⁠Investing visuals
How much cash do you currently hold in your portfolio?💰 https://t.co/6tzLrFaaD2
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⁠Stock Analysis Compilation
Blue Tower AM on Wesco International $WCC US

Thesis: Wesco’s strong positioning in electrical equipment distribution, supported by surging demand from EVs, solar, and data centers, offers substantial growth opportunities.

(Extract from their Q3 letter) https://t.co/QqwPk7ynCX
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⁠Dimitry Nakhla | Babylon Capital®
“The chief losses to investors come from the purchase of low quality securities at times of favorable business conditions.”

— Benjamin Graham🗣️

#stocks #investing

One of my favorite investing quotes, not uncommon for people to rationalize why a lower quality stock is a “great buy” during a hot stock market … more on this 👇🏽"

Attention investors ‼️ — I am SURE this post will sharpen your investing mindset and skills. Take a couple minutes to read it in full - it'll be a game-changer for your investment journey.

Yesterday I shared a poll asking if you thought $BMY was undervalued or a value trap, given its 17.32% FCF Yield.

Before I share my opinion, I believe it’s CRITICAL to emphasize the importance of being selective when building a portfolio.

Imagine you were the manager of a fútbol club (in this case Liverpool FC 😉) and you have to choose your Starting XI.

Would you add $BMY? .. More on this later.

You can see my Starting XI in the photo below.

It’s a club of exceptional businesses that have wide moats, pristine balance sheets, excellent returns on invested capital and quality revenues & earnings.

$BMY on the other hand doesn’t really fit in this club as it fails to meet these standards.

Another way to demonstrate this is if you were building a fútbol club & you could choose ANY footballer, I’m sure your club may look something like this:

Cristiano Ronaldo, Lionel Messi, Kylian Mbappe, Vinicius Jr, Jude Bellingham, Alison Becker, Virgil Van Dyke, David Alaba, Kyle Walker, Trent Alexander Arnold, & Ilkay Gundogan.

INVESTING IS NO DIFFERENT.

You have the opportunity to build a SUPERTEAM of quality businesses & nobody is forcing you to buy “subpar players” for your club.

As Warren Buffett even said:

“I could improve your ultimate financial welfare by giving you a ticket with only 20 slots in it so that you had 20 punches—representing all the investments that you got to make in a lifetime.”

The mistake MANY investors make is NOT being SELECTIVE enough.

Why add a subpar player to your squad when you could buy Ronaldo?

You’ll become a better investor and enhance your financial welfare by focusing on buying the world’s BEST & MOST QUALITY business when they trade at a fair or better valuation. This should be your focus.

Do not let the daily noise of the market sway you into buying a subpar company just because it trades for a low multiple.

So this brings us to $BMY.

Although $BMY may “appear” undervalued due to its low multiple & high FCF Yield, it could be a value trap and does not belong in my “superteam” of companies.

In short, it lacks many of the qualities I mentioned for the other businesses & has a poor history of performance.

Just have a look at the long-term growth of $BMY Revenues, EPS, & Balance Sheet and you’ll be very unimpressed.

Sure, $BMY may “have moments of excellence” (as any footballer may have in the occasional game) with nice rallies off its lows, but this doesn’t make $BMY a consistent performer for my club.

Yes, it’s important to consider the future when investing (which isn’t even bright for $BMY at the moment). However, it doesn’t mean we should forget about the poor performances $BMY has had over the last 15 years.

I wouldn’t want to count on a player who’s been performing poorly over 15 seasons and hope that this player will finally show me moments of consistent brilliance for the next 5 seasons.

Also, we should to be wise and consider the opportunity cost of owning subpar businesses over excellent businesses over the years.

I am sure there are many investors who have owned $BMY for the last ~5 years in hopes that $BMY would eventually see it supposed “value” realized.

Meanwhile, the same investors would have [...]

been better off, owning more shares of companies like $V $MA $GOOG $META $ASML $LRCX $NVDA $MSFT $CRM $VRTX $TMO $AAPL etc.

This was my Achilles Heel when I first started my investment journey in 2016. I was TOO focused on valuation & lower multiples rather than QUALITY & growth at a reasonable price.

So when you’re building your club of equities, don’t buy a bench player in place of Lionel Messi or Cristiano Ronaldo. You’d just be downgrading your team & winning less.

If you made it this far, hope this helped!

Feel free to share your starting XI 😉

#stocks #investing "- Dimitry Nakhla | Babylon Capital®
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⁠Startup Archive
RT @shrihacker: the unconventional advice here is that your first hires should be 'magnets'

i've rarely come across this.

seems like usually founders end up being the face of their company and you dont know who the first 10 engs are but in this case they would be the celebrities

Vinod Khosla and Sam Altman on how much equity to give your first 10 employees

In the early days of Sun Microsystems, Vinod Khosla recruited some of the best engineers in the world: Andy Bechtolsheim, Bill Joy, and Eric Schmidt.

Sam Altman asks Vinod how he convinced these people to join him when Sun was just a small startup.

Vinod replies:

“I see this as a major problem nowadays. People aren’t allocating equity widely enough. I think among the first three or four founders at Sun, we kept less than half of the common. The total was something like 25-27% for the founders, an equal or slightly larger chunk for everybody else we would hire, and then investors had like 40% after the A round. In retrospect, that was a very good idea.”

When his son Neil founded the AI startup Curai Health, Vinod advised him to keep only 15% of the company rather than 45% and try to hire one or two people at 15%. Then he advised him to leave 30% of the pool for non-founders.

Vinod explains his reasoning:

“Even though they’re coming in later and they didn’t come up with the idea, they will be incredible resources, especially as magnets to attract other people. If you believe a company becomes the people it hires, then your task becomes attracting the best people, and selling depends on magnets.”

This what Vinod did with Bill Joy. Vinod gave Bill half his equity even though Bill joined later:

“Bill Joy was an incredible magnet. People wanted to work with Bill and Andy. And even if Bill didn’t do a day of work, he was more than worth it because he helped attract Eric Schmidt. I don’t think Eric would have come work for me as a 25 year old.”

Sam Altman agrees on Vinod’s philosophy of maximizing the size of the pie rather than your ownership percentage:

“I think this is the most important piece of advice we’ve talked about among many important things today. Being super generous with early employee equity and getting founder-quality people in the first 10 employees—I think all the evidence is on the side of doing this, and yet almost no one does. So there’s a huge edge if you’re willing to do it.”

Vinod argues it’s the “single-most important thing to do in the first six months of a company.” The best people can start their own companies. If you want them to join your company, you have to be generous with equity.

Video source: @ycombinator (2019) - Startup Archive
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⁠Investing visuals
Lately, I’ve been adding to $ASML, which is down nearly 40% from its July peak.

With its dominant market position and growth outlook, the risk/reward is quite compelling in my opinion.

What’s your take on $ASML? https://t.co/fhxWtZJqYo
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⁠Stock Analysis Compilation
Greenhaven Road Capital on Sable Offshore Corporation $SOC US

Thesis: Sable Offshore offers a high-upside play with robust insider alignment, low-cost production, and potential for massive cash flow if oil production restarts

(Extract from their Q3 letter) https://t.co/HnUxegB77q
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⁠Stock Analysis Compilation
Wasatch GI on Ensign Group $ENSG US

Thesis: Ensign’s strong operational model and proven track record of turning around underperforming facilities make it a standout performer in the health-care management space

(Extract from their Q3 letter) https://t.co/pbmYlW5dLm
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⁠Quiver Quantitative
RT @InsiderRadar: We reported on 5 new significant insider purchases this week.

So far, each stock has beaten the market since our report:

$250K purchase of $TRS by CEO on 11/19. Since our report, the stock is up 5.5%.

$10M purchase of $EL by director on 11/19. Since our report, the stock is up 8.8%.

$100K purchase of $ARRY by CEO on 11/20. Since our report, the stock is up 5.5%.

$300K purchase of $ENPH by CEO on 11/20. Since our report, the stock is up 5.0%.

$450K purchase of $ONEW by CEO on 11/21. Since our report, the stock is up 6.0%.
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⁠Quiver Quantitative
RT @InsiderRadar: 🚨 JUST IN: New Insider Purchase

A director of $PBI has reported the purchase of ~$225k of the company's stock.

This is the first insider buy we have ever seen him make, and the first reported at the company in over 2 years
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⁠Quiver Quantitative
RT @InsiderRadar: 🚨 BREAKING: Kushner has just reported the purchase of ANOTHER $3M in $OSCR shares.

This is his 3rd reported insider purchase in the last 10 days. The stock is up 19% since his first purchase.

$OSCR stock is up another 11% today, now up 31% since our insider purchase report on the 14th. - Insider Radar
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⁠Stock Analysis Compilation
Wasatch GI on Japan Elevator Service $6544 JP

Thesis: Japan Elevator’s cost-effective services and market share gains position it well to capitalize on the growing need for elevator renewals in Japan

(Extract from their Q3 letter) https://t.co/mkB4PfcTDU
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⁠Stock Analysis Compilation
Clearbridge on National Grid $NG/ LN

Thesis: National Grid’s strong market position and increasing energy demand, coupled with its attractive valuation, offer significant long-term growth opportunities in a supportive regulatory landscape

(Extract from their Q3 letter) https://t.co/C8LjYBc3Eg
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