%, 30%
24) $RSKD 1% (40%)

The MOST IMPORTANT aspect of each one is ...⤵️

Read 9 tweets

Brian Stoffel

@Brian_Stoffel_

2 Sep

@themotleyfool

I started investing ~ 10 years ago. I've been able to achieve 26% returns *per year*

A few things have helped:

* @themotleyfool
* The combined teachings of @DavidGFool and @nntaleb (Antifragile)
* Sharing my holdings to be accountable.

My current port as of 9/1/21 ⤵️

(all Ex-cash)

1) $SHOP 17% of port, 2,600% return
2) $MELI 10%, 1,200%
3) $CRWD 7%, 350%
4) $SE 7%, 150%
5) $AXON 5%, 520%
6) $MDB 5%, 420%
7) $TEAM 5%, 200%
8) $VEEV 5%, 900%
9) $AMZN 5%, 1,700%
10) $DDOG 4%, 270%
11) $GOOG/L 4%, 750%
12) $U 3%, 40%
13) $ISRG 3%, 860%
con't

14) $DOCU 3%, 34%
15) $ABNB 3%, 0%
16) $PAYC 3%, 960%
17) $ETSY 2%, 340%
18) $SNOW 2%, 10%
19) $ZEN 2%, 385%
20) $PTON 1%, (16%)
21) $GBTC 1%, 600%
22) $ZM 1%, 16%
23) $TSLA 1%, 22%

Waiting (trading rules) to make some changes previously announced here.

Read 4 tweets

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