30 Visual Investing Lessons 🧡

1. Moats are essential for long-term investors: Image
2. Return on capital and reinvestment rate is how a company compounds: Image
3. Not all industries are attractive to investors : Image
4. Productive assets is the place to be invested for the long-term: Image
5. Focus on identifying wonderful businesses: Image
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Image
6. Growth is essential for long-term stock performance: Image
7. Investing in quality businesses at a reasonable price is a profitable strategy: Image
8. High return on invested capital provides superior returns: Image
9. Company culture is a source of a competitive advantage: Image
10. Investors tend to underestimate stable and predictable cash flow businesses: Image
11: Companies that are founder-led, tend to outperform: Image
12: Family-owned businesses tend to outperform: Image
13. There will always be a compelling reason why you should sell your stocks: Image
14. The best investors buy right and sit tight: Image
15. Forecasting the macro economy is a waste of time: Image
16: Intelligent capital allocation is a trait of a high quality management: Image
17. A superior business model can make or break a business over time: Image
18. The price of a stock will follow the fundamentals and the expected future fundamentals of a business: Image
19. Small cap stocks gives you the best chance for a multi bagger: Image
20. Capital light businesses tend to outperform their asset-heavy counterparts: Image
21. Drawing lines on a chart won't make you rich: Image
22. Inflation will eat your hard-earned money unless you invest it in productive assets: Image
23. Timing the market is a fools game: Image
24: Profitable investing can be simple: Image
25: Understand the psychological cycle of the market: Image
26. Most investors are a victim of their own emotional investing habits: Image
27. Investing in reasonably priced quality companies provides a solid upside, and a reduced down side: Image
28. The stock market history is filled with dramal. But for those who ignored the drama, it is filled with profits: Image
29. Wide and narrow moat businesses has better profitability and performance over time: Image
30. Investing with a margin of safety will never go out of style: Image
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Use the code by checkout: P15AT1D

Go to: investinassets.gumroad.com/l/wgkrip
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More from @InvestInAssets

Sep 8
Margin of Safety is even more important when everything is going well

Investors suffer huge losses chasing gains in good times

"Don't let your ambition ruin your position" - James Clear

Let's break down how to identify the margin of safety in a stock: Image
Seth Klarman's definition of margin of safety:

"A margin of safety is achieved when securities are purchased at prices sufficiently below underlying value to allow for human error, bad luck, or extreme volatility in a complex, unpredictable, and rapidly changing world."
MOS has 2 components

β€’Current share price
β€’Intrinsic value

The first one is easy to find, and you can view the price in real time on thousands of free websites

The second one requires a deeper dive. There are several ways to calculate the intrinsic value of a business. Image
Read 24 tweets
Sep 7
Terry Smith is considered the Warren Buffett of Britain

$10.000 invested in his fund in 2010 would be $52.780 today

That's a CAGR of 15.4% vs. ~9.8% from the MSCI World index

Smith has a dead simple strategy that everyone can learn

Let's break it down: Image
Fundsmith is a London-based investment firm founded in 2010 by Terry Smith.

The fund has 23.4 Billion GBP under management.

For its size, Fundsmith has outperformed the index by a wide margin, showcasing impressive performance: Image
So, how does Terry Smith continue to beat the index year after year?

It is simple, he focuses on:
- Buying great businesses
- Not overpaying for these businesses
- And do nothing

Lets break it down πŸ‘‡
Read 22 tweets
Sep 6
Operating leverage is how a company can 10X in a short amount of time

The inflection point when a business goes from growth mode to profit mode can be spectacular

Let's break it down: Image
A critical aspect of analyzing a business is operating leverage.

Companies that have this leverage, will be able to grow their earnings at a higher clip than the revenue

The result is spectacularly compounded annual growth rates in earnings, even with mediocre revenue growth Image
Operating leverage refers to the impact of fixed costs on a company's profitability.

Let's use Software Company X as an example.

The company has fixed costs related to its software stack, data centers, and overhead.
Read 16 tweets
Sep 4
Peter Thiel once said:

"All failed companies are the same. They failed to escape the competition."

Analyzing the competitive landscape of a market is essential for investors

Let's look at why Costco has managed to escape its competition: Image
Using Porter's Five Forces to better understand the competitive dynamics in the retail market.

Let's dive in. Image
β€’Threat of new entrants

Costco operates in a highly competitive retail industry, but its business model presents significant barriers to entry.

Its membership-based model, bulk purchasing power, and distribution network make it challenging for new entrants to replicate. Image
Read 13 tweets
Sep 2
Warren Buffett once said:

"Charlie has the best 30-second mind in the world"

Charlie Munger is able to make quick and accurate decisions by utilizing mental models.

Here are 12 mental models that will make you a more effective thinker: Image
1. Occam's Razor

When presented with two options

1. Complex and sophisticated
2. Simple and straight-forward

Always choose the less complex option or explanation. Image
2. First Principle Thinking

Rethink the problem from start to finish

For example, instead of assuming that you have to pay $100 for parts to make your machine, you look at what it would cost if you made it yourself.

SpaceX is the prime example. Image
Read 18 tweets
Aug 26
In 2022 Terry Smith gave a brilliant interview with the Economic Times

Smith promotes:
- Buying good companies
- Don't overpay
- Do nothing

14 Key Takeaways from the interview that will make you a better investor: Image
1. The hardest thing for investors is "the waiting"

2. Investors should own a small number of high-quality, resilient, global growth companies of good value
3. Investors tend to evaluate their holdings in every reporting period, this is pointless according to Smith.

The investment must be evaluated over a much longer time period than a quarter or even a year to be valuable.
Read 10 tweets

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