BC FINANCE
Saved by @tradrdoc

I'm lucky to attain financial freedom before 30.

I credit Fintwit for my learnings.

Here's 10 key concepts every investor must know:

1. $$ needed to retire
2. Researching a business
3. Reading annual reports
4. Reading earnings calls
5. Criteria of a multi bagger

(Read on...)

 6. Holding a multi bagger
7. Economic moats
8. When to buy a stock
9. Earnings vs cashflow
10. Traits of quality companies

Here's my 10 favourite threads on these concepts:
1. How much $$ do you need to retire

Before you start, you must know the end game.

To meet your retirement goals...

How much $$ do you need in your portfolio?

10-K Diver does a good job explaining what's a safe withdrawl rate.

Hint: It's NOT 4%.
https://t.co/9fYzeiImQz
2. Research a business

Your investment returns are a lagging indicator.

Instead, your research skills are the leading predictor of your results.

Conclusion?

To be a good investor, you must be a great business researcher.

Start with this:
https://t.co/LnsbkeBI8f
3. Reading annual reports

This is the bread and butter of a good business analyst.

You cannot just listen to opinions from others.

You must learn to deep dive a business and make your own judgments.

Start with the 10k.

Ming Zhao explains it well:
https://t.co/e7grxwrKkA
4. Reading earnings call transcripts

Here's my secret:

To understand a business in the shortest time...

Read the latest 6-8 earnings transcripts.

There's only one problem - It can get dry.

Ryan's process of blending audio with visual is a great hack:
https://t.co/ExdzI7tJ6a
5. Criteria of multi baggers

All good investing is pattern recognition.

But first, you need to know what patterns to look for.

Qualities like mindshare, optionality, pricing power.

Brian Feroldi breaks down the 10 traits of multi baggers here:
https://t.co/tJ7XF5Xe9q
6. Holding a multi bagger

To profit from a multi bagger...

you first need to HOLD a multi bagger.

Many investors forget that the big money is made from the holding.

Check out this sick thread of how Ram achieved a 100 bagger from Lululemon:
https://t.co/Skv2qLnudK
7. Economic Moats

This concept was made popular by Pat Dorsey.

He shared 4 main moats in his book "The Little Book That Builds Wealth".

Brand...
Network effects...
Switching costs...
Cost advantages...

Thomas does a good job explaining them:
https://t.co/Gg0pqJ3KPG
8. When to buy a stock

I first learnt this years ago from Tom Engle, aka TMF100.

It was in a private board on The Motley Fool.

It taught me how to buy stocks at good value points.

Brian took it a step further and elaborated with real examples:
https://t.co/BPfwr8raaA
9. Earnings vs cashflow

You need to know the difference.

Because many of the best growth companies have negative earnings.

They depress earnings on purpose. To invest in growth.

To value these companies well, you need to understand cash flow.
https://t.co/0nFpJeY7pN
10. Traits of quality companies

I leave the best for the last.

Remember, you're not buying a stock ticker.

You are owning companies.

So learn to spot the attributes of a high quality business.

Thank you Patrick for this gem.

My jaw dropped:
https://t.co/c04ccd683A
*BONUS:

If you enjoyed this and want more useful investing principles...

Here's a few more of my favourite Tweets.

Be sure to check out this thread:
https://t.co/ebbTfPXFVJ
If you found this helpful...

Follow me here at @heymaxkoh

I share about how I attained financial freedom, while still working at a 9-5 job.

Also...

If you'd like to find this thread easily later, you can hop back to the top and retweet this.

https://t.co/j2alJHM42w

More from Max Koh

Max Koh
Max Koh
@heymaxkoh
10 super simple steps to research a stock.

In just 3-4 hours:

Overview:

1. Find a sexy angle
2. Analyze the financials
3. Read the annual report
4. Get skin in the game
5. Read earnings calls
6. Understand the leader
7. Understand value prop
8. Read analysis by others
9. Monitor execution
10. Maintenance due diligence

Lets go!

1. Find a sexy story or angle

This is how I begin my research.

It starts with either:

• a product
• a story
• a founder

... that gets me curious.

I think stock screeners are helpful...

But I don’t use them.

I prefer to research companies that genuinely excite me.

2. Analyze the financials

I then proceed to analyze the numbers for the last 2-3 years.

Which is about 8-12 quarters.

Stuff like:

- Revenue growth
- Gross and EBIT margins
- Key customer metrics
- Free cash flow

Seeing the numbers tells me a story.

3. Read the annual report

If the numbers and story are exciting...

I dig deeper into the business through the 10K.

I want to understand the business model...

How they make money...

And the customers they serve.

A step by step guide for
ALL
Max Koh
Max Koh
@heymaxkoh
One thing I'm always most excited about as an investor:

Watching CEO interviews.

Over the years, I’ve watched over 100s of them.

Here’s 25 traits I’ve seen in the very best leaders.

You can swipe these into your own framework to evaluate management teams:

1. They don’t rely on external motivation

Not status or money.

Instead, they seem to be driven an inner fire.

Sometimes it’s to make the world a better place.

Other times, it’s to prove themselves right.

And that's why they can keep going even after they're already rich AF.

2. They're not human

They don't see the world like 99% of us

Whether it’s creating a culture that’s a sports team vs a family...

Or thinking of everything from first principles…

They have a different modus operandi.

This helps them see solutions that 99% of us muggles miss.

3. They enjoy founder-company fit

The great leaders are great because:

They’re in a company that plays to their unique personality.

The stars have to align for a great leader to be made.

The product + business model + personality of the leader must match.

4. They give lots of freedom and autonomy

They know how to unleash the potential in their team

They know how to paint an exciting vision…

And then give their team the space to roam free.

They understand that people flourish when you give them room to explore and experiment.
STARTUP
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Max Koh
Max Koh
@heymaxkoh
This is value investor, Allan Mecham.

He dropped out of college at age 22 to start his fund, Arlington Value.

From 2008-2016, they did a CAGR of 30% over 8.5 years!

And in his fund letters, he shared his best frameworks for investing in companies.

Here's a breakdown of each:


1. Adopt a mindset for longevity

He focuses on variables that affect a business' durability.

Stuff like valuation doesn't matter if the business quality is misjudged.

Since a company's value is determined by its future cash flows...

Hence evaluating its future is key


2. Stay within your circle of competence

Allan is aware that his CoC is tiny!

Thus, he rarely buys companies that he:

• Hasn't researched
• Hasn't followed for at least a few years.

Because the best way to study a business is to observe its execution overtime.


3. Embrace volatility as a gift

Public markets offer you amazing deals you will never get in the private markets!

It's all about being patient.

The underlying value of a business is much more stable than the stock.

So you can buy great businesses that are mispriced!


4. Avoid noise and news

More information can give you a false sense of confidence.

It can create an illusion of "knowledge", and make you think many things are important.

The key is to know what are the 3-5 main variables in the company, and focus on those.

Ignore the rest.
FINANCE
Max Koh
Max Koh
@heymaxkoh
2 weeks ago, I started reading "Fooled by Randomness" by Nassim Taleb.

WOW, It's been mindblowing!

Thanks to @dvassallo 's recommendation.

Inside, there's a part he talks about how to deal with volatility.

Here’s 6 big lessons that are useful in the current market crash:


Lesson #1:
Negative emotions of seeing your stocks drop > Positive emotion from seeing your stocks rise.

"A negative pang is not offset by a positive one...

Some psychologists estimate the negative effect for an average loss to be up to 2.5 the magnitude of a positive one)...

... At the end of every day the dentist will be emotionally drained.

If the unpleasurable minute is worse in reverse pleasure than the pleasurable minute is in pleasure terms, then the dentist incurs a large deficit when examining his performance at a high frequency."

Lesson #2:
When we zoom out and check the prices less frequently, we are less affected by negative emotions.

Because over a longer time horizon, the market tends to rise more than it goes down.
BOOKS
Max Koh
Max Koh
@heymaxkoh
"The best investments comes from the best businesses"

One of the investors who's made a big impact on me:

@JohnHuber72 of Saber Capital

I spent days pouring thru his articles and interviews in my early days...

Even had a doc with 20 pages of notes!

Here's my top 15 lessons:

1. You don't need original or unique investing ideas

You can simply wait for great businesses to be mispriced.

And then pounce when that happens.

In the meanwhile, don't dilute your portfolio with simply "good ideas"

Only accept the "great" ones


2. John's investing criteria for idiots

• Easy to understand businesses

• Generate lots of FCF

• Partner with good management teams

And then...

Sit back and WAIT for the fat pitch


3. Distaste for strikeouts > Desire for homeruns

John is okay with not making 10x returns in a short time.

And he has come to accept that.

Every investment strategy comes with its own features.

The key is knowing what they are and making sure it fits your personality.


4. One years results don't mean much

This was taken from John's 2016 letter...

1 year results can be random.

Don't feel too sad if you underperform...

Or get too confident when you outperform.

Zoom out and look at your performance over multi year periods instead.
MENTAL MODELS

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Well this could be the LAST Decode/Thread of the Year ...

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...
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1/

Get a cup of coffee.

In this thread, we'll cover *State Quantities* and *Flow Quantities*.

This mental model can help us analyze many different entities -- from complex engineering systems to publicly traded companies.


2/

A "State Quantity" is something that's associated with a *specific point in time*.

For example, the number of followers a Twitter account has is a state quantity. This number can go up and down over time. But at any one *specific* time point, it's fixed.

3/

Similarly, the amount of cash a company has is a state quantity.

This cash balance can also rise and fall over time.

But pick any one *specific* time point -- and the company can only have one *specific* cash balance at that time point.

4/

By contrast, a "Flow Quantity" is something that's associated with a time *interval* rather than a time *point*.

For example, the number of followers gained by a Twitter account is a flow quantity. It's meaningful only when we specify a time interval (eg, the last 30 days).

5/

A simple analogy is that a State Quantity is like a photo -- a snapshot at a particular *point* in time.

But a Flow Quantity is like a video -- a record of events that take place during a particular time *interval*.
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Brian Feroldi
Brian Feroldi
@BrianFeroldi
1/ My Mission: To Spread Financial Wellness (thread)

Here’s what "financial wellness" means to me

⬇️⬇️⬇️⬇️⬇️⬇️⬇️⬇️⬇️⬇️

2/ Mindset

Humans are programmed to think short-term

Evolutionary, thinking short-term makes sense. It helps with survival.

Financial wellness is all about training yourself to develop a long-term mindset

Not easy -- it takes practice


3/ Mindset

If you join the right tribes, you can’t help but improve

My favs:
@AffordAnything
@ChooseFiFI
FinTwit
@MicroCapClub
@themotleyfoolFool
@visualizevalue

Twitter / Podcasts / Blogs / YouTube -- when used correctly -- are amazing


4/ Mindset

Educate yourself - constantly!

Especially about:

1⃣Money
2⃣Relationships
3⃣Health

These 3 categories have an outsized influence on all areas of your life

Books


5/ Career

In the beginning, focus on growing your income

Do more than what is expected

Become a lynchpin

Find a career that you ENJOY (<- important!) that also has high-income potential

Start a side hustle (<- important!)

Build your talent
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Subhadip Nandy
Subhadip Nandy
@SubhadipNandy16
Rule 4 : If buying a naked option, always ensure that implied volatility is low. This can be understood from the level of IV vis a vis historical IV levels. Use IVR or IVP etc.
For a naked option to make money, it's better if IV rises or at least stays flat.


This is a thread I wrote on IV, IVR etc
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Jack Poulson
Jack Poulson
@_jack_poulson
Palantir's 2020 Q4 Earnings call goes live in half an hour.


The waiting room is now up.


In the mean time, you can read their just-filed

Which is essentially just a re-direct to this press

Palantir's Consolidated Statement of Operations is pretty interesting.

They lost more than twice as much money in 2020 ($1.17B) as in 2019 ($580M). Despite a $12.6M tax benefit in 2020 vs. $12.4M tax provision in 2019.

But stonks.
FINANCE

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The 3 big things that made the 1980's/early 1990's surreal for me.

1) Satanic Panic - satanism in the day cares ahhhh!

2) "Repressed memory" syndrome

3) Facilitated Communication [FC]

All 3 led to massive abuse.

"Therapists" -and I use the term to describe these quacks loosely - would hypnotize people & convince they they were 'reliving' past memories of Mom & Dad killing babies in Satanic rituals in the basement while they were growing up.

Other 'therapists' would badger kids until they invented stories about watching alligators eat babies dropped into a lake from a hot air balloon. Kids would deny anything happened for hours until the therapist 'broke through' and 'found' the 'truth'.

FC was a movement that started with the claim severely handicapped individuals were able to 'type' legible sentences & communicate if a 'helper' guided their hands over a keyboard.
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RISHI PINGALA:THE ANCIENT INDIAN SAGE DISCREDITED FOR HIS MAJOR CONTRIBUTIONS TO MATHEMATICS & PHI

Have you ever heard about,"The Golden Ratio"?
The Golden Ratio or Phi(Greek) is a mathematical ratio of nature. Mother Nature is the most exquisite artist in herself.


&Its this Phi she uses to create all the beauty in World.
If anyone uses this ratio correctly in their art,it can turn into a spell-binding piece of work.Such is the significance of'Phi'.But my thread isn't about it.Its about somethin called'Fibonacci Series'&who actually made it


Phi is related to Fibonacci series(0,1,1,2,3,5,8,13,21,34...)
&this series is responsible for everything dat is beautiful on this planet. Just try to calculate the ratio of any 2 successive numbers ÷ each of them by the number before it in above infinite series.

E.g. 3/2=1.5, 5/3=1.666, 8/5=1.6, 34/21=1.61904 and so on. Did you notice something? The ratio is coming almost same every time. This ratio is called 'Phi 'which is numerically represented as 1:1.618. This Golden Spiral is made in exact proportion of 1:1.618.


The thing I want to emphasize here is that we always find only those things appealing and attractive that have Phi. It's in our subconscious. Isn't it some revelation? We are the part of this Divine proportion of the God or the Mother Nature. Check these:
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With the coming challenge this week, I decided to compile a list of design resources all makers can use to spice up ✨ their projects! 😍

Thread 👇

🚨 DrawKit: Gorgeous, hand made illustrations by @JamesDaly90!

Also, one FREE custom illustration for all 24hrstartup

🙅‍♂️💩 @noshit_app: No shit - just great design resources! Find fonts, templates, and daily design inspiration. By maker @HarowitzBlack!

🛠 Figma: Visual mockup + prototyping tool. Make great mockups of your project!

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🤯 Digital Psychology: A great resource on how to design products that convert visitors to 🤑 sales. By maker @DaniStefanovic!

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Anu Satheesh
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Ameda Temple
Ernakulam, Kerala 🚩
#keralatemples

Ameda Ksetram is located in the banks of Vembanad Lake. Temple is very unique and Powerful Sarpa Kavu.
Parashurama did Prathishta here. Vilakku which was lighted by Parasurama is still seen inside the temple.


The oil from this lamp is given to bhakthas for recovering from illness.

Sthala puranam says that, Once, when Parashurama was travelling through Kerala, he reached this place. As it was evening, he stepped into the Lake for Sandhya Vandanam
At that Sapthamathrukkal 👇


(Brahmini, maheshwari, kowmari, vaishnavi, varahi, indirani and chamundi) were travelling there on a tortoise through the water. The tortoise was unable to move, because the Water had made its way for Parashurama. The place where the tortoise became Still came to be known as 👇


Aama Ni Nidayam' ( Aama means tortoise) and later become ‘Ameda’. Parashurama came to know about the journey of Sapthamathrukkal. Thus, he did Prathishta for the Sapthamathrukkal here.
7 forms of Aadi Parashakthi are Sapthamathrukkal. Veerabhadra and Ganesha have Sannidhi here.


The main Garbhagriham in the temple is the Sapthamathrukkal. There are Sannidhi to Nagas, Nagayakshi and Vishnu too. Sarparadhana or snake worship is done here. Naga Panchami is famous here. Those who have Naga Dosham come here and get relieved of their Doshas.
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THE NOTICEABLE SIGNS OBSERVED ON IMPENDING DEATH(मृत्यु के संकेत या चिन्ह)

As per Skanda Puran, Kartikeya had narrated to Muni Agastya about the signs of the coming death. This is as per this ancient scripture.


If one experiences the air coming out of right nostril continuously then it is observed that the person dies within three years. If the breathing is continuous towards upper side from both the nostrils, then the person can die within two three days.

If the breathing is through the mouth instead of the nostrils then the person may live only for two days. The person should take into coignance these signs of the occurance of any sudden death.

As per astrology when the Surya is in the 7th house and Chandrama is in its own house and the breathing is only through the right nostril then the danger exists. If you see a yellow black coloured figure who becomes invisible immediately then the life span is limited to 2 years.

If any person sneezes, passes urine, stool and semen all together he has only a year more to live. If a person sees blue coloured snakes flying in the sky then he has only six more months to live. If a person sees any thing opposite to its real self like colours
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