ex-Buyside PM. Now jobless and homeless, roaming around for lulz. Excuse my bad manners.
Dec 22 • 10 tweets • 2 min read
One of the more tricky part of risk analysis as an LO is that it's often about timing, more than anything else.
This is becoming more true over time as the pace of tech adoption speeds up.
Often, investors try the nuclear route: avoiding all risks. Only buy companies with no concentration risk, no tech risk, commodity risk, great mgmt etc
This can work in some periods, but by and large you can't play w only pocket aces on the hole. Yes. Buffett is oft misquoted
I have no idea if it's a bit, if it's a real rant, a combo or w/e.
There are no heroes in this game. We are all just keyboard warriors, reading public disclosures 6-9 months after the fact, not doing anything meaningful.
Dec 10, 2023 • 5 tweets • 1 min read
Moat / BtE analysis is counter-productive to generating returns.
Most people way overindex on it, which leads to an unlikely combination: 1) You will miss out on good opportunities. 2) You will step on more landmines. 3) You will lose more on each mistake.
The simple fact is that a business comes with a bundle of risks - of which "new competition ruins the unit economics" is probably somewhere in 3rd quartile of importance.
Even when it comes to risks related to ruinous competition, barriers to entry is 'relatively' unimportant.
Dec 4, 2023 • 7 tweets • 2 min read
@fear_capital @joaomviso @PrefShares Ok. I'll stop being a prick.
The main issue with the roic reinvestment growth logic is that it treats companies as financial instruments than businesses. At higher multiples you veer into a fantasy land where all realistic growth asymptotes are ignored.
@fear_capital @joaomviso @PrefShares There is a secondary issue where most of the analysis focuses on the roic part even though the growth is just as important, if not more.
Most of the time, runway analysis is just masked with 'reinvestment' blanket - and for good reason. It's much harder to analyze it.
Nov 17, 2023 • 5 tweets • 1 min read
One angle I haven't seen as broadly discussed regarding AI (groan) is how increasing consumer expectations often introduces unmet needs in enterprise markets.
Have seen this happen multiple times: smartphones, webapps etc.
Ppl use fancy stuff at home and want them at work.
This, combined with new capabilities can lead to a relatively mature market / adjacent markets going through a bit of a renewal.
Probably will see something similar happen in multiple markets over the next 5-10 years.
Jul 3, 2022 • 8 tweets • 2 min read
Interesting stuff, but my list is quite different (other than point on comps). Short thread below:
No 1: Not evolving. Most teams strike it big on a thread and never go beyond this, despite changing market environment and size. As a result, earlier investors reap benefit and followers just line the pockets of PMs.
Feb 16, 2022 • 12 tweets • 3 min read
During my time as analyst then PM at a sizeable, private asset mgmt co ($30B), I did decent number of meetings w institutional allocators.
I was shocked at the questions that never get asked.
A semi-running thread on QtNGA @EndowmentLP@ShitFund@tseides1/ "The vast majority of our liquid net worth is invested alongside you"
QtNGA: “How does this compare to your net worth coming from shares in the asset mgmt co itself?”
You’d be shocked at how lopsided this number is for vast majority of the PMs. Incentivizes wrong behaviour.
