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Ming Zhao Profile picture
@FabiusMercurius
Apr 30, 2022 β€’ 10 tweets β€’ 3 min read β€’ Read on X
46/ The 11 Economic Moats You Gotta Know

47/ Resources for learning fundamental investing
48/ One-time earnings bombs to learn and pay attention to πŸ’£

(More fundamentals!)

#SucceedingInBearMarkets
49/ Day in the Life of a Pod Monkey

(the haters r enraged by their own cognitive dissonance)

50/ Hidden Fuckery in Equities Market Structure

51/ Different Types of Hedge Funds
52/ What is Private Equity?
53/ Crash Course on Industry Analysis
54/ What’s happening to SVB
55/ US banking system's CRE hangover

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More from @FabiusMercurius

Ming Zhao Profile picture
May 27, 2023
Nvidia is about to become the 1st trillion-dollar chipmaker, after surging $200B in valuation in a single day.

But when cofounders Jensen, Chris, & Curtis started the company in 1993, they had only $40K in the bank.

Here’s Nvidia’s founding story, from 0 to Taxman of AI.
πŸ‘‡
🧡/ ImageImage
1/ On Day 0
The idea came together over breakfast at Dennys β€” to bring 3D graphics computing to the burgeoning video game industry.

The risk was clearβ€”$10M+ initial capex needed to ship the first accelerator with no pre-committed customers, no funding, and huge technology &… twitter.com/i/web/status/1…
2/ Cofounders take action

So Jensen quit his director job at chipmaker LSI Logic (now Broadcom). And Chris and Curtis quit their engineering jobs at Sun Microsystems.

Nvidia initially had no name and the co-founders named all their files NV for β€œnext version.” When the founders… twitter.com/i/web/status/1…
Read 12 tweets
Ming Zhao Profile picture
Apr 15, 2023
πŸ”ŽHow to Read a Term Sheet

VC term sheets are one of the most talked-about & least-understood docs in existence.
What's dirty, what's standard?

Whether you're building a company or thinking about it, as founder or employee:

Here's what the VCs know that you need to knowπŸ‘‡
🧡/ Image
0/ the basics

Your objective: build cool shit
VC's objective: achieve maximum rate of return

Interests on both sides usually align β€” until they don't.

Term sheets spell out the:
(1) control rights, and
(2) economic rights

of both parties as the company goes from 0->1.
Key parts:

- Valuation is always the 1st (&only) thing people talk about.

But other subtle clauses can and do foil a high val many times over to sour deal economics.

These include:
- Liquidation preference
- Participation rights
- Voting rights
- Conversion
- Anti-dilution Image
Read 19 tweets
Ming Zhao Profile picture
Apr 9, 2023
8 Underrated ChatGPT Prompts for B2B Sales

(with real examples, each scored #/10 on usefulness & accuracy)

πŸ‘‡
1/ Sourcing potential clients
score: 9/10

Prompt:
"Find 50 [insert business, eg. brokers] in [target region] that [do X, eg. offer US stocks on their investment app]?
Indicate each's website, HQ, & [other relevant info: eg. their custodial partner]. Put everything into a chart.
2/ Forming Google Dork queries to refine souring
score: 9/10

If your clients are also clients of X & if you know what terms are in a standard partnership agreement, you can Google DORK to source many more "hidden" candidate clients that have no publicly announced partnerships!
Read 11 tweets
Ming Zhao Profile picture
Mar 25, 2023
Dissecting the Impending CRE Crisis

Soon u'll hear a lot more on CRE.

Why? B/c US banks & PE firms are headed for real estate doomsday.
4 collapses in 11 days
$270B in CRE loans due EoY
$3B+ defaulted in March 2023 alone

What is CRE & why does it matter?
What's next?
πŸ‘‡
🧡/… twitter.com/i/web/status/1…
1/ What is CRE?
"Commercial real estate" = property for business

The US CRE industry is a $20.7 trillion market.

Core segments include:
- office
- industrial
- multifamily
- retail
- hotels
- land
Investors specialize into 3 major investment strategies:
- Core
- Value add
- Opportunistic

Core:
- low risk, "steady income" play
- safe geos (NYC, SF)
- high starting occupancy
- target IRR: 6-9%

Value add:
- medium risk, "asset appreciation" play
- investor must put in work… twitter.com/i/web/status/1…
Read 14 tweets
Ming Zhao Profile picture
Mar 16, 2023
BREAKING:
Another wrinkle in the regional banks / $SIVB / $SBNY saga.

Retail investors about to lose $πŸ‘πŸπŸŽ πŒπˆπ‹π‹πˆπŽπ π“π‡πˆπ’ π…π‘πˆπƒπ€π˜β€” $130M on SVB + $180M on SBNY.
But NO ONE is talking about it.

WSB mods are even censoring posts about it.

What’s going on?
πŸ‘‡
🧡/
1/ The News

On 3/14, National Securities Clearing Corp (NSCC) said it will no longer accept $SIVB & $SBNY exercise. Settlements will be be broker-by-broker.

What does this mean?

In short, things are about to get fucked.
Put holders are about to get WIPED.

Let me explain ...
2/ Expectation vs Reality

Normally if u buy a put and stock --> $0, u should make a BOATLOAD of $$! Right?

Wrong
Not this time
Not on $SIVB

Why?
u can only cash in gains via 2 ways:
a) sell
b) exercise

For SVB puts, depending on ur broker, u might not be allowed to do either!
Read 13 tweets
Ming Zhao Profile picture
Mar 10, 2023
πŸ¦πŸ“‰ SVB Crash ExplainedπŸ“‰πŸ¦

Silicon Valley Bankβ€”#16 largest US bank with $212B β€” just crashed 60% in 1 day & fell 22% post-close. Stock halted now.

@BillAckman is calling a US gov bailout.
@peterthiel is calling a bank run.
JPM, BAC, WFC all dropped 6%.
What's next?

Is this… twitter.com/i/web/status/1…
1/ How banks make money

Let's start at the beginning: SVB is a bank.
Banks make πŸ’ΈπŸ’Έ by taking in deposits & lending back out at higher rates.

This spread btw interest earned on loans vs paid on deposits is called NII (Net Interest Income).

NII is SVB's #1 profit source: ~73%
2/ How banks lose money

SVB's NII comes from 2 main sources:
1) interest on loans to startups
2) yield from fixed income investments (treasuries, MBS)

So SVB loses $ when:
1) startups default on debt
2) interest rates rise and SVB must sell its FI investments at a realized loss
Read 16 tweets

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