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Thomas Chua Profile picture
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24 Dec, 8 tweets, 3 min read
Fintwit is a wonderful place for learning.

I have learned from the generous sharing of many Fintwitters.

This year, I became more active and began giving back to the community.

Here are my top 5 threads that can help you become a better investor:
1/ Top five lessons from Fintwit University

2/ Lessons from the top fund managers

3/ Top five interviews that provide the best investing insights

4/ Terry Smith's investing philosophy

5/ Marathon Asset Management investing philosophy

If you like this, follow me here @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
21 Dec
Marathon Asset produced several iconic investors such as Nick Sleep and Jeremy Hosking.

Their letters from 2002 to 2015 provided a treasure trove of insights into their investment frameworks and how they look at the capital cycle.

Here are my main takeaways:
1/ Periods of high profitability leads to reckless investments.

When profits are high:

-Boost CAPEX with little regard for ROIC
-Competitors will follow suit to avoid losing market share
-CEO's incentives aren't aligned with shareholders

It's a race to the bottom.
2/ The capital cycle will swing down when investments are taken too far.

Forecasts that were reasonable will now look overly optimistic.

Profits collapse, management teams are changed, CAPEX is cut, and consolidation begins.

This will pave way for a recovery of profits.
Read 14 tweets
Thomas Chua Profile picture
14 Dec
At 30 years old, Jeff Bezos left his cushy career to start an online book store.

His letters as the CEO of Amazon are a treasure trove of insights into investing and life.

I have consumed all of Jeff's letters & interviews since 1997.

Here is what I have learned: Image
1. The regret minimization framework

Jeff would imagine himself at age 80, "What have I regretted in life?"

And work backwards to guide your present decisions.

Most of our regrets are from the things we didn’t try, the risks we didn’t take, or the paths we didn’t travel. Image
2. It's all about the long-term

Competition is sparse when you are competing in decades.

Many companies make decisions based on the next three to five years.

Bezos is investing for the next two decades. Image
Read 13 tweets
Thomas Chua Profile picture
11 Dec
Terry Smith is often referred to as "the English Warren Buffett".

He runs Fundsmith which has a fund size of £27.9bn.

Despite the size, Fundsmith did a CAGR of 18.4%.

In his book Investing for Growth, he explains his investing philosophy.

Here's a breakdown:
1. Fundsmith's winning formula

Find companies that focus on delivering value.

Not those who are looking to pacify Wall Street with short-term results.
2. Avoiding "cheap" companies?

Low multiples are not a reason to buy a company.

A ship will continue to sink if it has a hole in it.

"A stock may have a low valuation but an even lower intrinsic value. Buying such a stock is not a recipe for investment success."
Read 12 tweets
Thomas Chua Profile picture
10 Dec
Over 627,000 businesses start each year.

But 90% of them will fail.

Only a handful will survive the competition and generate wealth for its shareholders.

Here's 7 POWERS by @hamiltonhelmer on identifying successful businesses:
1. Scale Economies

Per unit costs decrease as volume increases.

Netflix content production costs remain fixed despite growing its user base.

Cost per sub decreases as subs increase.

Smaller competitors must pay a higher cost per user price to compete.
Other scale economies include:

-Volume/area relationships (Amazon fulfillment centers)
-Distribution network density (UPS)
-Purchasing economies (Walmart)
-Learning economies
Read 13 tweets
Thomas Chua Profile picture
4 Dec
I thought getting a finance degree would make me a better investor.

Instead, the best educators were at Fintwit University.

🧵 Here are 5 threads that taught me the most:
What you learn: How to read the income statement

From: @BrianFeroldi, writer at Motley Fool

What you learn: Why return on capital = return an investor gets

From: @10kdiver

Read 8 tweets
Thomas Chua Profile picture
4 Dec
5 favorite quotes from The Psychology of Money:
Recognize the element of luck

"Realized that not all success is due to hard work and not all poverty is due to laziness.

Keep this in mind when judging people, including yourself."
Our judgements are often shaped by our experience.

Whether we realize it or not.

"Every decision people make with money is justified by taking the information they have at the moment and plugging it into their unique mental model of how the world works."
Read 8 tweets

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