10Y Profit from Operations for #IEX

D: Invested

Cash Flow From Operations for the same 10Y Period (rising non linearly)

It's the weekend!

Grab a cup of coffee, in this thread I will explain

1. What a cash flow statement is?
2. What does it tell you about a business?
3. How to analyze one?

Examples included various Indian companies.

Let's dive right in.

Cash flow statement is a financial statement published by a company every quarter and annually.

It comprises of all transactions that a company does in cash or cash equivalents.

*Cash equivalents are other liquid assets that can easily be sold for immediate cash.

This is what a typical cash flow statement looks like

Cash flow statement is important as it gives you transparency into how the company utilizes its cold hard cash generated by the business.

Because we are following actual cash, there are very few accounting tricks that can be employed in this section.

A cash flow statement has three main parts:

1. Cash Flow from Operations (CFO)
2. Cash Flow from Investing (CFI)
2. Cash Flow from Financing (CFF)

Let's dive into CFO in detail.

*CFI and CFF will be covered in a separate thread

It's the weekend!

Grab a cup of coffee, in this thread I will explain

1. How to do Industry Research?
2. How to research a Company from scratch?
3. How to determine Margin of Safety and build an Investment Case?

Lets dive right in.

The most frequent question I get asked is - How should I research an industry or a trend?

A good question indeed and my answer to this is simple.

Read, Read and then Read some more.

The more knowledge you consume, the better you will be able to identify and link trends across industries.

But reading doesn't mean you need to pick a newspaper or start reading random articles over the internet.

Your reading and research needs to be structured.

This is where technology comes in to help and make our lives easier.

Today, algorithms run our world and decide what data you consume.

Be it Instagram posts, TikTok reels or YouTube videos.

So learn to trick these algorithms and use them to your advantage.

It's the weekend!

Grab a cup of coffee, in this thread I will explain

1. Peter Lynch's Six Categories of Stocks
2. How to identify the type of stock you own?
3. How to think and decide about the runway for growth of a company?

Lets dive right in.

For those who do not know (I doubt there will be many), Peter Lynch is one of the most successful fund managers of all time.

He managed a fund called Magellan at US Investment Giant Fidelity Investments and during his 13 yr tenure, he delivered an average CAGR of 29.2%.

Sadly the fund couldn't keep up post Lynch's retirement and his successors weren't able to keep up with his returns.

That's how good Lynch was!

In 1989, a year before retirement, Lynch wrote and published a book called 'One Up on Wall Street'.

Almost 32 years later, the teachings of the book remain relevant.

(Highly recommended read)

Chapter 7 of the Book Titled
"I've Got It, I've Got It - What is It?"

talks about the need to classify stocks.

Peter's argument is that you need to know what kind of stock you hold in your portfolio.

Not all stocks are the same - and he is right!

Promised to share my portfolio, so here it is.

None of this is investment advice, please do your own research. I may choose to exit, reduce or add anytime to these.

It's the weekend!

Grab a cup of coffee, in this thread I will explain

1. What are Valuation Ratios?
2. What ratio should be used when?
3. Why one standard ratio like a PE doesn't work all the time?

Lets dive right in.

Valuation Ratios are a subset of ratios within the broader family of Ratio Analysis.

It is in this segment of Ratio Analysis, that you will find ratios like Price to Earnings, Price to Book, Price to Cash Flow, Price to Sales and many more.

Together these ratios help an investor understand if a company is valued cheap or expensive.

A novice investor tends to use Price to Earnings (PE) for everything - yet it is only one of the many ratios that should be used to judge the current valuation of a company.

Read all these books in the first half of 2021 📖📚

Recommending all of them 👇🏼

Billion Dollar Whale is a fascinating story about how one mastermind was able to rob billions of dollars from Malaysian Sovereign Fund and use that money to finance everything from parties with Paris Hilton to the movie Wolf of Wall Street.

Thrilling and Insightful 💰

Joys of Compounding by @Gautam__Baid teaches you various aspects of the magic that is compounding.

From finance to more importantly how compounding lessons in life play an important role.

This one has both lessons in life and investing packed into one.

Highly recommended 🌱

In The Plex give you an inside view on how one of the greatest companies in the world - Google, works.

Steven Levy is one of my favourite authors 🔍

If you're a fan of history and geopolitics then this one is for you.

The Rise and Fall of Nations by Ruchir Sharma has to be one of the best books written on global political landscape and the rules that govern them today. 🌇

#IEX

At 32% CAGR, Revenue doubles every 2.25 years.
All this while margins keep increasing.

"IEX is just an exchange and will lose its share once happens. It is not a technology company"

Meanwhile 👇🏼

Axis Capital on #BorosilRenewables

#LearnWithTar

Issue No. 2
What are Bio Reactors?

https://t.co/f8AE9aYqGF

#Syngene #LaurusBio #Stelis #Wuxi #ThermoFisher

Saw a few posts where #LaurusLabs is being floated as 100x candidate from here.

That would mean it would need a market cap of 35 lakh crore+ ($466 Billion) to achieve that goal.

Not going to happen.

Most optimistic goal is a 3 lakh cr market cap ($40 Billion) in next 10 yrs.

Don't fall for accounts selling you false hope
Apply some common sense

Folks who bought Laurus at its lowest of Rs 52 per share may (Big May) see a 100 bagger, entering now will not

Laurus is my largest position, so this is not a criticism, just setting realistic expectations

Phillip Capital note on #Prajindustries

Fun Insights from my Portfolio

Deepak Nitrite generates more Cash from Operations than Laurus Labs.

Deepak Nitrite: 999cr
Laurus Labs: 733cr

Deepak grew its CFO by ~30% YoY while Laurus grew its CFO by more than~100% YoY

Long Duration Contracts and Electricity Derivatives to be launched on IEX soon

Aims to increase Electricity Traded on Exchange to 25% by 2025 from current 5.5%

#IEX

https://t.co/mDJHAfvv0K

Niti Ayog is one of the best places to look at, if you want to learn more about the upcoming reforms, outlook on India for next decade and some of the most pressing economical issues of our generation.

Here is a recent one on EV charging infra.

https://t.co/BGoCTVnlRS