I have been wanting to pen this down since a while. I think this is right moment. I achieved FI long ago but 2020/2021 played a crucial role in achieving that multiplier effect. I have surpassed my initial FI goal by 5fold already.
I don't own a home. I never took any loans, I don't have credit cards. Since my first job, I was focused on building passive income sources & I knew it is going to take time. I think finally I have reached a place where these sources can take care of my living very well.
I haven't been trading since some time as I focus more on professional side. I hold a concentrated PF, track few businesses, so i don't have many threads to write. I don't spend time knowing something abt everything. Rather, spend time to know everything about fewer things.
Some very important, intangible, topics that investors rarely see.
1. Making money is secondary to ensuring you don't bleed out on drawdown phases.
2. If you get pushed down 30-40% in every phase from the cost, it means roughly you get pushed 12-18 months on your financial independence goal. If you get pushed like this often, you won't even realize when goalpost moved from 45y to 55y on your financial independence graph
3. Nobody knows market peak. Important is to look at your PF & ask - am I playing Sehwag when I have to draw the test, or am I playing Dravid/Pujara.
Let's try to understand why technology product companies have historically been non-sequential in QoQ growth. Some call it cyclicality, some called it nature of the business. I will try to clarify a few things in this thread.
To understand this, you have to look at how software as evolved over last decade or two. We have moved on from bulky software that needed on-premise installations to cloud today. Naturally, revenue realization practices have changed too.
Historically, license sell for a large bulky on-prem software used to result in non-sequential growth for technology product companies. Revenue realization used to be jerky. One Q will have huge revenue, while other could be poor.
Use of AI to predict trends isn't really new. However, many still question on how realistic AI can model the trend. Well, it depends on the algo of course. But something came up in my reading & I was intrigued to dig deeper! It is about #SHEIN
Ask any female if they have heard about an app called Shine, and the answer will be an instantaneous yes. The app has taken fashion world by storm & the infatuation is simply explosive. To be honest, I too know Shein, well of course, for obvious reasons 😄
Shein in some numbers:
* Accounts for 28% of the US fast fashion sales
* Revenue has grown 100% each year since last 8 years
* Outpaced H&M, Zara & many more big brands
*Design to production time is just 3 days!
* Adds 1000s of inexpensive SKUs daily!
* Daily app download 650k
A lot of you requested me to post a thread on #LTTS. I did not find time, neither had motivation to do since it is a complex business to cover via something like Twitter thread or even a newsletter. Here I am posting only some abridged views.
I hold Both #LTI & #LTTS from IPO. I am an ex-LT/LTI so have a bit of sneak peak into company as well. Last 2+ years have been terribly bad for LTTS. Not because they did something wrong, but because of external factors.
ER&D space is a bit different than traditional IT. The revenue realization cycles are longer. Contracts are stickier but hard to come by as well. Unlike IT, ER&D is close to sectoral automation at frontline. IT plays role via software, but ER&D is much close to real automation
I am super bullish on this space. We covered #Newgen & its context for growth previously, but the story is only emerging. There is not much coverage on the low-code space yet. People do understand tech/IT, but low-code is new to people in India, but globally it isn't the case.
SAP recently acquired AppGyver which is in "No-Code" segment. However, SAP acquired it as a value addition to its "Low-Code" offerings. So that's a clear sign that SAP is very bullish on "Low-Code" segment. We did discuss briefly about it in initial thread.
Lot of folks asked me how to exit a commodity stock. Here is one small reckoner list: pl note these are not exhaustive reasons I exit a commodity stock.
1. Follow commodity prices on LME spot & future contract values 2. Usually, LME warehouse stock levels give you hints much in advance. If warehouse stock is rising then check two things - spot price & capacity coming on stream
3. Follow historical cycle & correlate with total capacity available. Is the spread of spot and future widening? 4. When commodity cycle peaks, companies run out of capacities. Look for capacity utilization insights given by managements.
After getting good feedback on yesterday's thread on #routemobile I think it is logical to do a bit in-depth technical study. Place #twilio at center, keep #routemobile & #tanla at the periphery & see who is each placed.
This thread is inspired by one of the articles I read on the-ken about #postman API & how they are transforming & expediting software product delivery & consumption, leading to enhanced developer productivity.
We all know that #Twilio offers host of APIs that can be readily used for faster integration by anyone who wants to have communication capabilities. Before we move ahead, let's get a few things cleared out.
So I have been studying this entire communication layer as its relevance is ever growing with more devices coming online, staying connected, and relying on real-time communication. Not that this domain under penetrated, but there is a change underway.
As per many publicly available research, The Communications Platform-as-a-Service (CPaaS) Market was valued at USD 4.54 billion in 2020 and is expected to reach USD 26.03 billion by 2026 and register a CAGR of 34.3% during the forecast period (2021 - 2026).
In next series of tweets, I will try to present a few key highlights on Indian Tech companies. Often I hear that people want to invest in US cuz India does not offer many product companies. It is mere illusion! Let's see where we go with this series
India started as IT outsourcing hub, grew in size, made lives of many. Remained predominantly services provider. It still is, but it is transforming too. Indian IT is no longer pure services provider.
IT companies usually build reusable software components that can be wrapped to make an accelerator - something that can accelerate a functionality implemented for a new customer. All major IT companies used to have high regards for accelerator building in the past.
The COVID has brought unsurmountable change the way businesses carry their operations. "Business continuity" which only a training material earlier, now has become a reality. How does this change consumption & digitization?
The frontside, regular IT/Tech was first to experience the boom due to increased demand of tech scalability, adoption of cloud solutions, and WFA (work from anywhere) initiative. Banks/FMCG/Retail/Pharma were first to adopt tech
There are some Post-COVID beneficiaries such as auto/infra/Mfg./industrial/transport etc. These industries got hit worst as they were relatively behind on the tech & automation adoption.
As promised I am now posting details on #RIL#JIO stack. I shall discuss some advantage that #JIO stack has over peers. Pl do not take this as reco to buy stock. This is purely for information purpose
Unfortunately, majority of market participants only see the deal value #RIL has managed to clock & there is entire segment of investors who hate #RIL stock.
Those who understand the technical/business depth of #RIL#JIO#RelianceRetail know the scale and future ahead
Talking first about #JIO stack from telecom PoV, it has tons of advantages over likes of Airtel/Idea-Vodafone that #JIO is pure 4G VoLTE network.
#newgen software - as we go into 5G & its adoption increases, speed of enterprise activity will increase in tandem. Speed along with reliability of connectivity/communication forms the base of new modern enterprise
For enterprise, go-to-market speed will differentiate winners from laggards. Product lifecycles are getting shorter & shorter & urgency to support enterprise activities is growing even more.
The large scale, bulky software are losing flavor. Slice & consume is the theme & therefore, many more opportunities galore, one such opportunity is #newgen
One segment I have been absolutely upbeat is IT/Tech. Tech has always been the hidden moat for many companies - AP/BFL to name a few. Tech is no longer a vertical in market. It has become horizontal that cuts across every single vertical.
Be it Pharma/API, Finance, Insurance, Manufacturing, Retail, CD, or any other segment, Tech is going to give you edge over peers.
The spend on IT/Tech is going to increase stupendously in coming 4/5 years to levels we haven't even imagined. The investment in tech is going to help big get even bigger and put very hard survival barriers to new entrants.
The coming decade will belong to EMs, especially, Indian markets! You just cannot afford to sit out, underestimate, or exit too cheap. India is at tipping point where China was back in 2002. Do not miss the lifetime opportunity to make wealth!
Find out companies that will benefit from $ down cycle..The decade will belong to them.
The purchasing power of INR will shoot up! Companies that are leaking money due to high $ rates will suddenly get a shot in arm and will witness unprecedented growth.
There once was a hedge fund manager, a friend of Chris Mayers, who was about to retire. He was fairly successful and decided to invest in art and bought a painting for $150k. His wife thought he fool to invest in the art at this price.
After he moved to his new retirement home the hedge fund manager decided to sell the painting. So he got the painting appraised and to his surprise the appraised value was $850k. He & his family thought they got a jackpot.
So he decided to auction the painting and reserve was $850k. Auction started and within a few minutes the bid was at $850k and he thought finally he will make money on this painting. What happened in next 30 minutes made him even richer.