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Durable Investments  Profile picture
Durable Investments 
@retaox
Buying wonderful companies at decent prices and decent companies at wonderful prices. Follow @denozyn for tweets not related to investing.
Feb 14 • 25 tweets • 6 min read
$CHTR is at trading at 5YR and 52W lows at this moment.

I'm replacing "Buy when there's blood in the streets" with "Double check your math when there's blood in the streets. If the ROI is high, then buy".

Here I describe an outcome that I think is the most probable by 2028. Image IMO, the elevated capex spend till 2026 are in response to intense competition from both Fiber and FWA.

The new rural passings and the upgrade to multi gig speeds across the foot print will ensure that existing 30.6M customer base, at least, doesn't shrink for the next 5 years. Image
Feb 9, 2023 • 4 tweets • 2 min read
It amazes me every single time when $MSFT tell how much money they make in one of the sub-categories like security or gaming.

I'd not have guessed that they make $18B in digital advertising. Retail businesses with pre-established clout are going to continue printing money in the influencer/AI led era.
Mar 21, 2022 • 8 tweets • 2 min read
I've never looked at $Y before. Wanted to understand its business operation and the valuation.

Looks like Alleghany has a very similar structure to $BRK.
- Re/insurance
- Public Investments
- Whole Owned Businesses All the wholly owned businesses fall under the Alleghany Capital umbrella. Very eclectic group of business like toys, steel, plastics and biotech. They make about $3.7B in revenues and $330M in net income.

If we were to value it as a standalone entity :
- 15 P/E --> $5B
Feb 21, 2022 • 6 tweets • 2 min read
Been doing some reading on $ADSK.

Summary : If you need a job in Architecture, Engineering, Construction or Animation you better learn Autodesk tools.

Their execution on moving to cloud and subscription model is fascinating. Unsurprisingly, executed on top of AWS. ☁️💪 I had misguided perception that $ADSK is used only by designers in various fields.

But the core design data is central to so much collaboration that happens in a project. They have basically positioned themselves as the project management tool for capital projects.
Dec 5, 2021 • 10 tweets • 2 min read
Just started reading Prophets of War to get better understanding of $LMT. Might post some stuff that I find interesting in this thread. Feel free to mute.
Nov 14, 2021 • 6 tweets • 2 min read
Interesting take on Amortization by Mark Leonard.

"Software for Life"

$CSU.TO I might as well make a thread out of this. Feel free to mute.

A very intuitive short hand to identify if financially incentivized managers optimize for short term revenue growth.
Sep 3, 2021 • 14 tweets • 3 min read
32. Non revenue related products.

An incumbent selling enterprise products that doesn't necessarily result in increase in revenue for customers are harder to disrupt.

Management often is predisposed to look for ways to increase revenue than to cut costs.
(cont)
Whoever is owning the migration, gets kudos if it is successful, but risks his career if the migration fails.

But a revenue generating project, if successful puts the person's career on rocketship. If failed, they'd be lauded for experimenting and failing.

Think ADP, NOW
Aug 11, 2021 • 14 tweets • 3 min read
Today @sinstockpapi reminded me, how invaluable the Talks at Google videos are for investors.
Some of my favorite talks 👇
Jul 26, 2021 • 5 tweets • 3 min read
@Wallfacer_LuoJi Good businesses? Yes.

Why?
* high training costs.
* high switching costs.
* scale economics shared.
* recurring revenue.
* highest barrier to entry IMO.
* one of the largest TAM
* enjoys economics of marketplace and platforms
* customers are ambassadors

@Wallfacer_LuoJi High barrier to entry :
Jul 16, 2021 • 7 tweets • 2 min read
If you are interested in AWS, I highly recommend glancing at the articles that get published in their blog. Gives you some perspective on the time investment a software developer has to make just to keep up features that get released every day.

aws.amazon.com/blogs/aws/ One of the biggest reasons companies and developers get locked in the ecosystem for life.

Making a decision on a cloud provider, is a one-way door. There's no turning back.

One of the widest moats an industry can have.
Apr 19, 2021 • 22 tweets • 6 min read
$CVS is not just any corner drug store chain. It controls the nation's
* largest Pharmacy Benefits Manager (Caremark)
* third-largest US health insurance company (Aetna),
* largest pharmacy chain (CVS Pharmacy).

It falls dead center in the too-big-to-fail category. No really, how big is it?

* 5 million people walk into $CVS stores every single day.
* 75 million people are in their rewards program.
* 70% of US population lives within 3 miles of a CVS.
* 105M members of Caremark buy almost 1/3rd of the drugs dispensed in this country.
Apr 6, 2021 • 15 tweets • 3 min read
$BTI

There are 1.1 Billion smokers in the world. And 5 Trillion cigarettes consumed annually, generating $700B in revenue per year for the industry.
660B of those cigarettes are sold by $BTI to over 150M customers. US Brands : Newport, Camel, Natural American Spirit
Global Brands : Dunhill, Kent, Pall Mall, Rothmans, Lucky Strike

Goal is to invest and grow non combustible products as fast possible while maintaining a 65% dividend payout ratio and less than 3x debt to ebitda ratio.
Apr 4, 2021 • 5 tweets • 1 min read
"If you risk something that is important to you for something that is unimportant to you, it just does not make any sense." "If you hand me a gun with a 1000 chambers in it, there's a bullet in 1 chamber, and you said 'Put it up to your temple, how much do you want to be paid to pull it once?' I'm not going to pull it."
Mar 23, 2021 • 10 tweets • 2 min read
Every single time my wife opens an $ETSY package, she sees a handwritten note from the seller. She goes "Awww. That's so sweet" and she posts a picture of the note along with the item on her IG stories. The number of times she has done that with an $AMZN package : 0. Thesis : Internet has democratized entrepreneurship. That's the theme of last 2 decades and it's going to be the theme for next 2 decades as well.
That's a change I guarantee will never revert. $EBAY $AMZN $SHOP $FB continue to contribute and benefit from this theme.
Mar 22, 2021 • 10 tweets • 2 min read
$ADSK was THE software to learn when I was growing up. My dad showed off CAD to me 20 years ago when his employer was building a textile factory back in India. The learning curve and high switching costs, combined with $ADSK's iteration on old products and introduction new products to students for free produces a wide moat and strong momentum in the user base.

Informative podcast :
*
Feb 20, 2021 • 5 tweets • 1 min read
"This is the key part of Warren Buffett’s philosophy that folks overlook. He talks a lot about return on retained earnings. Whether keeping an extra dollar in a business tends to result in an extra dollar being added to the market cap."
Good read! "Don’t confuse how fast a car is moving at this instant with how much distance it’s covered in the past hour"
Feb 18, 2021 • 6 tweets • 2 min read
"If you buy into a leveraged company & it deleverages over the next 10 yrs, your returns would be very poor compared to what you'd expect, they'd be much lower than the business. Let's say you are paying a 5% interest rate on your bonds/loans, you're paying like 4% after tax." "If you have a company, and they take 3/4/5 years in a row of free cash flow & dedicate most of it, while you own the stock, into paying down that debt, it's the same as if they went out & invested in a project that returns 4% after tax"
Feb 17, 2021 • 11 tweets • 2 min read
$CVS 2021 guidance -->
Cashflow from operations : $12B
Capex : $3B
Adjusted operating income across segments :
* Health Care Benefits : $5B
* Pharmacy Services : $6B
* Retail/Long-Term Care : $6.5B

3 segments of almost equal size.

Cue the cross selling / flywheel slide. After Aetna acquisition, leverage ratio is now at 4x. Goal is to reduce it to 3x by 2022.

"We've hit the 2021 run rate and the synergies are fully embedded in the business."
Feb 17, 2021 • 5 tweets • 1 min read
Complex US healthcare system is complex.

Trying to wrap my head around Pharmacy Benefit Management companies (PBMs).

en.wikipedia.org/wiki/Pharmacy_… What is a Pharmacy Benefit Management (PBM) company?

These are companies that health insurance providers hire to handle
1) Price negotiations
2) Insurance claims
3) Distribution of prescription drugs.
Feb 4, 2021 • 9 tweets • 2 min read
A neat little trick that I've been following lately to save my 'Coffee Can Portfolio' from my myself & my impatience:

I've two brokerages; one for my 'Working Capital Portfolio' and other for my 'Coffee Can Portfolio'. Both are long term oriented, but serve different purposes. Working Capital Portfolio :

The is where I initiate a starter position in a stock. I initiate starter positions for 2 reasons :
1) Gain further conviction.
2) Wait for a right price on a company with fantastic economics.

I log into this account about once a week.
Jan 31, 2021 • 13 tweets • 3 min read
From 1960 to 1980 --> Inflation increased from 2% to 13%.

From 1980 to 2000 --> Inflation dropped from 13% back to 2%.

Inflation cycles are much longer and it creeps in on us slowly. It's in best interest of younger investors to study history and learn from the past. "Stable prices provide a sense of security. They are like safe streets, clean drinking water and dependable electricity. Their importance is noticed only when they are missing."