The Long Investor
I’m going to be very honest:
A LOT of people should not be investing (and certainly not trading) in anything other than a Market Index ETF
Like the $SPY and just routinely add to it every month for 30 years.
The very basics of investing are not understood by the vast majority of people.
Let’s be clear here:
Start learning
tweet
I’m going to be very honest:
A LOT of people should not be investing (and certainly not trading) in anything other than a Market Index ETF
Like the $SPY and just routinely add to it every month for 30 years.
The very basics of investing are not understood by the vast majority of people.
Let’s be clear here:
Start learning
tweet
Offshore
Photo
Dimitry Nakhla | Babylon Capital®
RT @DimitryNakhla: A sober valuation analysis on $MSCI 🧘🏽♂️
•NTM P/E Ratio: 37.26x
•10-Year Mean: 34.88x
•NTM FCF Yield: 2.94%
•10-Year Mean: 3.39%
As you can see, $MSCI appears to be trading above fair value
Going forward, investors can receive ~7% LESS in earnings per share & ~13% LESS in FCF per share 🧠***
Before we get into valuation, let’s take a look at why $MSCI is a good business
BALANCE SHEET🆗
•Cash & Short-Term Inv: $457.82M
•Long-Term Debt: $4.49B
$MSCI has an ok balance sheet, a BBB- S&P Credit Rating, & 6.62x FFO Interest Coverate
RETURN ON CAPITAL✅
•2019: 23.4%
•2020: 28.6%
•2021: 26.5%
•2022: 33.0%
•2023: 35.2%
RETURN ON EQUITY🆗
•2019: (463.5%)
•2020: (231.5%)
•2021: (239.3%)
•2022: (148.6%)
•2023: (131.4%)
*ROE negative due to heavy use of debt
$MSCI has strong return metrics, highlighting the financial efficiency of the business
REVENUES✅
•2013: $0.91B
•2023: $2.53B
•CAGR: 10.76%
FREE CASH FLOW✅
•2013: $280.93M
•2023: $1.21B
•CAGR: 15.75%
NORMALIZED EPS✅
•2013: $2.16
•2023: $13.52
•CAGR: 20.13%
SHARE BUYBACKS✅
•2013 Shares Outstanding: 121.07M
•LTM Shares Outstanding: 79.84M
By reducing its shares outstanding 34%, $MSCI increased its EPS by 51% (assuming 0 growth)
MARGINS✅
•LTM Gross Margins: 82.3%
•LTM Operating Margins: 54.8%
•LTM Net Income Margins: 45.4%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~7% LESS in EPS & ~13% LESS in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $MSCI has to grow earnings at an 18.63% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2024 - 2026 EPS growth over the next few years to be less than the (18.63%) required growth rate:
2024E: $14.89 (10.1% YoY) *FY Dec
2025E: $17.05 (14.5% YoY)
2026E: $19.45 (14.1% YoY)
$MSCI has a great track record of meeting analyst estimates ~2 years out, but let’s assume $MSCI ends 2026 with $19.45 in EPS & see its CAGR potential assuming different multiples
34x P/E: $661.30💵 … ~8.9% CAGR
32x P/E: $622.40💵 … ~6.5% CAGR
30x P/E: $583.50💵 … ~4.0% CAGR
28x P/E: $544.60💵 … ~1.5% CAGR
As you can see, $MSCI appears to have attractive return potential if we assume >34x earnings, leaving us with no margin of safety
Given the multiple expansion over the last 10 years, deteriorating balance sheet, & a reduction in the growth rate, I’d demand greater value from $MSCI
I’d likely get more interested in $MSCI closer to $450💵 or at ~31x earnings (~16.5% below todays price)
#stocks #investing
___
𝐃𝐈𝐒𝐂𝐋𝐎𝐒𝐔𝐑𝐄‼️: 𝐓𝐡𝐢𝐬 𝐢𝐬 𝐍𝐎𝐓 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐀𝐝𝐯𝐢𝐜𝐞. 𝐁𝐚𝐛𝐲𝐥𝐨𝐧 𝐂𝐚𝐩𝐢𝐭𝐚𝐥® 𝐚𝐧𝐝 𝐢𝐭𝐬 𝐫𝐞𝐩𝐫𝐞𝐬𝐞𝐧𝐭𝐚𝐭𝐢𝐯𝐞𝐬 𝐦𝐚𝐲 𝐡𝐚𝐯𝐞 𝐩𝐨𝐬𝐢𝐭𝐢𝐨𝐧𝐬 𝐢𝐧 𝐭𝐡𝐞 𝐬𝐞𝐜𝐮𝐫𝐢𝐭𝐢𝐞𝐬 𝐝𝐢𝐬𝐜𝐮𝐬𝐬𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭.
𝐓𝐡𝐞 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐜𝐨𝐧𝐭𝐚𝐢𝐧𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭 𝐢𝐬 𝐢𝐧𝐭𝐞𝐧𝐝𝐞𝐝 𝐟𝐨𝐫 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐩𝐮𝐫𝐩𝐨𝐬𝐞𝐬 𝐨𝐧𝐥𝐲 𝐚𝐧𝐝 𝐬𝐡𝐨𝐮𝐥𝐝 𝐧𝐨𝐭 𝐛𝐞 𝐜𝐨𝐧𝐬𝐭𝐫𝐮𝐞𝐝 𝐚𝐬 𝐢𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐚𝐝𝐯𝐢𝐜𝐞 𝐭𝐨 𝐦𝐞𝐞𝐭 𝐭𝐡𝐞 𝐬𝐩𝐞𝐜𝐢𝐟𝐢𝐜 𝐧𝐞𝐞𝐝𝐬 𝐨𝐟 𝐚𝐧𝐲 𝐢𝐧𝐝𝐢𝐯𝐢𝐝𝐮𝐚𝐥 𝐨𝐫 𝐬𝐢𝐭𝐮𝐚𝐭𝐢𝐨𝐧. 𝐏𝐚𝐬𝐭 𝐩𝐞𝐫𝐟𝐨𝐫𝐦𝐚𝐧𝐜𝐞 𝐢𝐬 𝐧𝐨 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞 𝐨𝐟 𝐟𝐮𝐭𝐮𝐫𝐞 𝐫𝐞𝐬𝐮𝐥𝐭𝐬.
𝐈𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐜𝐨𝐧𝐭𝐚𝐢𝐧𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭 𝐡𝐚𝐬 𝐛𝐞𝐞𝐧 𝐨𝐛𝐭𝐚𝐢𝐧𝐞𝐝 𝐟𝐫𝐨𝐦 𝐬𝐨𝐮𝐫𝐜𝐞𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞𝐝 𝐭𝐨 𝐛𝐞 𝐫𝐞𝐥𝐢𝐚𝐛𝐥𝐞, 𝐛𝐮𝐭 𝐢𝐬 𝐧𝐨𝐭 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞𝐝 𝐚𝐬 𝐭𝐨 𝐜𝐨𝐦𝐩𝐥𝐞𝐭𝐞𝐧𝐞𝐬𝐬 𝐨𝐫 𝐚𝐜𝐜𝐮𝐫𝐚𝐜𝐲.
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RT @DimitryNakhla: A sober valuation analysis on $MSCI 🧘🏽♂️
•NTM P/E Ratio: 37.26x
•10-Year Mean: 34.88x
•NTM FCF Yield: 2.94%
•10-Year Mean: 3.39%
As you can see, $MSCI appears to be trading above fair value
Going forward, investors can receive ~7% LESS in earnings per share & ~13% LESS in FCF per share 🧠***
Before we get into valuation, let’s take a look at why $MSCI is a good business
BALANCE SHEET🆗
•Cash & Short-Term Inv: $457.82M
•Long-Term Debt: $4.49B
$MSCI has an ok balance sheet, a BBB- S&P Credit Rating, & 6.62x FFO Interest Coverate
RETURN ON CAPITAL✅
•2019: 23.4%
•2020: 28.6%
•2021: 26.5%
•2022: 33.0%
•2023: 35.2%
RETURN ON EQUITY🆗
•2019: (463.5%)
•2020: (231.5%)
•2021: (239.3%)
•2022: (148.6%)
•2023: (131.4%)
*ROE negative due to heavy use of debt
$MSCI has strong return metrics, highlighting the financial efficiency of the business
REVENUES✅
•2013: $0.91B
•2023: $2.53B
•CAGR: 10.76%
FREE CASH FLOW✅
•2013: $280.93M
•2023: $1.21B
•CAGR: 15.75%
NORMALIZED EPS✅
•2013: $2.16
•2023: $13.52
•CAGR: 20.13%
SHARE BUYBACKS✅
•2013 Shares Outstanding: 121.07M
•LTM Shares Outstanding: 79.84M
By reducing its shares outstanding 34%, $MSCI increased its EPS by 51% (assuming 0 growth)
MARGINS✅
•LTM Gross Margins: 82.3%
•LTM Operating Margins: 54.8%
•LTM Net Income Margins: 45.4%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~7% LESS in EPS & ~13% LESS in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $MSCI has to grow earnings at an 18.63% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2024 - 2026 EPS growth over the next few years to be less than the (18.63%) required growth rate:
2024E: $14.89 (10.1% YoY) *FY Dec
2025E: $17.05 (14.5% YoY)
2026E: $19.45 (14.1% YoY)
$MSCI has a great track record of meeting analyst estimates ~2 years out, but let’s assume $MSCI ends 2026 with $19.45 in EPS & see its CAGR potential assuming different multiples
34x P/E: $661.30💵 … ~8.9% CAGR
32x P/E: $622.40💵 … ~6.5% CAGR
30x P/E: $583.50💵 … ~4.0% CAGR
28x P/E: $544.60💵 … ~1.5% CAGR
As you can see, $MSCI appears to have attractive return potential if we assume >34x earnings, leaving us with no margin of safety
Given the multiple expansion over the last 10 years, deteriorating balance sheet, & a reduction in the growth rate, I’d demand greater value from $MSCI
I’d likely get more interested in $MSCI closer to $450💵 or at ~31x earnings (~16.5% below todays price)
#stocks #investing
___
𝐃𝐈𝐒𝐂𝐋𝐎𝐒𝐔𝐑𝐄‼️: 𝐓𝐡𝐢𝐬 𝐢𝐬 𝐍𝐎𝐓 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐀𝐝𝐯𝐢𝐜𝐞. 𝐁𝐚𝐛𝐲𝐥𝐨𝐧 𝐂𝐚𝐩𝐢𝐭𝐚𝐥® 𝐚𝐧𝐝 𝐢𝐭𝐬 𝐫𝐞𝐩𝐫𝐞𝐬𝐞𝐧𝐭𝐚𝐭𝐢𝐯𝐞𝐬 𝐦𝐚𝐲 𝐡𝐚𝐯𝐞 𝐩𝐨𝐬𝐢𝐭𝐢𝐨𝐧𝐬 𝐢𝐧 𝐭𝐡𝐞 𝐬𝐞𝐜𝐮𝐫𝐢𝐭𝐢𝐞𝐬 𝐝𝐢𝐬𝐜𝐮𝐬𝐬𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭.
𝐓𝐡𝐞 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐜𝐨𝐧𝐭𝐚𝐢𝐧𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭 𝐢𝐬 𝐢𝐧𝐭𝐞𝐧𝐝𝐞𝐝 𝐟𝐨𝐫 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐩𝐮𝐫𝐩𝐨𝐬𝐞𝐬 𝐨𝐧𝐥𝐲 𝐚𝐧𝐝 𝐬𝐡𝐨𝐮𝐥𝐝 𝐧𝐨𝐭 𝐛𝐞 𝐜𝐨𝐧𝐬𝐭𝐫𝐮𝐞𝐝 𝐚𝐬 𝐢𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐚𝐝𝐯𝐢𝐜𝐞 𝐭𝐨 𝐦𝐞𝐞𝐭 𝐭𝐡𝐞 𝐬𝐩𝐞𝐜𝐢𝐟𝐢𝐜 𝐧𝐞𝐞𝐝𝐬 𝐨𝐟 𝐚𝐧𝐲 𝐢𝐧𝐝𝐢𝐯𝐢𝐝𝐮𝐚𝐥 𝐨𝐫 𝐬𝐢𝐭𝐮𝐚𝐭𝐢𝐨𝐧. 𝐏𝐚𝐬𝐭 𝐩𝐞𝐫𝐟𝐨𝐫𝐦𝐚𝐧𝐜𝐞 𝐢𝐬 𝐧𝐨 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞 𝐨𝐟 𝐟𝐮𝐭𝐮𝐫𝐞 𝐫𝐞𝐬𝐮𝐥𝐭𝐬.
𝐈𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐜𝐨𝐧𝐭𝐚𝐢𝐧𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭 𝐡𝐚𝐬 𝐛𝐞𝐞𝐧 𝐨𝐛𝐭𝐚𝐢𝐧𝐞𝐝 𝐟𝐫𝐨𝐦 𝐬𝐨𝐮𝐫𝐜𝐞𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞𝐝 𝐭𝐨 𝐛𝐞 𝐫𝐞𝐥𝐢𝐚𝐛𝐥𝐞, 𝐛𝐮𝐭 𝐢𝐬 𝐧𝐨𝐭 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞𝐝 𝐚𝐬 𝐭𝐨 𝐜𝐨𝐦𝐩𝐥𝐞𝐭𝐞𝐧𝐞𝐬𝐬 𝐨𝐫 𝐚𝐜𝐜𝐮𝐫𝐚𝐜𝐲.
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Giuliano
Sharing economies of scale with the customer.
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Sharing economies of scale with the customer.
You can now subscribe to FSD (Supervised) for $99/month in the US
https://t.co/0IwC9GC0aF
Upgrades > Software Upgrades > Subscribe tweet
X (formerly Twitter)
Tesla (@Tesla) on X
You can now subscribe to FSD (Supervised) for $99/month in the US
https://t.co/0IwC9GC0aF
Upgrades > Software Upgrades > Subscribe
https://t.co/0IwC9GC0aF
Upgrades > Software Upgrades > Subscribe
Antonio Linares
RT @NameGeneric55: @alc2022 I’m doing exactly that. Taken a break from work and embedding LLMs/GANs in different applications. Reading on architecture. Attention is all you need. Wink wink
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RT @NameGeneric55: @alc2022 I’m doing exactly that. Taken a break from work and embedding LLMs/GANs in different applications. Reading on architecture. Attention is all you need. Wink wink
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Antonio Linares
I think $AMD's stock will climb to over $600 per share, driven by a product roadmap that is widely misunderstood.
Right now, the tech world is all about AI, mostly selling GPUs. But AMD has a special advantage because all parts of its business help spread its main AI tech.
This smart way of using its business to push AI will likely boost AMD's financial results in the coming years.
AI isn't just in GPUs anymore; it's expected to spread to different tech like smartphones, PCs, cars, and home appliances over the next decade.
AMD knows a lot about chiplet technology, which means it can add AI features across all its products.
In the long run, this strategy could work out better than just trying to beat NVDA in the GPU market, where AMD is already a strong competitor.
By developing GPUs with chiplets that perform well and improving its ROCm software, AMD might take some of $NVDA's market share.
Using this technology across its various business areas should also help AMD succeed more broadly.
The benefits of taking market share from $NVDA are big, including the chance for $AMD to become a top supplier of AI-powered PCs.
Also, $AMD can chase these opportunities without much extra cost because its chiplet design works well across different products.
With its strong presence in the PC market already, $AMD is ready to use its AI tech in personal computing, even if it doesn't surpass $NVDA in GPU sales.
This move into AI by $AMD is a clever, asymmetric strategy.
Looking ahead, personalized computing is becoming a big trend. Companies will want custom tech solutions, and $AMD is well-prepared to meet these needs.
While rivals like $INTC and $NVDA are dabbling with chiplets to compete in AI and offer personalized tech, AMD has a head start, giving it an edge.
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I think $AMD's stock will climb to over $600 per share, driven by a product roadmap that is widely misunderstood.
Right now, the tech world is all about AI, mostly selling GPUs. But AMD has a special advantage because all parts of its business help spread its main AI tech.
This smart way of using its business to push AI will likely boost AMD's financial results in the coming years.
AI isn't just in GPUs anymore; it's expected to spread to different tech like smartphones, PCs, cars, and home appliances over the next decade.
AMD knows a lot about chiplet technology, which means it can add AI features across all its products.
In the long run, this strategy could work out better than just trying to beat NVDA in the GPU market, where AMD is already a strong competitor.
By developing GPUs with chiplets that perform well and improving its ROCm software, AMD might take some of $NVDA's market share.
Using this technology across its various business areas should also help AMD succeed more broadly.
The benefits of taking market share from $NVDA are big, including the chance for $AMD to become a top supplier of AI-powered PCs.
Also, $AMD can chase these opportunities without much extra cost because its chiplet design works well across different products.
With its strong presence in the PC market already, $AMD is ready to use its AI tech in personal computing, even if it doesn't surpass $NVDA in GPU sales.
This move into AI by $AMD is a clever, asymmetric strategy.
Looking ahead, personalized computing is becoming a big trend. Companies will want custom tech solutions, and $AMD is well-prepared to meet these needs.
While rivals like $INTC and $NVDA are dabbling with chiplets to compete in AI and offer personalized tech, AMD has a head start, giving it an edge.
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Offshore
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Antonio Linares
$CRWD is one of the companies that is best positioned to benefit from the rise of AI.
As it continues harvesting more data, it will be exponentially harder for competitors to catch up.
$CRWD's moat is getting stronger every quarter, driven by the following dynamics:
1. Market-leading software efficiency: Their software boasts the lightest footprint, facilitating easy installation and operation. This accessibility attracts more customers, thereby enhancing their data pool for further analysis.
2. Consolidated data framework: They integrate all data into a singular model, simplifying the process of obtaining a comprehensive view of the security environment and enabling efficient AI training with this unified data.
3. Low incremental cost of expansion: Their efficient data architecture streamlines the training and deployment of new AI models, allowing $CRWD to introduce new features at minimal additional cost.
4. Reinforcing growth cycle: The introduction of new features not only attracts additional customers but also enriches the data reservoir, enhances AI capabilities, and leads to the development of even more advanced modules. This cycle fosters a substantial increase in cash generation over time.
5. Scale economies in cash generation: As the adoption of various modules increases, $CRWD's cash generation capability significantly escalates with minimal additional input. Each new module fortifies their strategic position, thereby amplifying cash flow.
Observe the trajectory of $CRWD's cash from operations over time 👇
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$CRWD is one of the companies that is best positioned to benefit from the rise of AI.
As it continues harvesting more data, it will be exponentially harder for competitors to catch up.
$CRWD's moat is getting stronger every quarter, driven by the following dynamics:
1. Market-leading software efficiency: Their software boasts the lightest footprint, facilitating easy installation and operation. This accessibility attracts more customers, thereby enhancing their data pool for further analysis.
2. Consolidated data framework: They integrate all data into a singular model, simplifying the process of obtaining a comprehensive view of the security environment and enabling efficient AI training with this unified data.
3. Low incremental cost of expansion: Their efficient data architecture streamlines the training and deployment of new AI models, allowing $CRWD to introduce new features at minimal additional cost.
4. Reinforcing growth cycle: The introduction of new features not only attracts additional customers but also enriches the data reservoir, enhances AI capabilities, and leads to the development of even more advanced modules. This cycle fosters a substantial increase in cash generation over time.
5. Scale economies in cash generation: As the adoption of various modules increases, $CRWD's cash generation capability significantly escalates with minimal additional input. Each new module fortifies their strategic position, thereby amplifying cash flow.
Observe the trajectory of $CRWD's cash from operations over time 👇
tweet
Hidden Value Gems
A good read on the growth of Universal Park themes at $CMCSA and its challenge to $DIS
🧵👇
✅ “A common vacation itinerary includes three or four days at Disney World and one or two days at Universal. If Universal can now persuade families to spend one more day at its parks instead of at Disney, it could nab hundreds of millions of dollars in annual revenue.”
1/5
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A good read on the growth of Universal Park themes at $CMCSA and its challenge to $DIS
🧵👇
✅ “A common vacation itinerary includes three or four days at Disney World and one or two days at Universal. If Universal can now persuade families to spend one more day at its parks instead of at Disney, it could nab hundreds of millions of dollars in annual revenue.”
1/5
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Offshore
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Daniel
Buffett, Munger, and countless other Superinvestos consider Investor's Psychology a Top 3 factor for Success.
Here are the 7 Best Psychology Books:
1. Thinking, Fast and Slow
The most comprehensive book I've ever read on psychology by Nobel Prize winner Daniel Kahneman. https://t.co/maM2bBJGR6
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Buffett, Munger, and countless other Superinvestos consider Investor's Psychology a Top 3 factor for Success.
Here are the 7 Best Psychology Books:
1. Thinking, Fast and Slow
The most comprehensive book I've ever read on psychology by Nobel Prize winner Daniel Kahneman. https://t.co/maM2bBJGR6
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Offshore
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The Long Investor
$ETH this is the chart you bookmark. https://t.co/I8dg2pY59K
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$ETH this is the chart you bookmark. https://t.co/I8dg2pY59K
$ETH sometimes the coincidental alignments are too beautiful to ignore.
The breadth of the Cup aligns perfectly with the 1.618 Fib, which is always our Wave 3 target.
$8814 is the target of Wave 3. https://t.co/xABzwehb2r tweet