A thread to understand growth stocks

As the name suggests growth stocks are which that grows its top line and bottomline for a long period of time. 1. A company grow at 20 % implies that in the previous years the Topline of the company or Its sales has been growing at 20 %

If a company’s sales grow at 20 % then it can double its revenues in ( Il leave it to you to do the math)

Is only topline growth a factor ?

A thread on competitive advantage and moats

We’ve heard of moats which is metaphorically a term used by warren Buffett. So what’s a moat in business sense ?

Put simply moats are competitive advantage that keep competitors at bay from encroaching a companies territory. What are the sources of competitive advantage ? Old age companies like standard oil and reliance had a scale advantage, where they were able to produce at scale which in turn helped them reduce costs and get a good price from their suppliers.

Do scale advantages still persist ?

Received requests on quant strategy tweeted earlier here’s a basic process I’ve modeled in the intrinsic value sheet, which removes emotions completely from decisions

Where each company is categorized based on its parameters and given range of value. I’ve hidden others companies Once the ranges are in green we start to buy without second thoughts until I feel comfortable and as long as it’s available within that range. It’s a very disciplined process.

We keep updating the sheets as new information flows in and keep revising our estimates every 6 months

A small thread on the power of compounding.

1. If you invested 1 ₹ in the 1st box and allowed it to compound let’s say in a simple bank account, by the time it’s in the 8th box you would have made 128 x your original 1₹ now apply this to sensex or Berkshire Hathaway. 2. The time it takes to reach the boxes depends on the time taken to compound. If you put that 1₹ in bank account it takes 8-10 years to move to second box, but the same will take just 3 years if invested in Berkshire and around 6 years if if you invested in sensex.

I have been receiving requests to write about When to sell a stock/ investment ? #Whentosell

I’m writing this thread based on when I sell and logic behind the selling an investment

1. I sell when my investment thesis is wrong or the investment is playing out for wrong reasons I invested in a few pharma companies with a hypothesis that #USFDA issues,pricing issues will be sorted and growth return to normal, but currently pharma has given me > 100 % returns for wrong reasons which I did not hypothesise #Covid19