$INMD my thoughts

Buyback addiction is a big mistake in the cyclical medical aesthetics industry.

Case study - Cutera

Cutera, like InMode, had a debt-free balance sheet for many years 1998-2019.

In 2013, after it failed to recover post-GFC, management started buybacks..1/x Buybacks started at $10 million in 2013. But to please shareholders, they had to do it every year, even in loss making years.

While its stock recovered, its business became weaker each year as it failed to innovate with time and to the new generation of RF devices.

Carlos Slim was also a student of Benjamin Graham and credited him in a few interviews for shaping his investment approach.

Before private equity, he was one of the first EM “Value investing with operational impact” investors.

Thread on some of his best investments.

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Apple Inc

In 1997, Carlos Slim paid $17 per share and owned 3% of Apple days before Steve Jobs returned and within 12 months, it’s shares soared to $100 per share.

This was an unusual move for him as he’d historically invested in Mexico (mainly industrials and telecom)

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Some of my favorite lessons from Beating the Street by Peter Lynch:

1. Flexibility. A growth fund is forced to buy overpriced companies every few years. 2. He always ended his discussions with management by asking them which competitor they respected the most?

A smart and efficient way to discover new investment ideas!

Can't sleep, so some companies I'm currently looking at:

Justin Allen in HK- one of the companies < 5x P/E (or <3x EV/EBIT), double-digit profitability (and almost debt-free balance sheet) that can double earnings in 3-5 years.

The risk here is their exposure to Target (1/n) They are in the loungewear and sleepwear textile market and supply retailers like Target, Primark, Walmart and Marks & Spencer.

Their two plants are in Henan, China and Cambodia. They are also setting up new plants in Vietnam and Honduras (to better support US clients).

Japanese holding companies are always full of surprises- an example ImpactHD.

At first glance, it looks like a HR company for retailers. Boring slow growth stuff.

But since 2017, earnings have grown 5-fold (43% CAGR) and targeting earnings to compound by 26% till 2026. The growth is coming from a hidden Internet of things division, ImpactTV which makes digital signage for retailers to boost sales promotion efficiency.

Around a 47% market share in Japan, 1,500+ clients and 93% are repeat customers.

Btw this is a co listed under HR management

Last year, I published a book titled Global Outperformers, where I studied listed companies that returned more than 1,000% in 10 years.

There are four parts to our study, and I will share a thread below, sharing somethings our book explores about global equity investing.

1/68 There's already some research into this topic, but what makes our research different is the breadth of markets covered, from Australia to Vietnam, our industry coverage, from healthcare to utilities and the depth of our case study research into specific outperformers.

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