With an insider's view of the mind of the master, Mary Buffett and David Clark have written a simple guide for reading financial statements from Buffett's successful perspective.

10 Key Takeaways from the book: The Emotionally Intelligent Investor

1. Investing success does NOT come from ignoring or suppressing emotion. Assuming that you have relevant expertise, disregarding intuition and empathetic feelings because they cannot be explained, is a mistake!

2. Self-awareness is the first and most important step in improving as an investor. An investment approach needs to fit with your unique set of motivations, personality traits, weaknesses, and strengths. Don’t try to be exactly like Warren Buffett if you are not like him!

3. Humans have certain common investing vulnerabilities, but everybody is unique in their susceptibility to them. Consider your weaknesses to be the investing biases and traps to which you are most prone.

4. Because we are constantly changing, introspection should be incorporated into the daily and weekly routines of any investor. Try writing in a trading/Investing journal.

@contrarianEPS I don't know about crypto but I invested because it's was rising

- Retail Investor

As part of our Knowledge sharing initiative by @FinnacleAcademy and @Investmentbook1, here we are on our post 2 with some of the most important key takeaways of the book “Masterclass with super investors” by @vishalmittal22 & @basrars

Here we go! (1/n)

Masterclass with super investors is one of the best books covering the investment strategies & journey of renowned domestic investors. Our summary has been segregated in 2 parts, A) Common traits in investment ideologies of these stalwarts B) Investor specific key takeaways (2/n)

A)Let's look at a few common points in these Stalwarts' investment ideologies 1)Invest (higher % of portfolio) when you have conviction backed by sound logic 2)You need to be bullish on India to make investments in Indian cos. bcoz majority of Indian cos. are domestically focused

3. New Bull markets have new leaders when a bull markets ends the stocks which have gained the most falls the most 4. The entry price that you pay for a company should be very cheap so that even if your assumptions go wrong in future you don't end up losing money (4/n)

5. We get attached to stocks which have given us a lot of returns in past even though in current & future expected scenarios they seem overvalued 6. Focus on art of disciplined selling-it's imp. to have a sound selling mechanism just buying at right price wont create wealth.(5/n)

One of the best debates I have seen in recent history between @SunilBSinghania and Saurabh Mukherjea.

TOPIC: Has P/E lost its relevance?

I resonate more with Sunil’s side. Here’s a thread 🧵 on the main points made by him:

@varinder_bansal @safiranand @myvaluepicks

1/ Importance of PE

PE is not the only factor but an important factor.

Ultimately the growth has to justify how much PE are you paying for the company.

There cannot be an unlimited PE multiple based on some xyz parameters.

2/ Hindsight Bias:

In hindsight we can say that from 2001 to 2021, a company grew at 25 % and we should have given a very high PE to it.

But on the day when you buy, you don’t know that the company is going to grow at 25% for the next 20 years.

3/ Millennial preference:

Things have become more competitive.

New generation don’t really care much about legacy.

Convenience and affordability matters more.

The longevity and sustainability of growth has changed dramatically.

4/ Company that require a big investment - There is opportunity to invest big.

Company 1: Mkt Cap of 50 cr
Company 2: Mkt cap of 1 lakh cr

50c r company can become 3x, 1 lakh cr company cannot become 2x.

On absolute basis you end up making 5 cr vs 5k cr in 1lakh cr company.

@10kdiver Ah thank you. Yeah so strange! Maybe Twitter just hates me.

Net Profit vs Cash Flow from operations (CFO) - What is more important?

A short thread with examples

Like & Retweet for better reach !

1. Net income is the profit a company has earned for a period, while cash flow from operations measures the cash going in and out during a company's day-to-day operations i.e., the cash which is generated through its core business.

2. Net income is calculated by subtracting the cost of goods sold, operating expenses, depreciation & amortization, interest expense and taxes from total revenue.

3. Cash flow from operations is calculated by adding the non-cash expenses such as depreciation and amortization to the net profit and then subtracting the changes in working capital.

Now lets understand few differences between Net Profit and Cash Flow from operations (CFO)

1. Net profit is recorded on an accrual basis whereas CFO deals with only cash items. Income earned is recorded in the net profit even if cash is not received

@vinaytalwar It’s ratio of

Market Cap/10 Year Free Cash Flow

For example

Hikal

Hikal = MCap / FCF~10Y = 5618 / 748 ~= 7.5