Latest Twitter Threads by @BrianFeroldi on Thread Reader App

Apr 24 • 14 tweets • 5 min read

Peter Lynch popularized the PEG ratio.

However, the PEG ratio can be incredibly deceiving.

Here’s everything wrong with it (and what to do instead):

Assume you’re considering investing in one of three companies.

Which is the better buy?

Apr 21 • 9 tweets • 3 min read

How to analyze a Balance Sheet in less than 2 minutes:

The balance sheet is one of the three major financial statements.

It shows a company’s:
▪️Assets: What it owns
▪️Liabilities: What it owes
▪️Shareholders Equity: It's net worth

At a fixed point in time

Apr 10 • 15 tweets • 5 min read

Tom Engle has lived off of his portfolio for 40 years (!!!)

How? He's an incredible investor with a BRILLIANT cash management strategy.

Here's EXACTLY how it works (step by step):

Let's say Tom's portfolio is worth $100,000 in the middle of a bull market.

Tom is happy with this number and wants to protect it.

He mentally calls this $100,000 his "protected value."

All his cash management decisions are based on this number.

Apr 7 • 21 tweets • 5 min read

I’ve bought dozens of bad stocks that lost me money.

Here are 8 unforgettable failures (and the painful lesson that I learned):

1/ Remember when Warren Buffett bet big on $IBM? I did too.

I set up a bullish options position on $IBM because it was:

✅An iconic brand
✅Had Buffett’s approval
✅Cheap!

Apr 3 • 20 tweets • 6 min read

The most powerful investing lessons I've ever learned are counter-intuitive.

That’s logical - if they were intuitive, I would do them naturally.

Here are 7 counter-intuitive investing lessons I had to learn the hard way:

1: Don’t haggle over pennies

My instinct is to pay the lowest price possible when I buy.

If a stock is trading at $21, I used to set a limit order for $20.50, trying to squeeze out every last penny of value.

Mar 31 • 22 tweets • 7 min read

The P/E ratio SUCKS.

It’s an overrated metric that deceives investors.

Here are 8 reasons why the P/E ratio can be INCREDIBLY misleading (and what to do instead):

The P/E ratio sucks because of many ways that “earnings” can be misleading.

The P/E ratio becomes useless if “earnings” aren’t sustainable or artificially inflated/depressed.

Here are 8 reasons why that can happen:

Mar 27 • 13 tweets • 5 min read

I’ve been investing for 20 years.

Here are the 9 best FREE investing resources I’ve ever found:

1: @finchat_io

What: The most intuitive free website I’ve ever seen for tracking business fundamentals.

Enables quick visual charting of dozens of metrics.

Mar 24 • 20 tweets • 7 min read

Accounting is the language of business.

But it’s FILLED with incoherent jargon.

Here are 9 of the most confusing terms explained in plain English:

1: Depreciation

Found on: Income Statement & Cash Flow Statement

Definition: The accounting process of writing down the value of an asset over time.

Mar 21 • 13 tweets • 4 min read

Investing cheat code: study other investors.

Here are 10 big fund managers who have placed ENORMOUS bets on a single stock!

1: Bruce Berkowitz - Fairholme Capital

88% of his portfolio is in $JOE

2: Mohnish Pabrai - Pabrai Investments

68% of his portfolio is $AMR

Mar 20 • 13 tweets • 4 min read

10 powerful investing lessons, visualized:

1: Dollar-cost averaging makes market timing irrelevant.

2: Cash is short-term safe but long-term risky.

Stocks are short-term risky but long-term safe.

Mar 17 • 22 tweets • 5 min read

Every investor knows the 4 most common moats.

But 18 other POWERFUL competitive advantages exist.

Here are 18 completely underrated types of moats:

1: Flywheels

Positive feedback loops can take many shapes and operate at various speeds:
→Self-reinforcing network effects,
→Ever-improving cost structures
→Complementary revenue streams

When you spot a flywheel, pay close attention.

Mar 13 • 14 tweets • 4 min read

10 handcrafted visuals every investor should memorize:

1. Stock Selection Framework

2. Business Quality Growth Matrix

Mar 10 • 14 tweets • 5 min read

10 reasons why new investors lose money in the stock market:

They don’t understand how the stock market works.

If you don’t know how a company makes money or why the market moves up and down, you’ll lack conviction.

Without conviction, you’ll panic sell at the worse possible time.

Mar 6 • 15 tweets • 4 min read

How to analyze a:

▪️Balance Sheet
▪️Income Statement
▪️Cash Flow Statement

In less than 5 minutes:

Every company has 3 financial statements.

Each answers a unique question:

1. Balance Sheet: What’s your net worth?

2. Income Statement: Are you profitable?

3. Cash Flow Statement: Are you generating cash?

Mar 3 • 22 tweets • 6 min read

Capitalism is brutal.

If you invest, you MUST know how to identify a moat.

Here are 9 financial “rules of thumb” that Warren Buffett uses to tell if a company has one:

1: Gross Margin

Found: Income Statement

Formula: Gross Profit / Revenue

Moat: Consistently above 40%

No Moat: Under 40% & volatile

Feb 28 • 11 tweets • 4 min read

Investing cheat code:

Steal ideas from the best investors.

Here's how to track what the top fund managers are buying and selling (for free):

US Fund managers with >$100 million in assets must report their holdings quarterly to the SEC by filing a 13F.

Tracking these using the SEC is a pain, but @finchat_io makes it easy.

Here's how to find Warren Buffett's latest holdings:

Feb 25 • 14 tweets • 5 min read

Some stocks are STRONG BUYS when they fall

Other stocks are SELLS when they fall

How can you tell the difference?

Watch for these 5 financial yellow flags:

1) GOODWILL

This represents the premium a company pays for an acquisition above its fair market value.

If there’s lots of goodwill on the balance sheet, that’s troubling

Feb 21 • 20 tweets • 5 min read

Buffett. Lynch. Munger. Fischer.

All of these investing legends use checklists.

I spent hours studying their criteria.

Here’s the ultimate list of questions for creating an investing checklist (all yours for free):

Business Basics

Feb 18 • 15 tweets • 5 min read

A book EVERY stock investor should read:

Stocks for the Long Run by Jeremy Siegel

Here are 10 timeless lessons from this classic book (with visuals):

1: You double your purchasing power with stocks every 10 years (on average).

The long-term, real return (after inflation) on equities is 6.9%

That doubles your purchasing power every decade or so

Feb 15 • 16 tweets • 6 min read

I own 7 stocks that are 15+ baggers and counting.

Here are 10 traits they all have in common (visualized):

Data:

Stock / # of bags / purchase year:

$GOOGL | 15+ | 2009
$AMZN | 20+ | 2010
$CMG | 15+ | 2010
$NFLX | 25+ | 2010
$META | 15+ | 2012
$MELI | 15+ | 2011
$TSLA | 110+ | 2012

Feb 11 • 11 tweets • 4 min read

Jeff Bezos never focused on earnings, EPS, or "profit".

Why? He knows those numbers are flawed.

Here are 3 key reasons why he focused EXCLUSIVELY on free cash flow:

Flaw #1: Depreciation

Accounting rules dictate that equipment must be expensed over a number of years via depreciation.

The problem is this does NOT match the cash outflow when Amazon buys equipment.

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