Have you ever wondered why price of large cap cos like Reliance ind. Ltd. or Apple inc. fluctuates less in magnitude but share price of a small cap co witnesses huge volatility?
A simple thread to explain the economics behind stock fluctuations!👇🧵
#investing #financialliteracy

1. Penny stocks show huge volatility but on the other hand stock of large cap companies show little fluctuations.
Did you ever observe how ‘Foreign Exchange’ rates show little fluctuation and are range bound?
Let us understand the economics behind it.

2. In this thread we will learn two things,
👉Why large companies show quick change in their prices though the magnitude of change is less?
👉What causes huge jump in prices of penny stocks? Or why on a bad day they can easily fall with huge magnitude?

3. First things first. Let us understand who decides the price of goods? Is it the ‘Buyer(s)’ or the ‘Seller(s)’?
The answer to this basic question is that price is decided by both of them.

This is because,
👉 A ‘Buyer’ would always be willing to buy any commodity at lesser price.
👉 A ‘Seller’, on the other hand would try to sell his product at a greater price.

BREAKING: The EU and UK have agreed a trusted trader scheme that would mean exemptions from tariffs for up to 98pc of goods flowing between Great Britain and Northern Ireland from January 1, @rtenews has learned.
The other 2% wd potentially avail of rebates from any tariffs.

2/ Tariffs would mostly only apply if no free trade agreement is concluded between the EU and UK.

Both sides have also agreed that agrifood products coming from GB to Northern Ireland will be exempt from requiring export health certificates for a period of at least three months

3/ These have proved the biggest concern for UK supermarket chains in NI, who rely on large and mixed consignments of food coming from GB depots.
Export health certificates can cost up to £200 per product and need to be signed off by a designated veterinary inspector.

4/ It’s understood the issue of how supermkts will comply with EU food safety rules could be dealt with through a UK commitment - possibly a declaration - that it does not intend to change its food safety rules from Jan 1. At that point the rules will be the same as the EU's.

5/ The trusted trade scheme would be subject to a review, or sunset clause, three and a half years after the Protocol comes into effect, according to an internal EU briefing

Australian iron ore producer Fortescue (FMG AU) is a great example of how value investing often works in practice. In 2018 the stock was trading for A$4. It was cheap at spot iron ore - a mid single digit FCF multiple, even w historically high discounts on low-grade 58pc Fe (1/n)

The reason it was cheap was investors believed the increased 58pc discount was structural not cyclical, and benchmark iron ore prices of US$60-70/MT were not sustainable - Chinese demand would surely falter, and send prices down to US$40-50/MT (2/n).

I basically agreed with the market. That was also my expectation. But I decided to buy some anyway because I recognized I could be wrong, and if either iron ore prices stayed at US$60/MT or rose; OR 58pc discounts narrowed to historical levels, the stock would prove very cheap.

Meanwhile, the stock was fairly priced on the base case market expectation (mirroring my own), at perhaps a HSD FCF yield. Not many investors make an investment on the basis that they might be wrong, but I did due to (1) the asymmetry; and (2) the future being hard to predict.

So what happened? Unexpectedly, there was a Vale dam failure in Brazil, taking out several 10ms MT of supply. Chinese demand remained strong. 58pc discounts narrowed, and covid further interrupted Brazilian supply, while Chinese have stimulated infra to offset covid headwinds.

The importance of $XHV and its ecosystem of coming xAssets, in a world against privacy. $xUSD $BTC

A Thread.

1/

Crypto started out, with a brilliant idea. The idea was to create a trustless system of money, that didn't know borders, and catered to all, while granting financial control and privacy to everyone. Thus, bitcoin was invented. $BTC $XHV $xUSD

2/

Over the last 12 years since bitcoin came to the world with a solution against centralized finance, it has spawned thousands of new crypto currencies all targeting specific use cases, and innovative new solutions for almost all industries that exist. $BTC $XHV $xUSD

3/

The sheer amount of potential crypto can offer to the world, is beyond words. It's bigger than anyone can explain, because it changes the economic model into a new system of economics entirely. This has not gone unnoticed by governments. $BTC $XHV $xUSD

4/

Governments are realizing now, that crypto is not going away, and that, it's very easy for people to take control of their finances without needing a bank, or reporting it for income tax. It's a power the people have never had. $BTC $XHV $xUSD

5/

"Pets are family". Been tracking 13 stocks but only own $CHWY. I will add BarkBox, $STIC when it lists. The company has a valuation of $1.6B with $350M in revenue, profitable
Others: #PetsAreFamily
$CHD
$CHWY
$ELAN
$FRPT
$HSKA
$IDXX
$PAWZ
$PETQ
$PETS
$SPB
$TRUP
$TSCO
$ZTS

BarkBox is a monthly subscription box filled with dog toys and treats. Co. has 1 million + subscribers to its monthly box. Its sells its products on $TGT and $AMZN as well.
Founded in Dec 2011, by Matt Meeker, Carly Strife, Henrik Werdelin in New York.

One month your dog might receive a collection of treats and toys. BarkBox might send him on a journey through Chewrassic Bark. Each box contains two innovative toys, two bags of all-natural treats, a chew, and a specially curated item from the month's themed collection.

Every toy is designed by in-house industrial designers, made for the way dogs play and approved by the company's own test dogs. You can choose a one-month subscription ($29), six months ($25/box), or 12 months ($22/box).

BarkBox is very allergy friendly. Every BarkBox is free from corn, wheat, and soy, which greatly reduces the risk for triggering allergies and food sensitivities.
You can reorder certain items or purchase items from other collections online.

There is a money-back guarantee

1/18

Long thread ahead of $TSLA's first S&P week with some advice.

First off, to people only holding stock, my general advice is sit back, relax, and watch the show. Even before factoring in Tesla Energy and Autobidder, EVTOL jets, cooperation with The Boring Company, HVACs,

2/18

manufacturing as a service, electric boats, and various other potential lines of business, Tesla's long-term potential is enormous.

Tesla is basically untouchable in automotive, autonomy, and autonomous mobility as a service. Tesla will be a monster of a company 10-15 ...

3/18

years from now, selling and managing massive fleets of AEVs. If you're worried $TSLA might be becoming overvalued, perhaps so looking backwards, but it's still a hell of an investment looking far into the future.

I explained all this in this

4/18

For people who have no choice but to time the market during the next couple of weeks, either because they hold options, or because of a need to sell some shares (living expenses, big purchase, etc.), I have three pieces of advice.

5/18

My first piece of advice is to be aware of what outcomes are unacceptable to you, and to eliminate the possibility of them occurring entirely.

thread

LESS IS MORE?

Fishing Opportunities

1. I'm reading the summary on the UK/EU trade agreement & have some concerns. It's not the full blown text, just an outline of the negotiated agreement so I may be needlessly cynical, we'll have to wait & see.

2. The 25% UK uplift of the value the EU member states catch in UK waters.

I see difficulties with this whichever way I try to spin it to myself:
a) The EU are reducing quotas in fishing waters for some species due to issues with sustainability.

3. So our uplift could cause over fishing of stocks in our own waters. The summary doesn't mention if/how EU access to our waters will be reduced?

b) But assuming the quotas are reduced in line with other member states waters, we could have a reduced income rather than uplift.

4. The 25% uplift is implemented over 5 yrs. So for the sake of argument let's assume it's 5% per yr. But if EU quotas are being reduced by an average of say 10% by weight, that 10% has a value attached to it & our annual uplift will be calculated in line with the lower quotas.

5. Although in theory there'd be a point in 2 yrs where our 5% increments would match the reduced EU quotas, the scientific advisers are calling for greater reductions in quotas to allow stocks to recover, so it's likely quotas will be cut again.

0/ We've highlighted FinTech infrastructure co's like BR, FIS, JKHY, MA, V, ICE, NDAQ, etc. as companies w/ a variety of moats that have led to dominant mkt share & outperformance despite being 50+ years old on avg.

$FISV had their investor day yesterday and laid out the why.

1/ $FISV highlights the fact that they have #1 market share in core accounting processing for $1-$50B FI’s; they are doing $1.0B in global e-Commerce revenue, and have more than $30B available for capital allocation over the next 5 years (read more M&A for FinTech co's)

2/ They have global reach with clients in more than 100 countries, more than 1,000 products & services, 10,000+ FI clients, & 6M merchant locations.

All while being #1 as a core account processor, merchant acquirer, bill pay, P2P payments, etc...

3/ This business model + market positioning has led to incredibly strong outperformance since inception ~35 years ago with cumulative $FISV shareholder returns of +42,171% vs. the $SPY at 3,327% & Nasdaq at 4,355%.

4/ $FISV has grown via a series of acquisitions over the past 30 years most recently the $22B tie up w/ First Data.

They highlight the progress on the deal & new goals post integration.

M&A is a skill & FISV has it financially; tech integration leaves something to be desired

One of an interesting thing in Current stock market,is as soon as Saturn progressing after Retrogression phase, gained the speed in trine to Rahu - Both raw Metals & oil prices are doing good. At the sametime Rahu trine alignment with Jupiter has also boomed the bank market.

Trine movement of Rahu along with Saturn and Jupiter has broken all the bullish trend setter records and amplified the internal economy. In March 2020, Pluto, Ketu and Mars has totally shaken the market into bearish trend.Keep Remember Rahu is trend setter - Strong Bearish,

Ketu - is Trend breaker- Strong bearish.

Untill and unless Jupiter is keep moving aggressively without any affliction with Atichari Motion market will keep booming.

Period of Affliction will start from 21 December 2020 onward & when Sun will Join Jupiter in January 2021

Jupiter will be in its most aggressive motion, This is the period when Market will start fluctuating real bad in January month upto Feburary 2021 period.

From 4th of January 2021 onward upto 28th January, 10th Feburary 2021, as soon as venus moves toward dhanu & Capricorn, when complete Sarpa dosha will begin, Jupiter will be in super speed with Sun, there will be heavy conjunction of 6 planet's form in Capricorn-

According to S3 Partners, $TSLA shorts have lost $35B in 2020. I talk with many TSLA shorts, and have been on the other side of their trade all year. Here is where $TSLAQ got it wrong: Way under-estimating TSLA TAM, and in thinking ICE-branded EV launches would hurt TSLA.

2/ Street estimates are soaring. $TSLA 2020 and 2021 EPS ests have almost doubled this year, as Y has quickly become TSLA ‘s best selling model with less than 20% cannibaliz’n of M3. Model Y is now being taken global. Meanwhile, China volumes will be 50% of TSLA volume in 2021.

3/ When I argued with shorts about Model Y, they missed that Y was a small SUV and M3 was a small sedan. The two don’t compete. And yet, shorts would argue Y would massively cannibalize M3. Y more than doubled $TSLA ‘s US TAM, from 25% to 66%, and will do the same globally.

4/ From my $TSLAQ discussions, I gathered that few had taken the time to drive the various TSLA models, esp the new Y. None did focus groups with TSLA owners, or very few discussed TSLA with rival dealers, all which shocked me. Their research consisted mainly of current year...

5/ ...and backward-looking financials, and their best materials were charts comparing $TSLA mkt value to ICE mkt values - mindless since going forward TSLA’s competitors are AMZN, GOOG, AAPL, NIO, and RIVN. $TSLAQ would make fun of my forecasts to 2025, saying it was impossible.

1. Does the new trade deal deliver for the UK and the EU automotive sectors? I and other colleagues have been working tirelessly over Christmas to answer this question – thanks @mattogg @Mulk_Lloyd!!. Here are my thoughts - warning, very long 🧵ahead!

2. First, a necessary clarification. Comparing the UK-EU FTA with the status quo is simply futile. Even the most ambitious FTA cannot – and it is not intended to – deliver the benefits of the EU Single Market and Customs Union.

3. There is only so much an FTA can deliver. No FTA could avoid creating a customs border. No FTA could waive origin rules. No FTA could avoid new non-tariff barriers. It is no mystery that UK Automotive would have preferred other options precisely because an FTA has limits.

4. To compare apples with apples, a fairer question is not whether the FTA is better than the Single Market - it isn’t - but whether this is the most ambitious FTA we could get for the sector. And I hope the rest of the thread can shed some lights on this point.

5. Having a deal is, in itself, a major positive. The idea that having an FTA or not having one makes little difference could be true for some sectors. This is certainly not the case for Automotive. Without an FTA, tariffs would certainly apply.

A THREAD on some insightful thoughts about Investing & Financial Independence by Rohit Chauhan (@rohitchauhan) Sir:

1/

The unfortunate reality of markets is that the last one to panic loses the most. So if you must panic, do it early or else don’t.

2/10

Investing is such a solitary activity where you are fighting your own bias and lack of knowledge; that it is amazing to see people argue and fight with others about the merit of their investment ideas.

Other than preserving your ego, what good can defending your ideas do?

3/

Thank god, my parents did not do a DCF on me like a lot of investors do in their analysis. Negative free cash flow during investment phase (school & college) & conclude my NPV was -ve. Good thing there is no way to short your kids. U are forced to be long & hope for the best.

4/10

It's a privileged life if one of the main worries in life is how to beat the market.

Less than 0.1% of humanity has this worry. It is the highest of high class problem.

5/10

25x is a good threshold for financial independence, where x is annual expenses.

Focus on fulfillment and not money beyond that. If you still chase money, then it’s not the money you are after.

More thoughts on $FISV following investor day last week

This time focused on the newly named FinTech segment: core account processing and digital banking arm of legacy Fiserv

TLDR: While it’s the smallest segment (~20% of FISV revenue), it’s the “glue” that ties things together

1) $FISV FinTech segment is the #1 provider of core processing and digital banking solutions to the ~11,000 banks and credit unions in the US

Its mission critical systems power 3,700 FIs:
- core processor for 1 out of every 3 banks
- digital offering for 95 out of top 100 banks

2) This segment dates back to the origins of $FISV, and today it’s the market share leader with nearly 40% of all US banks relying on FISV to power everything from new account opening, items processing, online/mobile banking, regulatory compliance, general ledger/reporting, etc

3) Not just the market leader, $FISV is also has a best-in-class offering

Well regarded Aite Group rates it better than nearest competitors $FIS $JKHY

Today, these 3 dominate the market and maintain an oligopoly structure, with various other point solutions pretty far behind

4) $FIS skews larger multinational banks (2x+ as many $10B+ banks as FISV/JKHY combined) and $JKHY is 1,700+ community/credit unions

However, the sweet spot for $FISV is $1-50B banks (now 500+ as clients) while also maintaining a strong base of 3,200+ community/credit unions

A nobody cares thread.

Nobody cares about the things that matter - getting investors in, helping new distributors advisors, making things (Slightly) easier for investors, honest mis-selling etc.

Nobody cares about direct plans of mutual funds

Nobody cares about about mutual funds either

Very few care about mutual funds. Just 2.1 crore unique investors. If you probably take out HNIs/institutions in this, that's maybe 20-30%, what's left are the common gareeb folks.

Nobody cares about direct equity investing either.

Next time when someone says, people are moving away from mutual funds to direct equities, show them this and punch them in the throat.

Only 1.5 cr active demat accounts. If you remove duplicates, maybe 60% of this?

Nobody cares because very few people have money to care either?

With a fixed supply of money, holding the money itself is similar to investing in a global index fund which offers no yield but appreciates with global productivity. Anyone can be an investor; zero fees, experience, or professional management required.

Anyone who earns money can expect to keep it and watch it appreciate, without needing to do any more work.

With easy money, you need to beat inflation to keep the value you earned & for that, you need several professionals working full-time trained for years and plenty of luck

Imagine if every child could expect any money they earn or get as a gift to appreciate over time without needing professional management. How much more would children grow up to value saving and low time preference?

Imagine if every professional could focus on their job and watch their savings accumulate & gain value without needing to have a side job trying to figure out what stocks, bonds, commodities, and other arcane instruments to buy & who to hire to manage them all?

Imagine if the old, retired, and widowed could just count on their savings maintaining value without having to follow & speculate on global macro trends & insane monetary policies.

#FranklinTempleton investors - our primary objective should be to safeguard our investment and not punish FT. Litigations will and should continue. But trying to teach FT a lesson by voting NO is shooting ourselves in the foot!!! Fire sale will destroy our investment

#FranklinTempleton investors - FT is anyways under a scanner. They cannot escape if they are doing anything wrong. But if Funds re-open , no one can save us and we will be doomed by our own choices

#FranklinTempleton investors - I know that everyone that FT has cheated us by illegally winding funds, however the point is that if we reopen now - everyone will redeem and it will be a panic situation where everyone will loose. A better option is to let the funds wind up orderly

Sam Walton: Made in America
[Autobiography of Wal-Mart's Founder]

- Creating Value for customers
- Being obsessed with Cost Control
- Taking care of employees
- Learning and Innovating
- Why stores Failed
- Sam’s Rules for Building a Business(Must Read)

A Thread 🧵👇

2/ Wal-Mart today is a $400B market-cap company with over $500B in revenues, $15B of net profits, and over $25B in operating cash flows. It also owns a majority stake in Flipkart, and thereby in Myntra and PhonePe.

3/ Develop Communication/People’s skill: “I learned early on that one of the secrets to campus leadership was the simplest thing of all, speak to people coming down the sidewalk before they speak to you.”

4/ Be obsessed with providing value to the customers, save them money by tightly controlling costs: On business trips, Sam Walton and his colleagues used to stay in one or two rooms, once 8 of them shared one room. Expenses were capped at 1% of the purchases.

5/ “We exist to provide value to our customers, which means that in addition to quality and service, we have to save them money. Every time Walmart spends one dollar foolishly, it comes right out of our customer’s pockets."