Thread by @EugeneNg_VCap

My biggest takeaway from listening to “Invest Like the Best with Ram Parameswaran @_ram_ with Patrick O'Shaughnessy @patrick_oshag (5Jan2021)” 👇🏻

joincolossus.com/episodes/22392…

1 | Current Market Cap of Internet Companies ~10%

2 | 20-30 years, go up that S-Curve ~50-70%

3 | Front-end (marketplace, e-commerce, on-demand, ad & content solutions), with payments and software (cloud).

4 | 2019 - $60T on Products & Services

5 | 3-4% CAGR in next 20Y by 2040, $120-125T (~2X)

6 | 30-35% penetration = $40-45T (ecommerce products & services)

7 | Net Income margin ➡️Products 5-6%, Services 2-3%, blended 4% on $45T in 2040 = $1.5T of Net Income (~30X in 20Y vs $30-35bn in 2019).

8 | Assume 20-30x PE, $1.5T of Net Income = $40-50T of Equity Value

9 | Add Advertising ~1% of GDP, current GDP $85X grows 3% CAGR 2X to $170T. 1% = $1.6T of Ad Revenue. 25% net income margins = $500bn Net Income. ~20-30X PE = $10-15T.

10 | Assume ~1% of GDP, just product & services = $45T + $15T = $60T of Equity Value in 20Y in 2040. ~6X from current $10T market cap.

11| Add in payments, content, gaming, and other software.
➡️ $100T plus opportunity still ahead of us.

➡️ Biggest Takeaway

Just as when one thinks that it is already so large, and it can’t possibly get any bigger.

There can still be an even larger opportunity ahead of us in the decades ahead.

All one needs is perspective. Aim to be directionally correct, not precisely wrong.

Thank you 🙏🏻 @heymaxkoh for highlighting this! 💪🏻

https://twitter.com/heymaxkoh/status/1465328363493412864