More on the $GME/short-squeeze saga using this framework.
The investment thesis here in the weeks leading up to the major squeeze was pretty sound -- especially if you understand general human psychology & how market structure can provide an edge.
No good trader would fool themselves into thinking investing in $GME at $50 or $AMC at $20 was based on business fundamentals. But it doesn't need to be. Again, investing is about the odds, and only betting when you have an edge.
Feb 18, 2021 • 29 tweets • 5 min read
This is going to be a LONG thread on how I think about active investing.
They say all good investing is value investing. This is true in the sense that you're buying into a situation where the sellers are underpricing potential outcome. But…
Value investing doesn't = valuing income flows at $x and buying them at $x/n.
The essence of investing is in variant perception of probability distributions. Let me explain:
Dec 29, 2020 • 8 tweets • 4 min read
1/ One of the models I use most in business analysis is tech stack trees 🌳
Every product is built on and enabled by 1 or more technologies.
Understanding where a product fits on its higher-level tech stack is an important part of any long-term strategy or investment thesis.
2/ A tech stack "tree" is higher-level version of a traditional tech stack. It shows not only the tech something is built on, but what's built on it. A typical stack tree looks something like this:
Jul 17, 2020 • 16 tweets • 4 min read
🧵 1/n A quick primer on GPT-3 for anyone who's heard about it but doesn't know what it is.
Why? GPT is a game-changer in AI that has the potential to disrupt a huge amount of areas, potentially leading to truly generalized AI problem solvers.
2/ GPT is a series of language-based machine learning models built by @OpenAI. The goal of language models is essentially text generation: look at a sentence → predict the next word(s).
May 21, 2020 • 13 tweets • 3 min read
1/ Modes of Effort
Why can't you manage a research lab the same way as a construction project? How were we able to accomplish large scale collaborative efforts such as the Apollo program or Manhattan Project, but can't do the same thing for curing cancer?
2/ Efforts (pursuits of some objective) can be classified based on the certainty their means and ends.
This can help us guide management methods and understand why some efforts are harder than others.
Mar 6, 2020 • 4 tweets • 1 min read
How will the virus affect attendance of venues in the upcoming years (not just the next few months)? Valuations for companies like Six Flags $SIX looking enticing. Esp. when majority of attendance is in summer months, and there's some viral seasonality.
For $SIX looks like SG&A margins will matter a lot if rev drops. Quick & dirty valuation:
FCF@ Avg pretax margins of 27%: $400M
* 14x multiple
= $5.7B
- $2.1B net debt
- $0.6B noncontrolling interest
= $3B equity value
/ 84.6M shares
= $36 per share vs. $21 now
Aug 4, 2019 • 7 tweets • 2 min read
1/ A recent lightbulb moment of mine was that competitive advantage can be represented visually as 1 or more feedback loops. These create an advantage "flywheel" that maintain and grow a moat over time.
2/ Here's a few archetypical examples of common advantages represented as feedback loops:
May 10, 2019 • 10 tweets • 2 min read
*Space Colonization is a great idea*
I see lots of negativity around ideas like this & spending $$ here in general. The pessimists are wrong for many reasons, but here's my take on it.
1/ Life on Earth is a superorganism: a massive ecosystem that's evolved over billions of years. Humans are part of that, and we need it to survive.
Aug 7, 2018 • 16 tweets • 2 min read
Thread: Marc Andreessen @pmarca tweetstorm from 2015-02-16 on how to expand the amount of startup founders: [RE-POST]
1/ More Montessori & Montessori-style, free-form, and/or project-based K-8 public & private schools.
2/ Entrepreneurship magnet/charter schools -- specifically designed to produce entrepreneurs, vs. cogs in the industrial machine.
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