Insights from Philip Fisher. One of the best docs I came across for individual investors.

Phenomenal effort by @SiddharthVoraPL @PLIndiaOnline 👏👏

cc: @dmuthuk @Gautam__Baid @saxena_puru

https://t.co/K19gWk9TFO

Philip Fisher's 15 points, simplified. ⬇️

His Investment strategy and Search strategy. ⬇️

Full scale scuttlebutt is not possible for individual investors (lack of time, resources, contacts), but with efficient search & communication online (tuning out the noise), there are still some ways to do good research.

Good sequence of steps to filter from a wider universe of companies to the few promising ones that meet the criteria. ⬇️

Excellent Checklist for Business, Management and Financial characteristics. ⬇️

I guess there's a reason for why I❤️E-commerce so much. These lessons are as important as the returns.

Sharing with few Fintwit friends. @saxena_puru @FromValue @dhaval_kotecha @richard_chu97 @adventuresinfi @BahamaBen9 @TMFJMo @7Innovator @borrowed_ideas @investing_city

Thank god I didn't wait for consistent GAAP profitability before investing in them (like I do for most other sectors). 😂

Positions : $MELI $AMZN $BABA $SHOP $ETSY $W $SE $CHWY

Watchlist : $JD $PDD $FTCH $MWK

Haven't analyzed much : $JMIA $OZON

E-Commerce is one of those sectors where you have to understand the Business model and lot of non-GAAP (but Business driving) metrics & KPIs.

I'm not an expert by any means, but these are some of the things I broadly think about.

✔️Is the Company a Marketplace (1st party, 3rd party, both?) or a Platform, a combination?

✔️Does it handle inventory?

✔️Does it handle payments in house?

✔️What other services is it offering to Merchants (Logistics, Shipping, Credit, Marketing ...)

✔️What other services is it offering to Buyers (Digital Wallet, fast shipping, loyalty rewards....)

✔️How is the Company leveraging the Marketplace or Data Network effects?

"The Millennial Consumer Index" - My picks for a DJIA style 30 stock Index with Co.'s that best serve that demographic.

Fellow Millennials, What would be some of your picks?😀
@richard_chu97 @saxena_puru @FromValue @TMFJMo @dhaval_kotecha @adventuresinfi @reshoftc @BrianFeroldi

My criteria & list is
✔️US Consumer centric
✔️No B2B stuff (unless end-user uses it for non-Business reasons also)

This is just a Fun-Friday exercise. So don't take it too seriously and ask me why your fav co isn't there. Just add yours in the comments. 😂

Picks ⬇️⬇️
E-Commerce : $AMZN $ETSY $W $LULU $CHWY
Entertainment : $GOOG $NFLX $SPOT $ROKU
Social : $FB $SNAP $PINS
Finance : $SQ $PYPL $LMND
Food/Beverage : $CMG $SBUX $DPZ $CELH
Online Services : $MTCH $ZM $DOCU $TDOC $RDFN $FVRR
Life style : $AAPL $TSLA $PTON $ABNB $UBER

Let's keep aside the discussions about recent hype or over-valuations for any of these Co's.

This thread is about which Companies (in my Portfolio/Watchlist/Universe) are doing an awesome job of serving/engaging the Millennial Consumers (in US).

The intersection of Technology, Demographic, and Consumer (behavior) trends are incredibly powerful.⚡️

We often over-estimate what can happen in the short-term (hype) and under-estimate what can happen in 1-2 decades (strong trends).

Time for a Scorecard📊and thesis📑updates for purchases done in Feb/Mar 2020. Last review done in late April. How far things have come since then.😯

Not taking any drastic actions, other than few sells in fully valued, slower growth Co.'s.

Events since then
✔️Co's reporting two Qtrly reports
✔️Accelerating growth for few sectors
✔️Understandable problems for few others
✔️Crazy run-ups & valuations in the last 9 mo's, supported by biz growth in some cases, but mostly due to Monetary factors & Investor enthusiasm...

I usually buy for two scenarios

1⃣Leading Co's within strong secular trends, that also have strong Management Teams and solid Financials (Rev growth, Profitability or improving Margins/FCF prospects, no balance sheet risk...).

These are bought with the intention of holding for the long-term as long as the thesis is intact or getting better. Strongly intend to add along the way. Ex : $ROKU $PINS $TWLO $DOCU $W $NOW $WDAY $NVCR $MTCH in the above table.

2⃣More mature and stable Co.'s but with some growth left (no Financial risk), mainly bought for their current under-valuation, with the intent to sell when the Market or those stocks recover. Ex : $BIP $BUD $VTR $BR $BA in above table.

Excellent compilation of Forbes articles on Warren Buffet from 1969 to 2000s. h/t @valuewalk 👏

@dmuthuk @Gautam__Baid

https://t.co/V7uTYjwSrn

Reading articles from the actual period (instead of books written after he was already widely famous) provides more interesting details on how his investing process evolved over the decades..

->Pure Balancesheet & Valuation based investing(50s/60s)

-> Purchases based on Intangibles/Brands & Moats (70s)

-> Convertible Stocks (80s)

-> Acquiring overall Companies (90s onwards)....

Few interesting quotes from the document.

“Investment is most intelligent when it is most business-like”—in other words, not swayed by emotions, hopes, fads.

“I think of it in terms of buying a whole company just as if I were buying the store down the street. If I were buying the store, I’d want to know all about it."

Excellent resource for Individual investors who want to learn about Accounting and Financial Statements.📊

The concepts are really well explained in a simple, understandable manner for beginners.

cc: @dmuthuk @Gautam__Baid

Content available 👇

Some of my fav sections.

1⃣ The Financial

2⃣ Fundamental Accounting

3⃣ Financial Ratio

Excellent Section on CFI site for learning more about Business Valuation. 👏

Few of my fav articles in the thread

✔️Cash Flow Drivers
Revenues
Gross Margins
EBIT(DA) Margins
Working Capital
Capital Expenditures
Capital

✔️Valuation

✔️DCF Analysis Pros &

✔️Enterprise Value

"4 Simple Rules To Protect Your Portfolio From Yourself" h/t @EconomyApp 👏👏

Excellent article for the current environment (with big drawdowns in many high growth including some quality Co.'s)

My fav parts from the article in the thread below.

"The real threat to your portfolio is not volatility. It's your ability to cope with it. As a result, your portfolio doesn't need to be protected from volatility. It needs to be protected from yourself." 👏

"Volatility refers to how dramatically the price of an investment may change. On the other hand, risk refers to the probability that an investment will underperform the market or result in a permanent loss of capital."

"In short, a stock that sees very large swings in its price over time may be a less risky investment than one that barely moves. The true risk over a long timeframe depends on the underlying business more than the sheer volatility of its share price."

"How much volatility can I tolerate?"

That's the key question that we all need to answer, but it might be the wrong way to tackle the question of temperament.

One of my all-time favorite articles on "Investing Mistakes". h/t Altais Advisors @basrars @vishalmittal22 👏

So many good lessons here for long-term investors in individual stocks. My fav pts in the thread below.

1⃣ Selling good businesses too early: without giving due importance to long term growth outlook and the potential of the business to scale.

If you are invested in a growing business, do not sell it for temporary overvaluation,

there may be some time correction which is fine, which should be managed at a portfolio level. At the same time, one needs to be careful of slowing growth or fundamental deterioration in the business.

2⃣ Going down the Quality curve: Selling good companies, which were growing well, and investing in cheaper but low quality/ growth companies. Over the cycle, this results in sub optimal returns.

3⃣ Waiting for a little lower price to buy: Losing 10-20 baggers waiting for 20-25% lower price! Missing the boat on so many opportunities trying to just get them a bit cheaper, which never comes.

"The Intelligent Investor" is a fantastic book for learning about Investor & Market psychology.

Great compilation of quotes from the book. h/t @KenFaulkenberry

cc: @dmuthuk @Gautam__Baid @saxena_puru

Use this great book for those timeless principles, not for the hard & fast rules and quantitative stuff that used to work 70 yrs ago.

My fav quotes in the thread below, categorized into few sections.👇👇

✔️Discipline

Investing isn’t about beating others at their game. It’s about controlling yourself at your own game.

The sillier the market’s behavior, the greater the opportunity for the business like investor.

By developing your discipline and courage, you can refuse to let other people’s mood swings govern your financial destiny. In the end, how your investments behave is much less important than how you behave.

The investor’s chief problem – and even his worst enemy – is likely to be himself.

Even the intelligent investor is likely to need considerable will power to keep from following the crowd.

Phenomenal article/compilation on "The Biggest Mistakes Investors Make". h/t @manualofideas @JMihaljevic 👏

cc: @dmuthuk @Gautam__Baid @saxena_puru

My fav pts in the thread below

Lot of great points on the importance of having a strategy, process, discipline, patience, self-reliance, awareness of risk, biases/emotions, learning from mistakes & more.

More ⬇️

Some more ⬇️

The last year has delivered great results to many Portfolios but Market conditions are always changing and it's important to ensure the Process and Portfolio are built to withstand whatever the Market throws at it in the short-term and sustain & succeed for the long-term.

Some pretty good Book summaries in here. h/t @mtmdev_ 👏

My fav ones from the list
✔️Poor Charlie's Almanack
✔️Zero to One
✔️The Millionaire Next Door
✔️Surely You're Joking, Mr.

1⃣ Poor Charlie's Almanack (on Charlie Munger).

Having the actual book and referencing it often is the best option, but checking out these tidbits doesn't

2⃣ Zero to One by Peter Thiel.

Great review of an excellent book that's very useful for anyone interested in

3⃣ The Millionaire Next Door by Thomas J. Stanley and William D. Danko.

This is one of the best personal finance books for a good

4⃣ Surely You're Joking, Mr. Feynman! by Richard

Some Excellent articles on Financial Ratios and Analysis.
h/t @discover_ci 👏

1⃣ Profitability

2⃣Liquidity

3⃣Leverage

4⃣Asset Management

5⃣Financial Analysis: What It Is and Tips for Getting it Right.

✔️Determining a Company’s Key Performance Indicators
✔️Collecting Company Financial Statements & Calculating Financial Ratios
✔️Analyzing Operating Results & Financial

Excellent 3 part series on the lessons complied from many Value Investing Books.👏

Part 1⃣: The Mindset
✔️Think like an owner
✔️Patience is the greatest virtue
✔️Mr. Market – your friend, others’ enemy
✔️Use your Rationality, not your

Part 2⃣:The Methodology
✔️Margin of safety and the quest for bargains
✔️A risk-averse philosophy and strategy
✔️Uncertainty is not risk
✔️The Dhandho Way: Heads, I win; tails, I don’t lose

Part 3⃣: The Hunt
✔️The perfect business is not necessarily a sound investment
✔️The quantitative & qualitative assessment
✔️The quest for gold (good prices for good Businesses)
✔️Fish where the fish are
✔️Be conservative & know your circle of

Value Investing is too often portrayed as just a hunt for statistical bargains. It encompasses a lot more that long-term investors can learn too - quest for quality, using the appropriate Valuation methods, patience, contrarianism, risk awareness, Volatility...

Ten quick reasons why I❤️$TWLO & plan to hold for a long time to come.

1⃣ Primary service (CPaaS) is a critical & growing component of Digital Transformation. Being able to effectively reach Customers in whatever channel they prefer is a must.

2⃣ Highest mindshare and best in class for CPaaS.

3⃣ Plenty of organic growth left.

4⃣ Usage based Revenue model in exploding use-cases is great.

5⃣ ~140 DBNE, one of the best in SaaS

6⃣ Great top line growth for few more years, and margins trending in the right direction.

7⃣ Huge base of Customer count, with no concentration risk.

8⃣ Smart acquisitions, not empire building. SendGrid and Segment are all great additions.

9⃣ Evolving into an overall Customer Engagement Platform with more touch points, opportunities of engagement and optionality.

🔟 Oh yeah most importantly, Jeff Lawson and Mgmt Team are awesome at vision and execution. 🔭✅

I always remind myself of this old illustration of mine about the Mobile/Web/API economy.

Stocks will go thru phases of under/over valuation. When the best Co's in the biggest trends are executing well, I prefer to keep thesis simple (but updated).

(Not a rec, do your own DD).

"An Introduction to Valuation" by Aswath Damodaran is an excellent doc for learning more about Valuation, differences between Intrinsic Value (DCF) and Relative Valuations (their basics, Pros/Cons, when they work better...).

cc: @dmuthuk

Some of my fav slides from the presentation.

✔️Misconceptions about and approaches to Valuation.

Now might be a good time to read Robert Shiller's "Irrational Exuberance".🧐

cc: @Gautam__Baid @saxena_puru @dmuthuk

✔️Natural Ponzi processes
✔️This time is different
✔️Compounding biases
✔️Herds and epidemics
✔️Rationalizing Irrational

My fav parts.

1⃣

2⃣

3⃣

4⃣