BC IDEAS
Saved by @AnmolNarula11

Why Reading and observing different trends matter.

Time for a thread with a live example that is playing out in front of us! 🎵🎵

🧵🧵🧵🧵🧵

 “What is elementary, worldly wisdom? Well, the first rule is that you can’t really know anything if you just remember isolated facts and try and bang ‘em back. If the facts don’t hang together on a latticework of theory, you don’t have them in a usable form.”- Charlie Munger
Charlie Munger who is the partner of Warren Buffett, has over the years explained the importance of creating a latticework of mental models. That is basically combining theory with live practical examples
One of the most interesting mental models he talked about in his books was that of Autocatalysis (lets understand this and how we can apply it to a live example):

"Disney is an amazing example of autocatalysis. They had all those movies in the can.
They owned the copyright. And just as Coke could prosper while refrigeration came, When the video cassette was invented, Disney didn’t have to invent anything or do anything except take the thing out of the can and stick it on the cassette.
And every parent and grandparent wanted his descendants to sit around and watch that stuff at home on videocassette. So Disney got this enormous tail wind from life. And it was billions of dollars worth of tail wind.
Obviously, that’s a marvelous model if you can find it. You don’t have to inventanything. All you have to do is to sit there while the world carries you forward."

A live example is the Music Licensing Businesses like Saregama and TIPS. Both the businesses suffered
over the years due to rampant piracy. The entire music industry de-grew due to websites like torrents, song-PK and rampant piracy.
However, here is where the idea of autocatalysis comes in. The patterns of distribution changed. Have you observed how youngsters around you are listening to music over streaming applications like Wink Music or Spotify? Growth of streaming applications has acted like
an autocatalysis for Music Library/IP owners like Saregama or Tips. This is just not it, just look at the growth rates of viewership of YouTube :

https://t.co/ukl1HUYCOI
Such are the tailwinds. Just check the number of views on recently released song by Saregama (Badshah). It has already crossed a mind boggling 500 VIEWS!

Multiple Lollapalooza come together to create extremely strong trends.

https://t.co/zdusVUBEIe
Mini trends completing the lollapalooza here:

1. Growth of streaming business
2. Growth of Youtube viewership in India
3. Increasing internet penetration
4. Usage of retro music and remix in sitcoms, and by OTTs.
5. Insta reels
6. Finally, an optionality of Audio NFT!
Read, read and read. Hope to have a few insights :)

Watch our Saregama Video🎵🎵 to know more about how autocatalysis is playing out! (positively biased)

https://t.co/hfe6zfy8lt

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Tomorrow at 11am on our Youtube channel. Have simplified it to an extent that even a 5th Grader understands the key terms 🙏

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Take debt at an average rate of 0.7%. Buy Japanese stocks with dividend yield of 4%.

Stocks double, yields are itself enough to pay off the debt.

One and only true legend who has stuck to finding these idiosyncratic opportunities- Warren Buffett. Others can buy Shopify at 60 PS

Warren Buffett at 91 Years remains a vastly superior investor to the new called Tech Gurus. Reason being- Valuation focused and doesn't get carried away with the trend. That's the discipline..
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This thread is for investors or those who are interested in CDSL as an investment. Often the central reason quoted for an investment here is the gush of FCF the business produces and some float money also to boot. But this argument ignores a central problem as well. (1/11)

I completely agree that CDSL is a business that produces ample amount of Free Cash. So, it begs the question: "What are they doing with all that cash?" Generally, firms can utilize the cash on their books in 4 ways: Dividends, Acquisitions, Capex/Investments and Buybacks. (2/11)

CDSL does have a Dividend Payout Ratio of ~35-40%. But Dividends are the least efficient way of utilizing cash, due to the Triple Taxation on Dividends. More

Handled well, Inorganic Growth is so lucrative that some companies build their business models around acquisitions (Say, MSSL or Cyient). However, CDSL literally CAN'T be one such company. Read 7 (c) of the below regulatory document to know more:

https://t.co/071lwnnwJ4

(4/11)


CDSL can also reinvest cash into their own business, like most companies do. But CDSL (And most Exchanges) have little need for Capex/Reinvestment. CDSL's IPO came in at Rs. 523.99 Crores. Two years in, the Cash and Investments on their books stands at Rs. 650 Crores. (5/11)
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A humble prediction. Seeds are being sown around the world for a comeback of nuclear energy. In the next decade, we can see government’s around the world approving more nuclear reactors as they realize they aren’t going anywhere near net carbon zero with wind and solar. 🧵

Take Australia for example. It is home to 1/3rd of the world’s uranium - the chemical element needed to produce nuclear energy in reactors but doesn’t have a single nuclear reactor to generate electricity.

Which is fine as long as you have other sources of energy that are cheap, plentiful and reliable. But South Australia’s energy prices are arguably the highest in the

The European Commission released a very important report this April. In its assessment, it concluded that nuclear energy had near to zero greenhouse gas emissions in energy generation phase and can be a contributor to climate mitigation

What about radioactive waste management? France which produces 75% of its energy requirements from nuclear is a great example.
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