Some Excellent articles on Financial Ratios and Analysis.
h/t @discover_ci 👏

1⃣ Profitability

"The Peter Lynch Playbook". An epic 23 page compilation of all things Peter Lynch. Fantastic effort by Mayur Jain @MJBaldBard 👏👏

One of those must read documents for individual investors.
CC: @dmuthuk @Gautam__Baid @saxena_puru @BrianFeroldi

Goes into 6 categories of Stocks
1) SLOW GROWERS
2) ASSET PLAYS
3) STALWARTS
4) TURNAROUNDS
5) CYCLICALS
6) FAST GROWERS

& details like
Traits
Examples
People
PE Ratio comments
2 Min Drill
Checklist
Portfolio Allocation %
Risk/Reward
When to

Lot of great points on topics like

✔️DESIGNING A PORTFOLIO
✔️STOCK PICKING
✔️INVESTING PSYCHOLOGY
✔️RISK MANAGEMENT
✔️MARKET TIMING
✔️SILLIEST (AND MOST DANGEROUS) THINGS PEOPLE SAY ABOUT STOCK PRICES
✔️PETER’S PRINCIPLES; and 25 GOLDEN RULES
✔️SCUTTLEBUTT
✔️WALL STREET

The section on Investing Psychology is excellent. Below are some of my fav pts.

Some more fav pts form various sections.

"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 ⬇️

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. ⬇️

One of my all-time favorite articles on "Investing Mistakes". h/t Altais Advisors @basrars @vishalmittal22 👏

So many good lessons here for long-term investors in individual stocks. My fav pts in the thread below.

1⃣ Selling good businesses too early: without giving due importance to long term growth outlook and the potential of the business to scale.

If you are invested in a growing business, do not sell it for temporary overvaluation,

there may be some time correction which is fine, which should be managed at a portfolio level. At the same time, one needs to be careful of slowing growth or fundamental deterioration in the business.

2⃣ Going down the Quality curve: Selling good companies, which were growing well, and investing in cheaper but low quality/ growth companies. Over the cycle, this results in sub optimal returns.

3⃣ Waiting for a little lower price to buy: Losing 10-20 baggers waiting for 20-25% lower price! Missing the boat on so many opportunities trying to just get them a bit cheaper, which never comes.

Excellent summary of Philip Fisher's book "Conservative Investors Sleep Well".

Plenty of great points on identifying the growth potential, managerial capability and defensiveness of a Company.

cc: @dmuthuk

Characteristics of high quality companies with good long term prospects

✔️Lowest-cost
✔️Customer focused
✔️Effective research
✔️Strong marketing
✔️Good accounting

People factors

✔️Determination, competence and teamwork
✔️Internal development and promotion
✔️Entrepreneurial and disciplined
✔️Genuine and conscious culture

Business characteristics to grow and defend

✔️Profit margins
✔️Barriers to entry
✔️First mover advantage (& extending that Leadership)
✔️Competition and substitution
✔️Economic moats

Few of my fav pts from the article. Not every Company will have all these traits, but the more the better.

1/ The SPAC I’ve been tracking is $SAII, merging with Otonomo.

It’s a marketplace that enables auto manufacturers to monetize their connected car data that it aggregates and standardizes using its data platform. It projects revenue to grow from $3M in 2021 to $574M by 2025.

2/ Platform:

Otonomo is standardizing data using its patent-pending technology from its 16 OEM partners including Ford, GM, and BMW who provide data on 40M connected cars (4.3B data points daily), to make it easily usable by consumers and developers who can access it via API.

3/ Similar to other aggregators like $ROKU or $TTD, one of their biggest advantages is their neutrality. Many mobility services can’t operate well without data from multiple OEMs but individual OEMs lack the incentive to share their data with competitors.

4/ Otonomo is collecting over 150 data parameters per vehicle such as engine status, temperature, speed, location, fuel or battery levels, or seatbelt status. This is then normalized across OEMs and car models, anonymized, cleansed, and enriched through AI/ML.

5/ There are hundreds of use cases that range from helping drivers to find parking to helping rental companies monitor their fleets in real-time or insurance companies offer usage-based insurance and better claims processing. Otonomo charges usage-based fees based on use-case.

1) Get a cup of coffee.

In this thread, I'm going to walk you through "The Kelly Criterion".

2) In 1956, John Kelly published a paper titled "A New Interpretation of Information Rate" in the Bell System Technical Journal.

3) In the paper, Kelly described a simple and elegant way for investors to strategically allocate capital in the face of uncertainty.

This is what is now known as the Kelly Criterion.

4) The approach is easiest to understand with an example.

I'll keep it as realistic as possible:

Imagine that you walk into an antique store one day. Due to the persistence of the salesman there, you buy an old lamp from him.

5) You take the lamp home. You rub it. Out comes a genie. Nothing unusual.

Worried about the recent market drop?

Here are 24 top investing quotes from Buffett, Bogle, Graham, and more that can help🧵

"If you have trouble imagining a 20% loss in the stock market, you shouldn’t be in stocks."

-- John Bogle

"Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble."

-- Warren Buffett

“Individuals who cannot master their emotions are ill-suited to profit from the investment process”

-- Benjamin Graham

"A calm sea does not produce a skilled sailor."

-- Tom Culve

Saturday thoughts on market pull. What is it? How is it different from Total Addressable Market (TAM)? And what ideas tend to have strong market pull?

A thread >>

1) First: "Market pull" != market size.

IMO (and most VCs will disagree!!), market size (TAM) doesn't *really* matter. But market pull DEFINITELY does. For that reason, I've almost never asked a startup about TAM.

Why?

2) First, what is TAM?

TAM is a sizing of how big your market is. A good way to estimate this is - if you can get to all potential buyers and based on how much $$ they are worth to you, how much money can your company make if you took the whole mkt?

3) An example: Say we run an e-commerce site that sells hippo food. TAM in the world:

-1000 zoos have on average 3 hippos = 3000 hippos.
-Each hippo eats $100 worth of food each day
-365 days * $100 * 3000 hippos = $110m per year globally

4) But, we'll come back to this.

Why I don't like TAM - it doesn't take into acct a few things:

A) how hard it is to get customers
B) how much more you can upsell once you have customers
C) how fast the mkt is moving up or down