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Frederik Gieschen Profile picture
@NeckarValue
Nov 7 • 3 tweets • 2 min read Twitter logo Read on Twitter
Morgan Housel: "I’m not interested in anything that’s not sustainable. Friendships, investing, careers, podcasts, reading habits, exercise habits. If I can’t keep it going, I’m not interested in it.

I think the only way to do that is if you are going out of your way to live life at 80-90% potential. If you’re always trying to squeeze out 100%, almost certainly it’s going to lead to burnout, whether it’s a friendship or a relationship or an investing strategy. If you’re a type A person, it’s almost impossible to do. But going out of your way to live life at 8% has always been a strategy that I want to do just because I want to keep it going for a long time." @morganhousel via @tferriss
"It’s super dangerous to attach your identity to something that’s unsustainable, whether it’s being a model or having a certain career, having an investing strategy. If you attach your identity to something that you cannot sustain when it ends, you’re going to be morally crushed. It’s just going to destroy you.

Back to investing, the variable that I want to maximize for is how long can I do this for? It’s not, can I earn the highest returns? It’s, can I maintain this investing strategy for another 50 years? And I know that I could earn a higher return this year and over the next five years if I did something different, but I’m way less confident that I could keep it going and sustain it. And I think it’s the same for relationships."
Great pod:

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More from @NeckarValue

Frederik Gieschen Profile picture
Oct 25
What are your favorite pieces with reflections on investment success and failure or lessons from decades in markets?

A few that come to mind:
Mark Sellers: So You Want To Be The Next Warren Buffett? How is Your Writing?

"If your competitors know your secret and yet still can't copy it, that's a structural advantage. That's a moat."

"Trait #1 is the ability to buy stocks while others are panicking and sell stocks while others are euphoric.

When 1999 comes around and the market is going up almost every day, you can't bring yourself to sell because if you do, you may fall behind your peers."
Read 11 tweets
Frederik Gieschen Profile picture
Sep 29
Very interesting new paper by @mjmauboussin on the corporate lifecycle.

Rather than go by age or size, the framework ties life cycle to cash flows.

Stages: Introduction > Growth > Maturity > Shake-out >Decline.

Roughly: Investing -> returning capital -> liquidating assets.
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Unexpected:
"We expected low or negative spreads between ROIC and WACC for companies newly listed, rising spreads as they mature, a decline in senescence.

What we found was nearly the opposite. The spread at the date of the IPO was high and narrowed before stabilizing."
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Companies going public (selling equity to new investors) when return on capital looks most attractive (and is about to decline)?

Returns to shareholders on the other hand were most attractive for more mature companies.
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Read 6 tweets
Frederik Gieschen Profile picture
Jun 9
Druckenmiller: "I am so tired of being a bear, and being labeled a bear."

But: Liquidity ⬇️
"Since it's taken so long, the Fed has ended up with a higher terminal rate. Inflation gets stickier the longer its in the system. That increases the probability of a hard landing." Image
"We always short the same way. ... I try and think of a situation 12 to 18 months from now and if I think the security prices are going to be less, I short.

Frankly, I'm not sure I've ever made money in shorts. I like it. It's fun, but you can get your head handed to you."
"When I was at Soros, I shorted $200 million worth of Internet stocks in March of 99. And in three weeks covered them at a $600 million loss. I lost $600 million on a $200 million investment in three weeks.

I was short 12 stocks. They all went bankrupt Every one of them."
Read 6 tweets
Frederik Gieschen Profile picture
Jun 8
ROIC and margins for companies with different moats by @mjmauboussin ImageImage
"A company creates value when its ROIC is in excess of cost of capital. Stated differently, it makes a dollar worth of investment worth more than a dollar in market value.

The market broadly appreciates this, especially when growth is considered as an additional variable."
"Markets are akin to an ecosystem where investors fill various niches. Investors with a short-term horizon tend to focus on near-term metrics such as sales and earnings.

Investors with a long-term horizon focus on competitive advantage and the size of the market opportunity."
Read 5 tweets
Frederik Gieschen Profile picture
May 24
Like other great investors, Sam Zell used content as a form of leverage. His "guide to the risky art of resurrecting dead properties" earned him his nickname, the Grave Dancer. Image
"Some might see buying and creating value from others’ mistakes as a form of exploitation, but I see it as giving neglected or devalued assets new life.

Often in my career I’ve been the only bidder for them—the last chance for a resurrection."
"I’m not claiming to be altruistic— just optimistic, and confident that I can turn those assets around.

That, in my definition, is an entrepreneur. Someone who doesn’t just see the problems but also sees the solutions—the opportunities."
Read 10 tweets
Frederik Gieschen Profile picture
May 9
Druckenmiller keynote on debt, entitlements, and the dollar.

"The Fed can’t save us."
"The demographic storm is just getting under way." ImageImage
"In 20 or 30 years there will be fewer young workers, many more seniors that need support… and the starting point is the highest national debt in our history."
"Booming economies in 2018 and 2022 never had worse fiscal results. Unless something changes, this Bipartisan “Ratcheting effect” will continue." Image
Read 6 tweets

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