BC VALUATION

$Fundamental Investor \u2122 \U0001f1ee\U0001f1f3$

Fundamental Investor ™ 🇮🇳
@FI_InvestIndia 3 years, 6 months ago 391 views

While Financially Analyzing Businesses (esp Small Leaders), this is THE Order:

- Cash Flow Statement (Focus on Operating Cash)
- Cash Position

- Balance Sheet Strength
- Never Miss Receivables

- P&L

Cash >> Balance Sheet >> Finally P&L

#FI

More from Valuation

Paying 50-100x earnings for 'blue ocean' sectors has become normalized with promise of changing trends and immense future opportunity. Stock markets look forward, if the future opportunity is great, in most cases that 100x valuation already factors a 30x valuation in 3 years.

For investors, the question of where the buck stops is difficult to answer, because the goal post keeps changing. 30x is reasonable for one business, for another 70x is acceptable. So why not everything in between too?

Not every business captures the opportunity available. There is many a slip between the cup and the lip, as my English teacher used to say. When investors have seen valuations creep from 20x to 100x in a matter of a year or two, it is easy to to keep dancing to the same music.

But like we used to play musical chairs in childhood, someone will be left standing too. And here the rules aren't that 1 person gets eliminated at a time, hundreds get crushed at the same time. In childhood, we had a 1/X chance of being caught standing when the music stopped.

The margin of safety was high till you got down to the last 3-4 people playing the game. Similarly, your margin of safety reduces dramatically when valuation becomes irrelevant. A few months of underperformance and suddenly things don't look so rosy any more.

Intrinsic Compounding
@soicfinance

A word of advice and caution. When you buy a High Pe stock. Make sure that you are very certain about the growth. Plenty of good and bad examples

Eicher=Growth stopped, Got derated.

Pi Industries= At 52+Pe in 2015, growth continued (5bagger since then)

Symphony=Growth stopped as more competitors copied them, painful time correction.

Astral=Kept growing and entering newer adjacencies since 2015 when it was at 60+ Pe. (Been a 10 bagger since then)

Page Industries=Growth stopped as the company matured. No returns for last 4 yrs.

Bajaj Finance= Kept growing (barring Pandemic). Kept rerating with the earnings growth.

HDFC Life=Been absurdly valued since 2018. Leading to very poor returns.

Relaxo=Kept getting rerated on back of earnings growth.

High Pe means market is expecting strong earnings growth. What happens when it fails to come? Likely derating or painful time correction.

Paying a high multiple, you need to make sure that the growth is certain.

What I do to grasp such opportunities or to ignore them is to have a mix of deeply valued companies (like some financials I own) with Companies where I think they will grow at 30-35%+ (Navin).

This is what my framework is:-

Pf=High Pe+Already seen value+Strong earnings growth

Hemant Kanungo
@KanungoHemant

@sahil_vi @suru27 Just because a company is fundamentally very very strong , doesn’t mean an investor would end up getting rewarded always . The term called “Valuation”needs to be respected which ultimately gives you margins of safety and comfort in panic situations .

Kai Wu
@ckaiwu

June's research paper: Intangible Value ✨

Can value investing strategies be improved by adding intangible assets?
👾 The Asset-Light Economy
🔮 The Dark Matter of Finance
🏰 Intangible Moats
📉 The Disruption of Value
👨‍🎓 Fixing the "Value Factor"

(Not investment advice)

🧵

(0/10) Full paper here 📘

Blog
https://t.co/omtrn9kfvt

(1/10) The Asset-Light Economy 👾

“The four largest companies today by market value do not need any net tangible assets. They are not like AT&T, GM, or Exxon Mobil, requiring lots of capital to produce earnings. We have become an asset-light economy."

- Warren Buffett

(2/10) The End of Accounting 🧮

“The constant rise in the importance of intangibles in companies’ performance and value creation, yet suppressed by accounting and reporting practices, renders financial information increasingly irrelevant.”

- Baruch Lev and Feng Gu

(3/10) The Dark Matter of Finance 🔮

While intangible matter holds the financial universe together, it is not visible to the naked eye. Unstructured data contains info on intangibles but is large, noisy, and resistant to standard statistical analysis.

Katalyst Wealth
@katalystwealth

It's great fun to find a co. where the nos. don't look good on the face of it (one off issues)

But on a deep dive, switching between consol vs standalone, you find great nos. brewing at subsidiary level

As the one off issues get resolved, overall nos. will start looking amazing

It's another day to expose Peter Alabi @pastorpeealabi of @HoFChurchNG & @ChristTribe. More victims have reached out to us. Unknown to many, Peter Alabi is actually an unrepentant serial sexual abuser. We know that he's been lying that he has repented and that the stories...

... we have put out so far are only with reference to what happened years back. But we can also confirm that he continued to prey on more victims even after he left Ife in 2016. We also know that Peter Alabi made serious attempts to sleep with some ladies during the lockdown...

A victim, who was one of those Peter Alabi tried to sleep with during the Covid-19 lockdown has shared with us some of the chats between her and Peter Alabi, which were initiated by Peter Alabi. According to the victim, when Peter Alabi's intentions became obvious, she decided...

... to play along and act like she was in concert with him. This eventually made Peter Alabi to reveal his covert intentions to sleep with her. The chat began on Instagram in March 2020 and continued on WhatsApp till June 2020. We will be sharing screenshots of the Instagram...

... chats below. Later today, we will share the WhatsApp chats which are more revealing and expository. Please see the screenshots of the Instagram chats between Peter Alabi (peterayoalabi) and the victim below👇🏾 @oauchristians @HoFChurchNG @peterayoalabi @funlola_alabi

Aditya Todmal
@AdityaTodmal

A THREAD ON @SarangSood

Decoded his way of analysis/logics for everyone to easily understand.

Have covered:
1. Analysis of volatility, how to foresee/signs.
2. Workbook
3. When to sell options
4. Diff category of days
5. How movement of option prices tell us what will happen

1. Keeps following volatility super closely.

Makes 7-8 different strategies to give him a sense of what's going on.

Whichever gives highest profit he trades in.

I am quite different from your style. I follow the market's volatility very closely. I have mock positions in 7-8 different strategies which allows me to stay connected. Whichever gives best profit is usually the one i trade in.
— Sarang Sood (@SarangSood) August 13, 2019

2. Theta falls when market moves.
Falls where market is headed towards not on our original position.

Anilji most of the time these days Theta only falls when market moves. So the Theta actually falls where market has moved to, not where our position was in the first place. By shifting we can come close to capturing the Theta fall but not always.
— Sarang Sood (@SarangSood) June 24, 2019

3. If you're an options seller then sell only when volatility is dropping, there is a high probability of you making the right trade and getting profit as a result

He believes in a market operator, if market mover sells volatility Sarang Sir joins him.

This week has been great so far. The main aim is to be in the right side of the volatility, rest the market will reward.
— Sarang Sood (@SarangSood) July 3, 2019

4. Theta decay vs Fall in vega

Sell when Vega is falling rather than for theta decay. You won't be trapped and higher probability of making profit.

There is a difference between theta decay & fall in vega. Decay is certain but there is no guaranteed profit as delta moves can increase cost. Fall in vega on the other hand is backed by a powerful force that sells options and gives handsome returns. Our job is to identify them.
— Sarang Sood (@SarangSood) February 12, 2020

Brian Cates
@drawandstrike

Great article from @AsheSchow. I lived thru the 'Satanic Panic' of the 1980's/early 1990's asking myself "Has eveyrbody lost their GODDAMN MINDS?!"

For three years I have wanted to write an article on moral panics. I have collected anecdotes and similarities between today\u2019s moral panic and those of the past - particularly the Satanic Panic of the 80s.

This is my finished product: https://t.co/otcM1uuUDk
— Ashe Schow (@AsheSchow) September 29, 2018

The 3 big things that made the 1980's/early 1990's surreal for me.

1) Satanic Panic - satanism in the day cares ahhhh!

2) "Repressed memory" syndrome

3) Facilitated Communication [FC]

All 3 led to massive abuse.

"Therapists" -and I use the term to describe these quacks loosely - would hypnotize people & convince they they were 'reliving' past memories of Mom & Dad killing babies in Satanic rituals in the basement while they were growing up.

Other 'therapists' would badger kids until they invented stories about watching alligators eat babies dropped into a lake from a hot air balloon. Kids would deny anything happened for hours until the therapist 'broke through' and 'found' the 'truth'.

FC was a movement that started with the claim severely handicapped individuals were able to 'type' legible sentences & communicate if a 'helper' guided their hands over a keyboard.

$MaMaMia \U0001f1ec\U0001f1f7\U0001f1e8\U0001f1fe\U0001f1e6\U0001f1f2 SupportGreekProducts$

MaMaMia 🇬🇷🇨🇾🇦🇲 Support...
@MaMaMia73189983

Following @BAUDEGS I have experienced hateful and propagandist tweets time after time. I have been shocked that an academic community would be so reckless with their publications. So I did some research.
The question is:
Is this an official account for Bahcesehir Uni (Bau)?

Bahcesehir Uni, BAU has an official website https://t.co/ztzX6uj34V which links to their social media, leading to their Twitter account @Bahcesehir

BAU’s official Twitter account

BAU has many departments, which all have separate accounts. Nowhere among them did I find @BAUDEGS
@BAUOrganization @ApplyBAU @adayBAU @BAUAlumniCenter @bahcesehirfbe @baufens @CyprusBau @bauiisbf @bauglobal @bahcesehirebe @BAUintBatumi @BAUiletisim @BAUSaglik @bauebf @TIPBAU

Nowhere among them was @BAUDEGS to find

While Financially Analyzing Businesses (esp Small Leaders), this is THE Order:- Cash Flow Statement (Focus on Operating Cash)- Cash Position- Balance Sheet Strength- Never Miss Receivables- P&LCash >> Balance Sheet >> Finally P&L#FI

More from Valuation

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While Financially Analyzing Businesses (esp Small Leaders), this is THE Order:

- Cash Flow Statement (Focus on Operating Cash)
- Cash Position

- Balance Sheet Strength
- Never Miss Receivables

- P&L

Cash >> Balance Sheet >> Finally P&L

#FI