Introducing: $TTD

From $1B (at the IPO) to $49B+ in 8 years.🚀🚀🚀
Disclosure: long $TTD since 2019 ($19.5).

How can $TTD compete with giants like $GOOGL & $META? We look at the 3-part moat.
Is $TTD a buy now?💰
🧵👇 $TTD was founded in 2009 by Jeff Green, a visionary who created the first digital ad exchange AdECN, which was bought by $MSFT in 2007. Green staid there for 2 yrs before founding $TTD.
But what does it actually do?🤔👇

$PAYC is down almost 75% from its high and now trades at a PE of 17.9, the lowest ever.

Is it interesting to buy now? 🔍🕵️‍♂️

A short🧵👇 Investors have punished it for its slower growth, which, according to the company, was caused by Beti, its self-service HR solution, which cannibalizes other revenue streams.
That's the reason why $PAYC trades at a PE of 17.9, the low valuation since its IPO in April 2014. 👀

This is me.

My general state of mind is happy. 😀😀😀
I wake up happy every day, but that was not always the case.

When I was in my early 20s, I was depressed. Just TWO questions that I have been using ever since completely changed my life.

You can use them too!👇 The 1st question is about decision-making:

Suppose you are 90 and have one week to live. When you look back at this moment, will it be important?

In 99% of cases, it won't, so don't put too much pressure on yourself to make the right decision. Don't overthink it. But...👇

While $NU has a market cap of $55B, many don't really know it yet, as I could see again yesterday after another fantastic quarter!

That's why I put together a thread with crucial insights to understand the investment case.

Ready? Go! 👇 $NU was founded 11 years ago in Brazil and recently, it already celebrated its 100 millionth customer (99.3 at the end of Q1).

The customer growth has been explosive, as you can see on this chart.

But customers need to be monetized! 👇

Price/Gross Profit 🙌

One of the most underrated ratios is price/gross profit. It can foreshadow what the business might be worth in a mature state.

Let's do this for widely-followed🔟growth stocks🚀

$TTD $MELI $CRWD $NET $SNOW $DUOL $ZS $SHOP $DDOG $CELH We start with The Trade Desk $TTD.

At a P/GP of 26 times, I think it's quite fully valued without being crazily overvalued.

Next: $MELI

$DUOL' stock price is up 64% over the last year and 140% since I picked it as a Potential Multibagger in September 2022. 🥳🥳🥳

I'm a user (Italian🇮🇹) with an 888-day streak.

Here are some key statistics that help you explain $DUOL's price movement. In the last three years, $DUOL has tripled its revenue. As you can see in this great 🤩@finchat graph, most of that comes from subscriptions.

Those come from users willing to pay to have Duolingo Premium without ads.

Let's dive a bit more into the revenue streams.👇

10 GREAT quotes about volatility.

1. "I think that the business about volatility being risk is a con job which was perpetrated primarily because volatility is machinable."

Howard Marks
🧵👇 2. Day-to-day fluctuations in the profits of existing investments, which are obviously of an ephemeral and non-significant character, tend to have an altogether excessive, and even an absurd, influence on the market.
John Maynard Keynes

GROWTH INVESTING in 5 quotes and 7 tweets.

1. LOSERS
If you are a growth investor, you will have many losers. I've had my share.

But the wonderful thing is that one or a few multibaggers can wipe out all the losers and still allow you to outperform the market.
🧵👇 2. The reason? The ASYMETRIC RISK in investing. You can only lose 100% (unless you are leveraged) but you can gain 10,000% or more.

“It's not whether you're right or wrong, but how much money you make when you're right and how much you lose when you're wrong.”
George Soros
🧵👇

I'm long $NVDA since $25 and today, it crossed $700. 🚀🚀🚀

When it was at $400, I recommended it a few times to the Multis as a Best Buy Now and called it fairly valued for its growth.

But does $700 make sense or is it in clear bubble territory? 🫧

Let's have a look. 👇
1/6 Let's look based on free cash flow.

Over the last year, $NVDA had a free cash flow margin of 40%. I think it will be slightly above that in Q4 and that it can beat on revenue. That could mean $25 billion in FCF for 2023.

So, is that expensive?👇
2/6

Are valuations too high?👇

This 1st chart shows that large caps are historically expensive. Midcaps and smallcaps are not.

Your conclusion is now probably that the Mag7 stocks are overvalued?

$MSFT, $AAPL, $NVDA, $AMZN, $GOOGL, $META, $TSLA

But is that really the case?👇1/3 There is an outstanding reason for the Mag7's higher valuation. Their earnings are just incredibly much better than those of the rest of the S&P 500.

Just look at this image and you'll understand.

But there's more.👇
2/3

Have you read Robert Cialdini's FANTASTIC book📕 "Influence"?

If not, I highly recommend it. If it's good enough for Charlie Munger, it's good enough for anybody.😃

Here are some facts from the book and some trivia about the book.

The first is about Charlie Munger.👇

1/5 Charlie Munger liked the book so much, he sent Robert Cialdini a big envelope with a Class A share of $BRK.A stock.

At the time, this was worth about $60K. Today, that share is worth more than half a million dollars!

More trivia. 👇
2/5

One of my subscribers (Jason, thank you so much!) reached out with this great question on the Potential Multibaggers platform:
"Could $PAYC be like one of those companies we have read about in the great book The Outsiders?"

I think it could, yes. Read the threat to know why👇 This is what Jason wrote about the characters of Outsider CEOs:
"Humble, unassuming, and often frugal, these "outsiders" shunned Wall Street and the press, and shied away from the hottest new management trends. 👇

Since its IPO, $TTD is a 20-bagger and since I picked it 4 years ago, it's a 3-bagger, despite being down ~45% from its highs right now. I think it still has multibagger potential for patient long-term investors.

But what does The Trade Desk do exactly? A 🧵👇1/10 This slide from the company's earnings call slide deck can already help you. You have to cross a certain ad spending budget. If you want access to ads in Canada, you have to spend $100K/month on ads, and in the US $1M. 2/10

This is my representation of $SE's Q4 2022 income statement. I have marked a few important things and will highlight them and give my point of view in this thread. 🧵👇 As you can see, Garena's revenue continues to go down. It was cut by 1/3 YoY. But Shopee and DFS (=SeaMoney) did really well. Overall, revenue was up 7.1%. That's not so much, but if you look at gross profit, you see it's up 29.5% YoY.

A lesser-known piece of tech history from the late 80s and early 90s and what that can learn us about the implications for today's long-term tech investing.
(h/t WSJ)
1/10
⏬ In the late 80s, the tech sector had lost its mojo. Since the 1960s, the Cold War had spurred big defense investments in tech, but the Cold War was over now.

2 important things revived tech in the early 1990s.
2/10
⏬

The 12 most dangerous words in investing are, 'The four most dangerous words in investing are: it's different this time. '”
~ @michaelbatnick

A reference to John Templeton, of course. Both are right. Human emotions never change, but circumstances are different.
⬇️ Many compare this to the dotcom bust, but you can not compare $GOOGL $GOOG, $AMZN, $MSFT, $AAPL and other big cap tech companies to back then. Was there a bubble in unprofitable crap companies? Of course. I fell into the $SKLZ trap, I can know. 😱

But it's also different.⬇️

The $SE Q3 earnings are out.

Revenue of $3.2B, up 17.4% YoY, beating by $190M.
Non-GAAP EPS of -$0.66 beats by $0.29.

Break-down⏬ Gross profit $1.2B, +21.7% YoY, gross margins 37.5% vs. 37.9% in Q2 and 37% in Q3 2021, so stable.

Net loss $(569.3)M, flat YoY, 38.9% improvement QoQ.
If you exclude SBC, severance packs and lease termination fees, net loss improved 49.4% QoQ.👍
⏬

Valuations for stocks are subjective and for high growth even more. Of course, that doesn't mean you can't say anything about valuation at all. You can say stock A is very expensive.

But a price tag is subjectivity disguised in objectivity. Let me explain why through $NET. ⬇️ $NET's management said that they were aiming to reach a run rate of $5B over 5 years without any acquisitions or new product launches. That's a CAGR of 38%. But even now, Cloudflare trades at a PS multiple of high teens. Too expensive? Maybe, maybe not.⬇️

All those earnings tonight! Let's look at a few.Good results from $MELI:

Q3 GAAP EPS of $2.56 beats by $0.24.
Revenue of $2.69B, up +44.6% YoY in dollars, misses by $10M or just 0.37%, not really material. On an FX-neutral bais up 60.6% year-over-year :muscle:

More: 👇 Income from operations of $296 million, with an 11.0% margin

E-commerce:

GMV (gross merchandise volume, the 💲 amount of everything sold on the platform) up 31.5% to $8.6B.

# of Items sold +9%, which means that the value per sold item went up considerably.

More: 👇

In life and investing, too many people focus on risks and what they could lose but they don't look enough at what they could win.

That doesn't mean you shouldn't look at risks. It means you should ALSO look at the other side.

As people we are wired to look more at risks.
1/5 The reason is simple. If you saw something in the bushes, it was safer to assume it was an animal that could eat you instead of you eating it. The risk-reward balance was clear. But in life now and in investing, the risk is much smaller than being eaten if you play it smart.
2/5

So many of the best investors stood alone when the market turned.
In 2001, Bill Miller was under attack. Miller had invested in $AMZN in 1999 and shared his conviction publicly. The stock tanked from $107 to $5.5.
1/5 Miller was mocked and ridiculed.
But he added to his position and kept adding, bringing his average price down a lot and held all the way through. He's the biggest $AMZN shareholder "whose name is not Bezos."

It takes guts to be a great investor.
2/5