BC FINANCE
Saved by @vasantsri_

My investing style: Buy and hold high-quality businesses

Here are 15 traits that tell me I've found a great business ⬇️

 1/ Recurring Revenue

Types:

Business Services $MCO
Contracts $AMT
Consumables $MNST
Exchange $MKTX
Franchise $WINA
Membership $TDOC
Platform $ETSY
Razor/blade $DXCM
Real Estate $STOR
SaaS, PaaS, IaaS $TWLO, $NOW, $FSLY
Subscription $NFLX
Tollbooth $BIP
2/ Recession-Proof Demand

Great companies sell products/services that are in-demand in good times and bad

That allows them to grow regardless of what is happening in the broader economy
3/ Organic Growth

"Organic" growth: Growing by increasing sales of internally developed products/services

"Inorganic" growth: Growing from mergers & acquisitions

Organic Growth > Inorganic Growth
4/ High & Expanding Gross Margin

Indicates that the company’s products/services create a huge amount of value for the customer

Rising gross margin also indicates pricing power
5/ Widening moat

Capitalism is brutal

A widening moat will protect a company's profits from competition

Sources:

Network effects: $FB
Switching costs: $ADBE
Durable Cost Advantage: $WMT
Premium Brand: $PTON
Patents: $OLED
Counter-Positioning: $TSLA
6/ Operating Leverage

If a company can grow its costs at a slower rate than revenue then its profits will grow at a FASTER than revenue

This concept was visualized beautifully by @10kdiver

https://t.co/2RhrI7IzFy
7/ Low-cost customer acquisition

The best marketing is no marketing

Great companies create demand through word of mouth and spend little on sales & marketing
8/ Diversified Revenue

Companies that depend on a few customers for most of their revenue are fragile

One customer leaving can ruin the investing thesis

Great businesses serve thousands of customers, not just a few big ones
9/ Great Management

Management matters

Here is a thread I wrote in what I look for in a great CEO

https://t.co/PuM6EXCxYH
10/ Reinvestment Opportunities

Great businesses can reinvest profits back into themselves at high rates of return for long periods of time

This continuously grows the profit stream, which will eventually lead to share price appreciation
11/ Profits

Companies that produce profits have far more control over their destiny than companies that don’t

I want to see that both net income & free cash flow are positive & growing
12/ Optionality

Great companies create new revenue opportunities for themselves by launching new products/services that open up new markets

Ex:
$AMZN -> AWS
$MELI -> Payments
$TSLA -> Energy Storage
13/ Huge Total Addressable Market (TAM)

I want to own companies that have only captured a small fraction of their opportunity

That creates a long runway for continued growth
14/ Price Maker

Companies that sell commodities have no control over the price of their product

I want to own price makers, not price takers
15/ Anti-Fragile Balance Sheet

Cash-rich companies get stronger in downturns

Debt-laden companies get weaker in downturns
Enjoy these financial graphics?

I email them daily for free

https://t.co/GKYc6e2v3b
Enjoy this thread?

I regularly tweet about money, investing, and self-improvement

If those topics interest you, follow me
@BrianFeroldi
Want to see me & @tmfstoffel show you how we research a business in real-time?

We do so weekly on my YouTube channel

https://t.co/2YidjLLghL
To summarize, I want:

✔️Recurring Revenue
✔️Recession-Proof
✔️Organic Growth
✔️High GM
✔️Widening moat
✔️Operating Leverage
✔️Low-cost Marketing
✔️Diversified Customers
✔️Great Management
✔️Reinvestment
✔️Profits
✔️Optionality
✔️Huge TAM
✔️Price Maker
✔️Strong Balance Sheet

More from Brian Feroldi

Brian Feroldi
Brian Feroldi
@BrianFeroldi
1/ The Queen's Gambit is apparently causing demand for chess to surge!

I play daily and coach at my kid's school, so I love seeing the interest

If you're want to learn about chess, here are some great free resources (thread)


2/ How to play & basics

Great YouTube

3/ Opening principles

https://t.co/DGpYH4FzY2

@thechesswebsite

4/ Common beginner

5/ Advanced topics

Chess Holes:
https://t.co/hBwFFjV7RC

6 Power Moves of
SPORT
Brian Feroldi
Brian Feroldi
@BrianFeroldi
1/ How to review quarterly earnings 🧵

A step by step guide using $DXCM as an example

⬇️

2/ The BIG question: Is the thesis on track❓

Other question:

❓Is revenue growing?
❓Are margins stable/expanding?
❓Profits?
❓Balance sheet?
❓New opportunities?
❓New threats?

3/ I open 4 browser tabs

Tab 1 - Current company earnings report / shareholder letter

Tab 2 - Previous company earnings report / shareholder letter (check guidance)

Tab 3 - Analyst estimates

Tab 4 - Call Transcript


4/ Tabs 1 & 2 - Find the current & previous earnings report

I search "Dexcom Investor Relations"

I click on "press release"

Open the newest quarterly earnings report and last quarter

It can also be a shareholder letter/presentation


5/ Tab 3 - Find the quarterly analyst estimates

Open up $DXCM in yahoo finance

The "news" section usually has a link to reports on whether the company beat/met estimates

The "analysis" tab is a good source, but sometimes it updates to the next quarter too quickly
TRADING , ALL , AR
Advertisement
Brian Feroldi
Brian Feroldi
@BrianFeroldi
I asked, “What are the first metrics that you look at when evaluating a new stock?”

I received 322 replies

Here are 10 great metrics to look at first (and how to find them):

1/ Market Capitalization

Why: Shows the current size/scale of the business

Where: @YahooFinance (image), @theTIKR , @KoyfinCharts ...etc


2/ Sales Growth Rate

Why: Shows the business model works & current growth rate

Where: @stockcardhq (image), SEC filings, @theTIKR...etc


3/ Free Cash Flow

Why: Is business generating cash or burning cash?

Where: @YahooFinance (image), SEC Filings, @stockrow1...etc


4/ Returns on capital (ROE, ROIC, ROA)

Why: Shows capital efficiency of business

Where: @stockrow1 (image) , @ycharts , @YahooFinance...etc
FUNDAMENTAL , FUNDAMENTAL ANALYSIS
Brian Feroldi
Brian Feroldi
@BrianFeroldi
I asked, “What book do you re-read the most?”

I received 441 replies

Here are 20 books that should be read again and again:

1/

7 Habits of Highly Effective People

by Steven Covey


2/

A Short History of Nearly Everything

by Bill Bryson


3/

As A Man Thinketh

by James Allen


4/

Atomic Habits

by @JamesClear
BOOKS , ALL , READINGS
Brian Feroldi
Brian Feroldi
@BrianFeroldi
I asked, “What company is worth less than $10 billion today but you think could be worth $500+ billion in a few decades?”

I received 710 answers

Here are 20 top stocks that have 50x+ potential:

1: Alteryx - $AYX

Market cap: $5.1 billion

What it does: Big data analytics

2: Boston Omaha - $BOMN

Market Cap: $900 million

What it does: Berkshire Hathaway 2.0

3: Beyond Meat - $BYND

Market Cap: $7.9 billion

What it does: Plant-based meat

4: Desktop Metals - $DM

Market Cap: $2.3 billion

What it does: 3D Printing
IDEAS

More from Finance

Kevin Dahlstrom
Kevin Dahlstrom
@Camp4
🤔 Thread: More of the wrong thing is less
(or, how I stepped off the hamster wheel)

I’m going to share a personal story with hope that it inspires at least one person to re-examine their definition of success 👇

Through hard work and an unfair share of luck, I’ve done some cool “bucket list” things in my career:

✅Raised VC from the worlds’ top firms
✅Helped build 100’s of millions in revenue from nothing
✅Rang the bell at the NYSE
✅Met & did deals with billionaires & business icons

These are things I dreamed about when I was young and I treasure some of the memories. But when they finally happened I felt surprisingly unfulfilled. I was scoring lots of points but didn’t feel like I was winning.

Then a few years ago during a board meeting I had a moment of clarity. I looked around the table at 10 people, all absurdly successful by financial measures. There wasn’t a single person I wanted to emulate. Most were unhealthy and several had told me that they were unhappy.

Within months I walked away from from a 7-figure salary, moved my family to Boulder, & haven’t looked back. Don’t get me wrong, I’m a capitalist & like money as much as anyone. But for me it's not the thing, and *more of the wrong thing is less*.
FINANCE , VISION
\uc2e0\ub150\uc758\uc0ac\ub098\uc774
신념의사나이...
@Belposto_korea
Introducing “Financial Service Centers.” The future of the new Financial Service Industry.

There is a need that the banking system has provided for all of society that cannot be eliminated within the new Quantum Financial System./1

The financial system is the glue that holds society together as we go about our commerce one with another. It is essential./2

As long as money is used to exchange goods and services, it is a service that must continue in some form, hopefully, better. Positioning ourselves to perform this service is essential./3

As the Zim Benefactors begin their humanitarian activities, a new Financial Service Industry will need to be created out of the demise of the banks. It is a major facet of society that few Zim Benefactors have given any thought to./4

The Financial Services Industry is just as important as putting food on the table and a roof over the heads of humanity if society is to be successful. Again, it is the glue or mortar, that keeps the bricks of society together./5
FINANCE
Advertisement
Simon Lelieveldt
Simon Lelieveldt
@finhstamsterdam
The Dutch regulator and DNB as financial supervisor are a tough cookie to deal with. In essence they hyperregulate EU-rules into goldplated Dutch rules which go beyond what is prescribed in Europe.

All NL-customers at British banks may thus be kicked out on brexit.

Thread

/1

If we start with the capital requirements directive, it says attracting deposits is forbidden. In article 9.

https://t.co/RYl7SXligC


Now the translation of that rule into Dutch law is slightly expanded to not only prohibit attracting deposits, but to also prohibit, having those deposits under custody ('ter beschikking hebben').

That's not in EU law, but it is in our Dutch law.

https://t.co/PsbWfNY3PA


So if you wonder how this would work out for UK banks and Payment institutions servicing Dutch customers. Have a read at the technical explanation of DNB, the financial supervisor and their summarising table.

https://t.co/LL0fAnYkRJ

Passive servicing of Dutch is not allowed!


Any bank or PSP in the UK that continues to serve Dutch customers (as in retail customers, professional players are excepted) can thus be subject to fines and policing under Dutch law.

Meaning we not only have Accidental American issues in payments, but also Accidental Dutchies
FINANCE
Finalysis
Finalysis
@Finalysis20
Attended a clubhouse talk on:

"Common Investing mistakes" hosted by
Hena Mehta @hena1220 co-founder of Basis with
Aditi Kothari Vice Chairperson DSPMF &
Kalpen Parekh @KalpenParekh MD-CEO DSPMF
moderated by Dipika Jaikishan @dipikajaikishan

🧵 on key learnings:
@getbasis
@dspmf


A common investing mistake:

Taking out money when market falls!

Reason:

~ It's difficult to get in once you get out

~ If you manage to get in you will be late and lose the rise in the market.

Don't exit when market falls, neither stop the SIPs.

What's important for an investor?

Avoid being a bad investor; than worrying about being a good investor.

Basic mistake in investing:

Not knowing why we are investing!

We often invest because:

~ Others are doing it
~ We see the particular asset class is popular

But we don't understand the asset class

Wrong reasons for investing in asset class!

Gold : Because of family culture or as a symbol of inter-generational wealth.

FD: Because it's safe

Equity : To double money quickly!
FINANCE
Varsity
Varsity
@ZerodhaVarsity
A 🧵on the basics of block and bulk deals.

Block and bulk deals are large purchases of stocks by investment banks, mutual funds, hedge funds, pension funds, FIIs, and promoters. Tracking block and bulk deals can help give you a sense of what these large players are thinking.

A single transaction where shares more than Rs 10 crores or the number of shares traded are more than 5 lakh is considered a block deal.

Block deals are carried out in separate trading windows. This trading window operates in two shifts of 15 minutes each:

Morning trading window from 8:45 AM to 9:00 AM.
Afternoon trading window from 2:05 PM to 2:20 PM

Block deals happen in different windows to reduce volatility and sudden price movements. Given that they are traded in a separate window, they do not show up on the volume charts.

Brokers facilitating the transaction are required to inform the exchange. You can track bulk and block deals on NSE & BSE:
https://t.co/pwTyzWTnUL

https://t.co/g9BbHiEag3
FINANCE , MARKETINFO , BLOCK DEALS

You May Also Like

Aditya Todmal
Aditya Todmal
@AdityaTodmal
The absolute best 15 scanners which experts are using.

Got these scanners from the following accounts:

1. @Pathik_Trader
2. @sanjufunda
3. @sanstocktrader
4. @SouravSenguptaI
5. @Rishikesh_ADX

Share for the benefit of everyone.

Listing all scanners from @Pathik_Trader Sir first.

1. Open

2. 80-20 Reversal Setup


3. Fake

4. Trapping Inside Bar (Positional Setup)
TECH , STOCKLEARNINGS , STOCKS
dan spaceman
dan spaceman
@ohlaika
I'm gonna do my other star wars thread tomorrow, which will primarily be me yelling at a @RowanKaiser-shaped strawman for calling the First Order and The Resistance "cosplayers who the rest of the galaxy has to deal with"

the deal w/the New Republic, the First Order, and the Resistance is very weird and complex and I actually take issue with how Story Group frames the actual conflict.

pre-TFA stuff is presented as a "cold war" between the New Republic and the remnants of the Empire that form the First Order, which 100% makes sense.

But they frame the First Order's attack on the Hosnian system and the subsequent battle that takes place across TFA and TLJ as a full on war when it's very clearly a coup. A war implies at least equal standing, but the First Order completely wrecks shop and takes over the galaxy.

ok never mind I'm fucking doing this now.

The First Order fleet we see in TLJ is *not* the entire fleet of the First Order (I don't even think Starkiller Base was their main base of operations honestly, it couldn't have been considering they were operating out of Wild Space)
CULTURE
Advertisement
Matt Fuller
Matt Fuller
@MEPFuller
They’re shooting into the chamber.
POLITICS
Murray \U0001f1fa\U0001f1f8
Murray 🇺🇸...
@Rothbard1776
NEW: @GenFlynn interview w/ @newsmax [on his view of the 2020 Election and what should happen next] "First of all, @realDonaldTrump won on the 3rd of November. The things that he needs to do right now [are]: appoint a Special Counsel, immediately; seize all of these Dominion and

2/ other voting machines that we have across the country; he needs to go ahead and prioritize by state, and probably by county [Fulton County, Maricopa County, as an example]. Exactly what they did up in Antrim County, MI, and what they discovered. I think if he looks

3/ at a random sampling of some of these counties, he's going to find exactly the same problem. These machines are clearly, CLEARLY, there is a foreign influence that is tied to this system, and it goes back to China. It likely goes to Russia. Likely goes to Iran. We know that

4/ Venezuela has participated in the development of these machines. There's been problems all over the country with them. Not only with Dominion, but with this Smartmatic software. He's got a couple of options that he can take, and he needs to take them right now.

5/ The President could, immediately, on his order, seize every single one of these machines around country, on his order. He could also order, within the swing-states [if he wanted to], he could take military capabilities and he could place them in those states & basically re-run
POLITICS
Vibhu Vashisth
Vibhu Vashisth
@VIBHU_Tweet
🌺कैसे बने गरुड़ भगवान विष्णु के वाहन और क्यों दो भागों में फटी होती है नागों की जिह्वा🌺

महर्षि कश्यप की तेरह पत्नियां थीं।लेकिन विनता व कद्रु नामक अपनी दो पत्नियों से उन्हे विशेष लगाव था।एक दिन महर्षि आनन्दभाव में बैठे थे कि तभी वे दोनों उनके समीप आकर उनके पैर दबाने लगी।


प्रसन्न होकर महर्षि कश्यप बोले,"मुझे तुम दोनों से विशेष लगाव है, इसलिए यदि तुम्हारी कोई विशेष इच्छा हो तो मुझे बताओ। मैं उसे अवश्य पूरा करूंगा ।"

कद्रू बोली,"स्वामी! मेरी इच्छा है कि मैं हज़ार पुत्रों की मां बनूंगी।"
विनता बोली,"स्वामी! मुझे केवल एक पुत्र की मां बनना है जो इतना बलवान हो की कद्रू के हज़ार पुत्रों पर भारी पड़े।"
महर्षि बोले,"शीघ्र ही मैं यज्ञ करूंगा और यज्ञ के उपरांत तुम दोनो की इच्छाएं अवश्य पूर्ण होंगी"।


महर्षि ने यज्ञ किया,विनता व कद्रू को आशीर्वाद देकर तपस्या करने चले गए। कुछ काल पश्चात कद्रू ने हज़ार अंडों से काले सर्पों को जन्म दिया व विनता ने एक अंडे से तेजस्वी बालक को जन्म दिया जिसका नाम गरूड़ रखा।जैसे जैसे समय बीता गरुड़ बलवान होता गया और कद्रू के पुत्रों पर भारी पड़ने लगा


परिणामस्वरूप दिन प्रतिदिन कद्रू व विनता के सम्बंधों में कटुता बढ़ती गयी।एकदिन जब दोनो भ्रमण कर रहीं थी तब कद्रू ने दूर खड़े सफेद घोड़े को देख कर कहा,"बता सकती हो विनता!दूर खड़ा वो घोड़ा किस रंग का है?"
विनता बोली,"सफेद रंग का"।
तो कद्रू बोली,"शर्त लगाती हो? इसकी पूँछ तो काली है"।
ALL