Excellent article on Investor psychology & Market cycles based on Howard Marks' "Mastering the Market Cycle".

cc: @dmuthuk @Gautam__Baid

Insights from Philip Fisher. One of the best docs I came across for individual investors.

Phenomenal effort by @SiddharthVoraPL @PLIndiaOnline 👏👏

cc: @dmuthuk @Gautam__Baid @saxena_puru

https://t.co/K19gWk9TFO

Philip Fisher's 15 points, simplified. ⬇️

His Investment strategy and Search strategy. ⬇️

Full scale scuttlebutt is not possible for individual investors (lack of time, resources, contacts), but with efficient search & communication online (tuning out the noise), there are still some ways to do good research.

Good sequence of steps to filter from a wider universe of companies to the few promising ones that meet the criteria. ⬇️

Excellent Checklist for Business, Management and Financial characteristics. ⬇️

"Poor Charlie’s Almanack" about Charlie Munger is a phenomenal book that should be read by all investors at least once. Excellent summary of that book by @allenxcheng👏

cc: @dmuthuk @Gautam__Baid

Thread below with my fav

Topics in the article ⬇️

Key points ⬇️

Mental Models suggested ⬇️

On Constant learning ⬇️

I guess there's a reason for why I❤️E-commerce so much. These lessons are as important as the returns.

Sharing with few Fintwit friends. @saxena_puru @FromValue @dhaval_kotecha @richard_chu97 @adventuresinfi @BahamaBen9 @TMFJMo @7Innovator @borrowed_ideas @investing_city

Thank god I didn't wait for consistent GAAP profitability before investing in them (like I do for most other sectors). 😂

Positions : $MELI $AMZN $BABA $SHOP $ETSY $W $SE $CHWY

Watchlist : $JD $PDD $FTCH $MWK

Haven't analyzed much : $JMIA $OZON

E-Commerce is one of those sectors where you have to understand the Business model and lot of non-GAAP (but Business driving) metrics & KPIs.

I'm not an expert by any means, but these are some of the things I broadly think about.

✔️Is the Company a Marketplace (1st party, 3rd party, both?) or a Platform, a combination?

✔️Does it handle inventory?

✔️Does it handle payments in house?

✔️What other services is it offering to Merchants (Logistics, Shipping, Credit, Marketing ...)

✔️What other services is it offering to Buyers (Digital Wallet, fast shipping, loyalty rewards....)

✔️How is the Company leveraging the Marketplace or Data Network effects?

In 2009, an unknown investor from Russia came out of nowhere to make one of the greatest late stage venture bets in the history of Silicon Valley. Why did FB choose an outsider to lead our Series D round? Here’s the inside story:

2 years earlier we famously raised from Microsoft at $15B valuation. That turned out to be a mistake because it set us up for a painful down round. By 2009 growth had slowed and the financial crisis crushed advertising. “Smart money” bids for our Series D were coming in at $3-6B.

We had a high bid at $8B from a respected valley firm, and we had a wildcard bid from Yuri Milner/DST who offered to top any other bid by 20%. We initially chose the reputable firm at a lower price, but they refused to drop a ratchet provision so we decided to give DST a chance.

Yuri understood 2 things that nobody else could see at the time: 1/ He had seen virtual currencies in Eastern Europe and China, believed FB could make money this way. 2/ We were offering secondary shares at 40% discount to preferred, DST was the only firm who valued this.

Yuri not only offered to clear the highest bid by 20%, he also offered to let Zuck vote all of his shares including any secondary shares purchased from early employees. This allowed Zuck to consolidate his voting power.

✍️CÓMO LEER EL 10-K✍️

Es el informe más importante y antes de invertir en cualquier empresa debemos leerlo y saber interpretarlo.

Papel, lápiz y café.

El 10-k es un informe completo que detalla las actividades de una empresa durante el año anterior.

Su propósito es brindar a los usuarios, como accionistas o potenciales inversionistas, información sobre las operaciones y desempeño financiero de la empresa.

La estructura de los informes anuales, sin duda, variará según cada empresa, pero la mayoría de los informes anuales generalmente contendrán lo siguiente:

▪️Parte 1: Business and Risk Factors

▪️Parte 2: Financial Data and MD&A

▪️Parte 3: Executive compesation

Vamos a ver cada una de ellas (Subcategorias) y cómo se podría analizar.

1. Business
2. Risk Factors
3. Selected Financial Data
4. The Management Discussions and Analysis (MD&A)
5. Directors, executive officers and corporate governance
6. Executive Compesation

1) BUSINESS

Esta es la primera parte del reporte, y es una de la más importante.

Se habla de la actividad principal de la empresa, de cómo gana dinero, de dónde opera.

También de la visión y misión general de la empresa.

THREAD, PM EXIT STRATEGY

I sometimes get the question “At what price do I liquidate my PM portfolio?” The short answer is:

A) I´ll never sell all of it

and

B) I don´t have a PT. I could start selling at $1900 or at $100000, it depends.

For the longer explanation, 👇

Albert Einstein once famously said “Everything is relative”. I find that quote very useful in the world of investing as well.

First off, my preferred style of investing is more influenced by macro than micro (macroeconomics vs company specific).

That means I often buy a commodity, an ETF or a basket of companies operating in the sector of interest.

I frequently look at certain ratios, or said another way, instrument X relative to instrument Y.

By analyzing historical data, I´ve set up different “ratio milestones” for when history tells me to start unwinding the ratio. As these milestones are triggered, I sell 25% of the relatively stronger instrument. For every additional 10% skew in the ratio, I sell another 25% etc.

This means I´ll never pick the absolute top nor the bottom, but I should extract much of the value while keeping my emotions out of it.

An example where this principle is adopted is shown in the Gold/Silver ratio -graph below.

@TheLastDegree Today, the actual size of the silver market is, according to Bloomberg, of $5 trillion.

$5 trillion divided by 20 billion (physical market) = 250

250 X $20 (silver spot price) = $5,000 an ounce