Just starting to think abt $PTON. Lots of reasons to dismiss it as an investment idea
- fitness being fad
- fading COVID tailwind
- lazy human nature means natural fitness related churn
- competition
BUT exactly why i think it's interesting because
- the above bear arguments are all easy level 1 arguments against a potentially great business
- what IF they effectively solve the natural churn issue related to fitness fads? Before connected fitness, there's never been a product to gamify, use social/community psych
Apr 10, 2021 • 7 tweets • 2 min read
Sharing some notes from the Li Lu talk
- spent much time studying successful businesses, why are they successful, can that continue. Sometimes we get to an ans, sometimes we don't. key is intellectual honesty, need to know what we know, what we don't, there will be things that
you don't understand even after studying it. need to be aware of that
- We focus on companies that can live through any environment. Macro can be bad, but businesses will continue operating, most don't stop. thus we focus on companies that endure through all environments
Jan 11, 2021 • 20 tweets • 4 min read
Key takeaways from Nick Sleep letters⬇️
1. - Thinking, first principles
"We try to take Charles Darwin’s approach: de-emphasise the data collection & think. When we study truly great businesses we find that very often it has been simple human attributes that have lead to their
2. success: you feel differently drinking a Coke than a no brand cola or…the reason you have these feelings have hardly changed in millennia…It is interesting to note that the business model that built Ford was the same that built Wal-Mart, Southwest and Amazon. And it will
Nov 20, 2020 • 5 tweets • 1 min read
Examples: GEICO was way ahead of its time for going direct, and direct continue to have decades to run; BHE consistently rank top in customer satisfaction, holds prices, shift to renewables; Kevin Clayton "try a lot, keep what works"; Jacob Harpaz ISCAR "“important to think
outside the box, to look further, try not to think of obvious things. We’re always developing new products no been on market before like new carbide grades or new chipbreaker. Also looking for industry bottlenecks. We have developed products that were not suitable for
Nov 13, 2020 • 11 tweets • 3 min read
Studying culture at $BRK portfolio companies. ISCAR is an interesting one. Thread ⬇️ 1. Located in Migdal, far from hip Tel Aviv it is the second largest employer in the region. Workers are reportedly utterly devoted to the company. Iscar offers near total job security, not
2. snobbish about who it hires, taking in engineers from local schools, promote internally, rather than seeking to employ from overseas prestigious schools. >1k workers are of Arab origin out of 3.5k employees which is very high ratio of non-Jewish workers. “When a company
Sep 19, 2020 • 14 tweets • 4 min read
Culture is a fascinating topic to study and where better to start than $nflx. No rules rules is a great book, some thoughts upfront and I will share more in future threads.⬇️ 1. Many have looked at netflix culture deck and some firms have tried emulating. But few have done so
2. Successfully because it is often easier to copy the form than substance. Take 360 feedback for example, many firms adopt it, but it is hardly as useful as the transparent feedback culture NFLX developed. You can take each of NFLX's policy and apply to your company, but not
Aug 23, 2020 • 9 tweets • 2 min read
Founder led firms with vision and purpose have a super power others don't. Here's what Dee Hock of Visa wrote:
1. Healthy organizations are a mental concept of relationship to which people are drawn by hope, vision, values, and meaning, along with liberty to cooperatively
2. pursue them. Healthy organizations educe behavior. Educed behavior is inherently constructive. Unhealthy organizations are no less a mental concept of relationship, but one to which people are compelled by accident of birth, necessity, or force. Unhealthy organizations compel
Aug 6, 2020 • 6 tweets • 1 min read
A thread on price 1. I've found the rule of not allowing people to say a company is cheap/expensive based on multiples is useful in removing our bias in conflating valuation with multiples. It is key that we must remain agnostic about multiples because multiples don't determine
2. if something is cheap or expensive. It is expected future cash flow generated discounted to the present that determines cheap/expensive. So something is not expensive just because it has 100x pe. Something is expensive when it's expected future cashflow generation is
Jul 21, 2020 • 7 tweets • 2 min read
$par thread ⬇️
So I've tried to kill $par over the last couple weeks but haven't succeeded. There is something abt a potential outsider CEO in Savneet tt keep me coming back. Still some concerns below. Keen to hear your thoughts @GavinSBaker@LSValue@web_prolific1. TAM smaller than marketed? 300k QSR, but pizza segment seem to require custom solutions, bigger logos run their own customs aka Subway, true TAM prob closer to 200k? An expert suggested 100k 2. Yes they can go down market, but SMB and enterprise selling is pretty different..
Jun 20, 2020 • 12 tweets • 3 min read
Stripe thread (I)
1. I'm so impressed by the collison brothers that I think it makes sense to track the company ahead of ipo. Will share more as I learn in this thread. The first on difference vs adyen.
spreedly.com/blog/stripe-vs…2. "Stripe seems interested in everything but the payment processing component. Adyen is solely focused on the payment processing experience. Stripe talks a lot about “growing the GDP of the internet” and is focused on offering a broad suite of services to wrap around the core
Jun 7, 2020 • 9 tweets • 2 min read
1. Still think the mutual fund industry is ripe for disruption.
Issues in e industry
- Only 20% generate alpha, so this is one of the few industries where we sell a product and gets paid even when we don't deliver what we promise to the customer.
- hard to generate alpha every..
2. ..year, a lot of soft aspects in fund mgmt leads to difficulty in judging whether one fund performing well is really a good fund to invest in for the long haul. Thus, a lot of intermediaries to help "educate" the consumer on fund selection
May 15, 2020 • 10 tweets • 3 min read
Long thread ⬇️ 1. Businesses are organic. Like humans they grow, mature, age. The best performing humans achieve success via nurture + nature. The nurture aspect involves perfecting your craft via hardwork and deliberate learning process. The nature aspect caps the ceiling.
2. Businesses are similar in that some are simply born better than others. Some have bone structures that only allow them to add so much muscle. Sure, smart M&A can extend the length of the limbs, but stupid ones can also add a leg that wants to walk a different direction from
May 11, 2020 • 20 tweets • 4 min read
$GAW thread
1. Spent the weekend down the Games Workshop rabbit hole. It was loads of fun and a great case study for anyone keen to learn about IP turnarounds in this space. The annual reports across the years provide loads of learning as you can see the evolution of thinking..
2. across different Chairman/CEO at the company over last 10 years. I highlights some below
- 2010 Kirby (Chairman): "That will not surprise those of you who follow the fortunes of computer games companies. It seems they are going through another phase of change. From
May 4, 2020 • 4 tweets • 1 min read
Some curious discussions on moats across twitter last week. Be it whether branding is a moat or whether moats are overrated. I think we have a tendency to find simple answers, to bucket companies into scale, network effect, patent etc. Truth is moats are way more intricate..
..True moats are often a combination of a thousand variables that takes digging across the company. But I've found it often starts with "What is the firm's DNA" aka culture. This extends into how a Co does everything and how it goes about reinforcing it's moats, which in turn..
May 2, 2020 • 30 tweets • 6 min read
1/ I started keeping an investing journal since 2017 to keep track of my thoughts at various pts of market. Reading through them today, some pretty interesting ones worth sharing:
- Feb 2017: Appears that we are close to the end of a bull run.. at 12% annual, much of my
2/ returns have be dragged by cash balance..
- Apr 2017: Markets are just going up up and up.. feels like 2007? What to do with 30% cash..
- Jul 2017: Everyday i'm tempted to buy something.. still hanging with 30% cash
May 1, 2020 • 12 tweets • 3 min read
Can nv get enough of Buffett wisdom. Some of my fav frm this interview
1. On oil: you can't change this mass of transportation. You can't change it in a year or two. It is changing, and it should change. But in terms of just the math of replacing--
finance.yahoo.com/news/warren-bu…
if we said we're going to junk all the cars we have, the economy would stop-- I mean, we can't produce-- we couldn't replace them
2. on WFC: nybody that has a sales force makes mistakes sometimes in what they incentivize. And bad practices will spread if not jumped on. when
Apr 28, 2020 • 8 tweets • 2 min read
This is so true. I often hear PMs saying I should have had that one after something we discussed goes up 50% without anyone owning it. The fact that no one bought it meant no one had sufficient conviction on the name. More often than not, I realise sometimes, certain names you..
..can pitch day and night and it remains impossible to convince someone to buy it. Cause any individual idea don't always click with everyone. What looks appealing to you depends on your own education as an investor. What worked for you before, what didn't. What insights you..
Apr 5, 2020 • 8 tweets • 2 min read
"Thinking in system" book is fascinating. This example in the book is worth thinking abt ⬇️
1/ Spruce, budworms, firs and pesticides
Budworms kill spruce and fir trees and are considered a pest to the lumber industry. Starting 1950s, forest were sprayed with DDT but despite
2/ that, Budworms resurgence happen each yr. Overtime, insecticide cost became unmanageable and people were concern of pesticides poisoning the landscape. Thereafter research found that pesticide was e wrong solution for the system. Before spraying began, Budworms population was
Mar 26, 2020 • 15 tweets • 4 min read
1. Thread on why i'm raising cash into the bounce⬇️
Caveat I'm not a healthcare expert but my views are conclusions drawn from multiple reports.. Long story short, this thing is not under control in US:
- US’s response thus far remains incoherent and uncoordinated
2. across states. They are not implementing as strict a measure as nationwide lockdown that China did, neither are they running the aggressive test, trace and quarantine measures of Korea/Taiwan/Singapore
- Some argue that multiple states being locked down and test capacity
Mar 22, 2020 • 7 tweets • 2 min read
1. I think the best funds should share their thinking and research more openly. There is a school of thought that your research is proprietary knowledge that you should protect, thus not be at risk of others copying your best ideas. I think e contrary. Not only does sharing ur..
2. .. thoughts serve to inform current and potential investors of your process/philosophy, it also serves as a platform to invite further conversations, to force clarity/simplify e way we write and explain our ideas.more importantly, helps to filter for a group of like minded..
Mar 21, 2020 • 10 tweets • 2 min read
(1/x) Some observations from this down cycle
- Antifragile companies that get stronger from stress have a lot of “excess” built into their companies, either through a fortress balance sheet (Big tech), counter cyclical business model (NVR),
(2/x) underearning relative to value provided (NFLX, AMZN, GOOG, Tencent) or culture of agility (SPOT). These companies have outperformed YTD, but many also over the LT. We should not demand to own these only during periods where we seek defense because we never know
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