BC ECONOMY
Saved by @Jacobtldr

Interpretation of Financial Statements - preliminary filters.

1. Looking for sustainable competitive advantage:

When looking for sustainable moat, you wanna see consistency - in earnings, in having low debt, in having growing earnings, low spending in capital expenditures, etc.

 The longer the company has existed, and if it sells you the same product for years (like Coca Cola), it reduces production costs and other costs (R&D, Training, marketing) slowly as the company ages.

When costs are reduced, margins and profits increase.
2. What to look for in an income statement:

Let's take a look at Apple:

i) You want to see earnings grow at a steady pace. Take a look at the net income below.
ii) Another thing that's important is a consistent and high gross margin.

As a thumb rule, Warren Buffett wants to see a gross margin of around 40% or above.

Although not quite 40%, it's around that range with respect to Apple.
Compare this to Apple's competitors.

Samsung's gross margins are around similar range, highest being 45.7% in 2018, and Huawei had a gross margin of 38.6%.
Having a high gross margin indicates the scalability of the business. The more the company sells, the greater the profitability becomes. Such a trait is what you want to see in a business you want to own.
iii) You also want to note the net margin.

Gross margin = (revenue - cost of goods sold) / revenue

Net margin = net income / revenue.

You want to see the company having higher net margin compared to their competitors.
Apple's net margin is around 22%. Samsung's net margin is around 18% and Huawei's net margin is around 8.5%.

Typically, net margin above 20% is a very strong one, indicating that we are dealing with a smoothly run business.
3) In the balance sheet:

Look at the figure - "Retained Earnings".

Using retained earnings, you can find out if a company is reinvesting its income or not. A steady growth in this number means the business is profitable, and that it's identifying good investing opportunities.
Apple doesn't fulfill the criteria regarding retained earnings. But that's because in 2013, Apple started a rigorous dividends and share repurchase program.

To measure how efficiently a company is using these retained earnings, Return on Equity (ROE) is used.
To calculate ROE, compare Net income to the Total Equity of the company.

Apple looks quite strong in this aspect. It's partly an effect of distributing a lot of their earnings to shareholders. It also signifies the sustainable competitive moat.
Compare this with Samsung (ROE:18.3%) and Huawei (ROE:25.3%), Apple shows significant strength.

4) Exceptional businesses seldom require a lot of debt to expand (except maybe banks/NBFCs). Instead, they can just use the strong cashflow from the business.
So, look for businesses with little to no long term debt. If a company can pay off with all its long term debt with less than 4 years of earnings, it signifies a good position for the company. Apple fulfills this criterion. Samsung and Huawei do too.
5) In a cashflow statement:

This is where you see the actual in's and out's of money.

Look at "Capital Expenditures" on the cashflow statement.

This is the money being spent on properties, plant, and equipment.
Look at what percentage of net income the capital expenditures are. You want it to be as low as possible, lower than 25% over a period of time is considered very good. Less than 50% is okay-ish.

Exceptions: One time payment to grow the business in some capex activity.
Look at Apple's CAPEX spendings. Compare that with their net income, and you can see that their average capex spending is less than 25% of their net income. Samsung (around 65%) and Huawei (around 45%) aren't even close.
Also, in Apple's cash flow statement, we can see the reasons why the retained earnings from the balance sheet haven't been growing from 2012. Apple has been distributing a lot of cash to its shareholders.
Apple's Augmented Payout Ratio (includes share buybacks and dividends) has been higher than 100% in some years. This basically means Apple's distributing more money than it earns.
5) When to sell?

3 instances when you could consider selling the stock.

i) You need money for a better investments. This is more so applicable in a bear market, for you to switch from something great to something exceptional.
ii) When a company loses its competitive advantage. Times change, and once monopolistic companies are constantly being disrupted. If your investment faces such a risk, cut it loose.
iii) During crazy raging bull market. Even if a company runs a fantastic business, it could be a bad investment if you have to pay insane price. At such times, at such price, you could selling a fantastic business if you already have held onto it for a long time.
At a PE of 40 or higher, you should start considering selling your stocks, even if you believe in the underlying economics of the company.

This may not always apply to all markets, all stocks. But with anything above 40PE, tread carefully and cautiously.
So, key takeaways:

- Competitive advantage and scale
- Consistently high net income, return on equity
- Requires very little debt
- Retained earnings has steady growth
- Capital expenditures should be < 25%
- Sell a company if prices are crazy, or a better opportunity comes up.
The Swedish Investor YT channel has some interesting playlists on financial statements. Check it out. These insights I gathered are from one of his videos.

https://t.co/nbKA5Bzpi6
For learning Valuation, nothing better than Aswath Damodaran's course. Find his courses here:

https://t.co/MbmUKsE968

More from Shravan Venkataraman 🎡

Shravan Venkataraman \U0001f525\U0001f680\U0001f4b0
Shravan Venkataraman 🔥...
@theBuoyantMan
** MEGA THREAD ON Cryptocurrencies/Blockchain**

I wanted to know the best resources to learn about cryptocurrencies and blockchain for someone with zero knowledge. I asked Twitter, and Twitter answered.

This thread is a compilation of the best resources I was recommended. 👇👇

Let's start with ** BOOKS **

The first thing you should do before you pick up any book:

Learn about Bitcoin & Ethereum by reading the respective whitepapers.

- [Bitcoin white paper](https://t.co/cErOaFn6QL) by Satoshi Nakamoto

- [Ethereum White paper] (https://t.co/0g5kYCGJGq) by Vitalik Buterin

Even if you are not tech savvy, you can get a good grasp about how blockchain functions from these papers.

1) *The Basics of Bitcoins and Blockchains: An Introduction to Cryptocurrencies and the Technology that Powers Them* by Antony Lewis

This book covers topics such as the history of Bitcoin, the Bitcoin blockchain, and Bitcoin buying, selling, and mining.

It also answers how payments are made and how transactions are kept secure.

Other cryptocurrencies and cryptocurrency pricing are examined, answering how one puts a value on cryptocurrencies and digital tokens.
FINANCE
Shravan Venkataraman \U0001f525\U0001f680\U0001f4b0
Shravan Venkataraman 🔥...
@theBuoyantMan
In today's round up, I have some amazing threads, resources, and plenty of solid advice for business, finance, career from twitter.

Here's the roundup of 17 of the best and the most useful threads, tweets, and resources I found last week. 🧵

1/ How to find spreadsheets on any topic in the


2/ A thread by @wes_kao on making your customers hungry and excited to buy from


3/ Life brings you a lot of afflictions. But if you look around, there's a lot of beauty around you. Most often, drowning in the afflictions, we can't recognise or appreciate the beauty.

@wdmorrisjr wrote a damn good thread on finding beauty around us.


4/ This one is for all the job goers and job seekers.

@SahilBloom who recently hit 500k followers and has several accomplishments to his belt (career wise) wrote this thread on standing out in a hiring
MISCELLANEOUS
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Shravan Venkataraman \U0001f525\U0001f680\U0001f4b0
Shravan Venkataraman 🔥...
@theBuoyantMan
Working on some execution optimisation related backtesting. I have so far been executing with market orders only. Going towards higher lot sizes, I'd like to optimise for minimal slippage.

First off, on NSE, if you place a market order, you get filled at the best bid/ask right?

If we want to optimise this, the first non-creative idea one can think of is, slicing the order into different lot sizes, and placing a limit order for each slice at the mid point of current best bid & ask.

But this requires your latency to be the least.

Why would latency affect it?

I looked at tick historical data, and there are more than 18-20 ticks in a second (auction and quote combined).

Even if you keep 10 ticks per second, your best bid/ask can shift from the time you place to the time exchange receives the order.

So, the next best thing that people can do is place tranches of orders every 1s, 3s, 5s, 10s, 15s - in their preferred time range, and get filled at the midpoint or best-bid+1/2/3/4/5 in the depth.

What you need is liquidity.

But if you're trading breakouts, then it's highly likely that your limit orders may not get filled if the action is too fast.

So, a retry mechanism is required in such cases.

If nothing works, you convert your orders to marketable and get filled at worse slippage.
TRADING
Shravan Venkataraman \U0001f525\U0001f680\U0001f4b0
Shravan Venkataraman 🔥...
@theBuoyantMan
**Time for a thread**

Through the last three years of experience in the entrepreneurship space, I understood why phenomenons like

- black money
- hawala
- money laundering
- tax fraud
- overclaiming of tax returns
- not reporting income

and other such scenarios exist.

1/ Running a business, especially with all the licenses and the jazz is like standing in a traffic signal.

The signal may still be red. But if vehicles have started moving, they will keep honking and hurling abuses at you for not moving and breaking the rules along with you.

2/ The corrupt system begets corruption.

The government employees seek bribe for every single thing that they are being paid to do as work.

If you don't pay them, your business will not get set up.

If you don't pay what they ask for, they will point out hundred issues.

3/ So, the base for corruption gets set up when you start your business.

You unwittingly become an accomplice to the systemic corruption.

If you don't bribe, your business won't get off the ground and you can't make money.

So, you are cornered to have to pay a bribe.

4/ Now, your business gets off the ground. But you have to get loan to set it up.

You go to MSME. They get you the loan. They also provide subsidy relief.

The catch: The officer asks you to pay 10-15% of subsidy as "formality" to ministers and the chain of command.
BLACK MONEY
Shravan Venkataraman \U0001f525\U0001f680\U0001f4b0
Shravan Venkataraman 🔥...
@theBuoyantMan
You see so many people on Twitter saying

"Infosys ADR is up 5% today."

"ICICI Bank and HDFC Bank ADR ended highly positive today. Good move coming up for Banknifty."

Have you ever wondered what is ADR? You're not alone.

Time for a thread. 👇👇👇


1/ Back in the early 1900s, people were buying shares in foreign countries in the respective country's exchanges (many still do).

There are few issues with that:

- Complexity of the purchase
- Currency conversion issues
- Difficulty in transactions

and so on.

2/ JP Morgan saw this, and thought

"what if people could trade foreign companies

- in our country
- in our currency
- but without the companies having to list themselves here?"

ADR was born.

3/ ADR stands for American Depository Receipts.

It's like a share certificate, issued by a U.S depository bank (like CDSL here), but on a foreign company.

Usually one ADR unit represents one share of the foreign company.

4/ Here's how it works.

The depository bank buys the foreign company shares in the foreign exchange.

This depository bank holds the purchased shares as inventory.

It issues respective ADR for domestic trading.

The ADR is issued & traded in US Dollars.
FINANCE

More from Economy

Peter Foster
Peter Foster
@pmdfoster
🚨🇬🇧🇪🇺💄👠👗💅🏻🕺💃🇪🇺🇬🇧🚨
UK’s £35bn fashion industry warns of “decimation” from #brexit - big names sign open letter to @BorisJohnson urging action. Many of 50,000 SMEs on the rack due to VAT, customs and work permit issues. Stay with me/1


You can read the full text of the letter here, co-ordinated by Fashion Round Table @FashionRoundTab, but tl;dr it says that #Brexit has left a "gaping hole" in an industry that relies of free movement of professionals. It's a familiar cry /2



@FashionRoundTab The industry, already whacked by #COVID19, is now discovering that cross-border sales are a horror (VAT, Customs, long delays) and models, stylists, photographers that used to blat around Europe can't any more. They need permits, for themselves, for their gear /3

It is on one level amazing that this is only just fully dawning - as the musician industry found out recently - but fashion is not just big names and big companies. It's actually a mountain of small companies and sole traders often that feed into a huge (£35bn) industry /4

I've written about fashion models issue before (they need tier-5 sponsorship visas) and how that will erode London's status as a hub, but this goes so much wider than this - hence the #dontmakefashionhistory campaign - and comes down the lack of a mobility chapter in the deal /5
ECONOMY
Rachel "The Doc" Bitecofer \U0001f4c8\U0001f52d\U0001f34c
Rachel "The Doc" Bitec...
@RachelBitecofer
1. Been excited about @JoeNBC's sustained convo today about @KBAndersen's new book Evil Geniuses: The Unmaking of America which explains how the Republican Party radicalized OVER ECONOMICS over the past 30 years. It was launched w the radical tax cuts in Reagan's presidency, but

2. as the GOP evolved through the 90s & 2000s they became dogmatic about their economic philosophy- until it became a radical litmus test/position the party followed even when conditions screamed for different policy. It was a MIRACLE the party acted to stabilize the economy at

3. at the end of 2008 when it was crashing down around us (though they just barely did & some didn't and that's bc it was before the Great Purges of 2010,2012, & 2014). America doesn't know the hit job the GOP did on the American economy as they dogmatically pursued tax cuts to

4. the exclusion of everything else while denying any policy that could grow wages or improve the economic lives of the bottom 80% aside from the 2 or 3 times Ds managed to squeeze through policy while in charge (minimum wage increase in 2007-which was the 1st time in a decade

5. and now, of course, its been another decade. It's actually a miracle wages (all wages bc when the min wage is artificially low it affects all the wages above it, that's how you end up w $10 per hr EMTs & teachers) aren't even more out of wack w inflation. As @JoeNBC points out
ECONOMY
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XVIII Airborne Corps
XVIII Airborne Corps
@18airbornecorps
Yesterday we announced the launch of The Doomsday Clock, an original 18th Airborne Corps podcast series telling the incredible story of the Corps' Cold War history.

Today we're going to tell you more about some of the guests who will appear on the program.

[1 of 10]


[2 of 10]

Of course, we'll have John Lewis Gaddis, the dean of Cold War historians about the start and end of American confrontation with the Soviets (Episode 16: April 27).


[3 of 10]

We'll also have the great H.W. Brands to talk about the Korean War and the stare down between Truman and MacArthur (Episode 7: February 23).


[4 of 10]

Podcast king Dan Carlin joins us for a deep, dark journey into the philosophy of the Soviet Union (Episode 9: March 9).


[5 of 10]

You know Sir Max Hastings as the great historian, but long before that he was a war reporter. That's him on the right in Vietnam in 1968.

He joins us to talk about American escalation in the Vietnam War (Episode 10: March 16).
ECONOMY
LearnLifeWealthTravel | Dream Big, Think Growth !!
LearnLifeWealthTravel ...
@AnyBodyCanFly
Thread - How to spot a potential multibagger

Multiple fundamental parameters however we cannot be rigid on any of these parameters.

Be flexible to interpret things from bigger picture point of view.

Input 1 ~ No doubt on business survival

Come whatever event (health crisis, economic bubbles, economic recessions, political events, etc.), there should not be any doubt on business survival.

Earlier it used to be only food companies into this category, but now there are many.

Input 2 ~ Visible & sustainable growth potential

At any point of time, we can think with a certain common sense approach that if management wants, there can be a sustainable growth at any point of time.

Obviously this growth may come thru innovation, optimization, etc.

Input 3 ~ Management has vision towards growth

Management should be forward looking, should be able to read into future to build right growth avenues, should be considerate towards every stakeholder.

In addition management should be ethical & should have good social image too.

Input 4 ~ Promoter stake

There should be a reasonable skin in the game from promoter.

If in case there is a low promoter stake, then promoter should increase stake at every possible opportunity.

Also pledging should either be zero or minimal.
ECONOMY
Ndegwa Power
Ndegwa Power
@ndegwapower
Thread: Why Kenya and other countries are introducing Digital Taxes? Why now?

Now,the current tax laws & international tax framework (which dates back to the 1920s) was designed at a time when businesses were largely brick-and-mortar (physical stores).Then, it was unimagineable for a biz to operate in another country without some form of physical presence

Thus, in most countries, for a business to be pay corporate tax it has to have some form of nexus there (e.g. Kenya). Either it's registered here, or it's managed from here or it has what we call a permanent establishment (also implies some form of physical presence)

Fast forward to today, there are numerous companies that are able to operate in multiple countries without having any physical presence in those countries. Consider social media platforms or streaming services, with a device, connection & subscription you can access their service

...and they don't have to have any physical office or employees etc in Kenya for them to deliver the service to you. I mentioned above that to be subject to corporate tax here, a company would have to have some form of nexus here in Kenya, these companies, don't.
ECONOMY

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Here is my Thread on 'Ketu (South Node) Through Nakshatras' The 27 Constellations 🙏❣.

Do check your “Past life Mastery” which KETU Represents🤞🏻.


1. Ketu in Ashwini Nakshatra:

Here native is Great at Financial Planning, Face reading, understanding other’s mind and intention, Driving Fast they don’t like but they are wayyy smooth over driving Fast. This is also great position which can make native Great Surgeon,

Neurologist, Psychologist.
These natives are Selfless and Sacrifice self for others. They gets Fame and Success but they just don’t care.

2. Ketu in Bharani Nakshatra:

They are good at Flirting, Attracting opposite sex, studing ancient subjects. They are also Great at Creativity and Artistic activities. The are lazy but they are really open minded who handles situations really well.

In Past life they have handles many things which is now helping them to make things easier in this life. They are great Leaders too.

They are really good at Hard work and Smart work both. And yes just as Ashwini they don’t much care about Fame and Success!
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1

From today, we will memorize the names of 27 Nakshatras in Vedic Jyotish to never forget in life.

I will write 4 names. Repeat them in SAME sequence twice in morning, noon, evening. Each day, revise new names + recall all previously learnt names.

Pls RT if you are in.

2

Today's Nakshatras are:-

1. Ashwini - अश्विनी

2. Bharani - भरणी

3. Krittika - कृत्तिका

4. Rohini - रोहिणी

Ashwini - अश्विनी is the FIRST Nakshatra.

Repeat these names TWICE now, tomorrow morning, noon and evening. Like this tweet if you have revised 8 times as told.

3

Today's Nakshatras are:-

5. Mrigashira - मृगशिरा

6. Ardra - आर्द्रा

7. Punarvasu - पुनर्वसु

8. Pushya - पुष्य

First recall previously learnt Nakshatras twice. Then recite these TWICE now, tomorrow morning, noon & evening in SAME order. Like this tweet only after doing so.

4

Today's Nakshatras are:-

9. Ashlesha - अश्लेषा

10. Magha - मघा

11. Purvaphalguni - पूर्वाफाल्गुनी

12. Uttaraphalguni - उत्तराफाल्गुनी

Purva means that comes before (P se Purva, P se pehele), and Uttara comes later.

Read next tweet too.

5

Purva, Uttara prefixes come in other Nakshatras too. Purva= pehele wala. Remember.

First recall previously learnt 8 Nakshatras twice. Then recite those in Tweet #4 TWICE now, tomorrow morning, noon & evening in SAME order. Like this tweet if you have read Tweets #4 & 5, both.
VEDICNAKSHATRA
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Maurice Casey
Maurice Casey
@MauriceJCasey
I am reading through reams of late-1920s communist poetry and easily my favourite title so far is: "To a Lady who Rejected a Poem about Spring as a Petit-Bourgeois Deviation"

The last lines:
"So here's my hat into the air,
Three cheers for your amazing hair,
For coal mines, and for turbines, too,
For steel, the Comintern and you!"

A not exactly graceful (though possibly satirical) title: "Lines Disassociating Myself from Yessenin and Supporting the Otherwise Unfounded Legend that I am a Foremost Proletarian Writer"

An excerpt:
"Goodbye verses of Yessenin
Goodbye literary slop-
You are not the line of Lenin
You are not the line of WAPP

Never shall I moan a
simple lyric from the heart
I'll devote my new corona
to the proletarian art"

The poet was Joseph Freeman, who published much of his revolutionary verse in the New Masses, a stylish journal of the interwar American literary Left.
CULTURE
\uff2c\uff41\uff44\uff59 \uff22\uff4c\uff41\uff5a\uff45\uff53
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@Lady_Blazes
Oh my Goodness!!!

I might have a panic attack due to excitement!!

Read this thread to the end...I just had an epiphany and my mind is blown. Actually, more than blown. More like OBLITERATED! This is the thing! This is the thing that will blow the entire thing out of the water!


Has this man been concealing his true identity?

Is this man a supposed 'dead' Seal Team Six soldier?

Witness protection to be kept safe until the right moment when all will be revealed?!

Who ELSE is alive that may have faked their death/gone into witness protection?


Were "golden tickets" inside the envelopes??


Are these "golden tickets" going to lead to their ultimate undoing?

Review crumbs on the board re: 'gold'.


#SEALTeam6 Trump re-tweeted this.
GOVERNMENT
foone
foone
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I got a Toshiba T1200, which has a bad screen, and a dead CMOS battery, and I thought the hard drive was broken too...


but I rebooted it and heard a KTHUNK and a really loud spin-up noise and holy shit, the hard drive works!


and it still has files on it. the newest date is January 1994.


It's a 21mb hard drive, with ~37k of bad sectors.

This fucker is never going to spin up again, so I better go find some serial cables and copy shit off now.


The backlight is fucked so I'm shining a flashlight on it.
without it, it looks like this.
TECH