Judging a hyper-growth stock by what it can become someday is like astrology.

It's too random to be useful.

think different

src: intelligent investor

earning growth -skill
re rating - luck

those who don’t believe this, haven’t been in the market long enough to understand this.

Charles Kindleberger: “There is nothing as disturbing to one’s well-being and judgment as to see a friend get rich”

zomato’s mcap = 70k cr
if you are a value investor, as per buffett’s logic of good price -> zomato must earn 7,000 cr to 8,500 cr pre-tax profit by fy 27
(actually more as India’s cost of equity is higher)
zomato peak sales 2600 cr

lot of dumb ppl have commented shit despite a mention “if you are a value investor..”

@Bapu__Mishra hardly. 30-40 stocks is fine

Has anyone compared AB Fashion in lieu with Nykaa valuations?

Nykaa FY21 TOTAL sales at around 2500 cr: expected m-cap over 50,000 cr

Aditya Birla Fashion FY21 online e-commerce sales 900 cr (total sales 5600 cr) – has done 8700 cr pre-covid; m-cap is 25,000 cr

#justcurious

1/ @mjmauboussin's book Expectations Investing is a masterclass in valuation & strategy

His framework uses price-implied expectations to assess companies, an elegant way to invert valuation

https://t.co/kESplMN3nW

To practice these concepts, I wrote a case study on Chipotle⤵️

2/ Chipotle is the leading fast casual restaurant chain across the US, with almost 3,000 owned & operated locations

They benefit from strong unit economics and a trusted brand

We'll discuss consensus estimates, competitive landscape, and expected

3/ We must first identify the price-implied expectations based on key value drivers

After finding the consensus estimates, investors can seek opportunities in the expectations - looking for a divergence from the market's assumptions

Let's start with Chipotle's sales growth

4/ Chipotle has grown revenues from $3.9B to $7.55B over the past 5 years, at a 5 year CAGR of 14.1%

Analysts estimate a 13.7% consensus growth rate based on 5-7% same store sales growth, 8% additional store openings per year, and steady digital sales contribution

5/ Next is operating profit margin, which measures profitability from core operations

Chipotle has slowly been growing its margin, now at 10.67%

Analysts expect high margins of 15.75%, with incremental profits from digital orders and unit-level margin growth contributing

@ramnath2015 DCF is a lot of bullshit.
5 yrs back u could have run a DCF in ITC and come to great conclusion but over the last 5 yrs the youth globally has moved away from cigarettes to weed

"I think you can predict the future in a few places best if you understand a few basic ideas that come from a good general education"

I love Munger's speech "Practical Thought About Practical Thought?" where he breaks down his $KO analysis.

https://t.co/1Hmzryb3vl

Touching on part of the IV analysis, TAM analysis is often considered nonsensical in certain value investing circles

Yes, TAM can be twisted around to make any investing thesis look better or worse, just like any DCF, but I found it instructive how Munger thinks thru $KO's TAM

Here's a fun fact for all the proponents of buying 'Quality companies at any price':

Wipro is a 'Quality Company' and a part of Nifty 50 for most part of the last 20 years

Between 2000-2021, Sales went up 22x while profits went up 33x

Stock returns were basically almost ZERO