Offshore
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Finding Compounders
Here are some highlights from a Lou Simpson interview
He answers on the differences between him and Warren Buffett and the factors he looks for when he is worried an investment might blow up https://t.co/haGMSODq8S
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Here are some highlights from a Lou Simpson interview
He answers on the differences between him and Warren Buffett and the factors he looks for when he is worried an investment might blow up https://t.co/haGMSODq8S
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Offshore
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The Kobeissi Letter
BREAKING: The Atlanta Fed has once again revised their Q1 2025 GDP estimate to show -2.4% contraction.
Just one month ago, their estimate showed GDP growing by +3.9%. https://t.co/li6kAl2Swn
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BREAKING: The Atlanta Fed has once again revised their Q1 2025 GDP estimate to show -2.4% contraction.
Just one month ago, their estimate showed GDP growing by +3.9%. https://t.co/li6kAl2Swn
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Offshore
Photo
The Kobeissi Letter
Options activity is exploding on the trade war:
The S&P 500 ETF's, $SPY, put options volume spiked to 7.94 million contracts on Tuesday, the third-highest on record.
Volume has doubled since the trade war commenced.
At the same time, Nasdaq 100, $QQQ, put options volume hit the highest level in history, according to Goldman Sachs.
Interestingly, the previous 2 volume highs in 2022 and early 2023 were posted near short-term bottoms.
We are seeing historic levels of volatility and volume.
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Options activity is exploding on the trade war:
The S&P 500 ETF's, $SPY, put options volume spiked to 7.94 million contracts on Tuesday, the third-highest on record.
Volume has doubled since the trade war commenced.
At the same time, Nasdaq 100, $QQQ, put options volume hit the highest level in history, according to Goldman Sachs.
Interestingly, the previous 2 volume highs in 2022 and early 2023 were posted near short-term bottoms.
We are seeing historic levels of volatility and volume.
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Offshore
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The Investing for Beginners Podcast
Profit margins matter.
Why?
Because they can:
- Showcase efficiency
- Highlights strengths
- Enable comparisons
We can divide margins into for main categories: gross, operating, net, and free cash flow https://t.co/AEfGtuHNAz
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Profit margins matter.
Why?
Because they can:
- Showcase efficiency
- Highlights strengths
- Enable comparisons
We can divide margins into for main categories: gross, operating, net, and free cash flow https://t.co/AEfGtuHNAz
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Offshore
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Alvin
Get your Samsung Galaxy S25 Series here and save up to $1020 on your purchase. 👀
✅️ Galaxy S25: https://t.co/BvMPERu17L
✅️ Galaxy S25+: https://t.co/FtJIANio0i
✅️ Galaxy S25 Ultra: https://t.co/XYOQvERSpB
That also includes double storage upgrade for select models, an instant discount, and a trade-in cashback!
(SamsungPartner)
(US Only)
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Get your Samsung Galaxy S25 Series here and save up to $1020 on your purchase. 👀
✅️ Galaxy S25: https://t.co/BvMPERu17L
✅️ Galaxy S25+: https://t.co/FtJIANio0i
✅️ Galaxy S25 Ultra: https://t.co/XYOQvERSpB
That also includes double storage upgrade for select models, an instant discount, and a trade-in cashback!
(SamsungPartner)
(US Only)
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Offshore
Video
Investing visuals
Average up instead of average down.
Winners tend to keep winning. https://t.co/HEEYxaipD3
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Average up instead of average down.
Winners tend to keep winning. https://t.co/HEEYxaipD3
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Offshore
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Dimitry Nakhla | Babylon Capital®
A quality valuation analysis on $GOOG 🧘🏽♂️
•NTM P/E Ratio: 19.47x
•10-Year Mean: 23.70x
•NTM FCF Yield: 3.58%
•10-Year Mean: 4.17%
As you can see, $GOOG appears to be trading below fair value
Going forward, investors can receive ~22% MORE in earnings per share & ~14% LESS in FCF per share 🧠***
Before we get into valuation, let’s take a look at why $GOOG is a great business
BALANCE SHEET✅
•Cash & Short-Term Inv: $95.66B
•Long-Term Debt: $10.88B
$GOOG has a strong balance sheet, an AA+ S&P Credit Rating & 467x FFO Interest Coverage
RETURN ON CAPITAL✅
•2019: 16.4%
•2020: 16.2%
•2021: 27.6%
•2022: 26.1%
•2023: 26.9%
•2024: 32.3%
RETURN ON EQUITY✅
•2019: 18.1%
•2020: 19.0%
•2021: 32.1%
•2022: 23.6%
•2023: 27.4%
•2024: 32.9%
$GOOG has strong return metrics, highlighting the financial efficiency of the business
REVENUES✅
•2014: $66.00B
•2024: $350.02B
•CAGR: 18.15%
FREE CASH FLOW✅
•2014: $12.01B
•2024: $72.76B
•CAGR: 19.73%
NORMALIZED EPS✅
•2014: $1.28
•2024: $8.04
•CAGR: 20.17%
SHARE BUYBACKS✅
•2018 Shares Outstanding: 14.07B
•LTM Shares Outstanding: 12.45B
By reducing its shares outstanding ~11.5%, $GOOG increased its EPS by ~13% (assuming 0 growth)
MARGINS✅
•LTM Gross Margins: 58.2%
•LTM Operating Margins: 32.6%
•LTM Net Income Margins: 28.6%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~22% MORE in EPS & ~14% LESS in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $GOOG has to grow earnings at a 10.88% CAGR over the next several years to justify its valuation (LTM P/E 21.76x)
Today, analysts anticipate 2025 - 2027 EPS growth over the next few years to be more than the (10.88%) required growth rate:
2025E: $8.99 (11.8% YoY) *FY Dec
2026E: $10.24 (13.9% YoY)
2027E: $11.90 (16.2% YoY)
$GOOG has an excellent track record of meeting analyst estimates ~2 years out, but let’s assume $GOOG ends 2027 with $11.00 in EPS (7.5% below current 2027E) & see its CAGR potential assuming different multiples
24x P/E: $264💵 … ~16.3% CAGR
23x P/E: $253💵 … ~14.6% CAGR
22x P/E: $242💵 … ~12.8% CAGR
21x P/E: $231💵 … ~11.0% CAGR
20x P/E: $220💵 … ~9.1% CAGR
As you can see, $GOOG appears to have attractive return potential IF we assume >21 earnings (a multiple below its 5-year & 10-year mean while assuming a lower 2027E)
At >23x, $GOOG has aggressive CAGR potential & it’s not unreasonable for the business to even trade for ~24x (given its growth rate, moat, balance sheet, & exemplary capital allocation)
Today at $174💵 $GOOG appears to be a strong consideration for investment
Between cloud ☁️ , AI 🤖 , quantum computing ⚛️, $GOOG has a strong growth runway ahead, with the potential for continued margin expansion serving as an additional tailwind
$GOOGL
___
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 𝐜𝐨𝐦𝐩𝐥𝐞𝐭�[...]
A quality valuation analysis on $GOOG 🧘🏽♂️
•NTM P/E Ratio: 19.47x
•10-Year Mean: 23.70x
•NTM FCF Yield: 3.58%
•10-Year Mean: 4.17%
As you can see, $GOOG appears to be trading below fair value
Going forward, investors can receive ~22% MORE in earnings per share & ~14% LESS in FCF per share 🧠***
Before we get into valuation, let’s take a look at why $GOOG is a great business
BALANCE SHEET✅
•Cash & Short-Term Inv: $95.66B
•Long-Term Debt: $10.88B
$GOOG has a strong balance sheet, an AA+ S&P Credit Rating & 467x FFO Interest Coverage
RETURN ON CAPITAL✅
•2019: 16.4%
•2020: 16.2%
•2021: 27.6%
•2022: 26.1%
•2023: 26.9%
•2024: 32.3%
RETURN ON EQUITY✅
•2019: 18.1%
•2020: 19.0%
•2021: 32.1%
•2022: 23.6%
•2023: 27.4%
•2024: 32.9%
$GOOG has strong return metrics, highlighting the financial efficiency of the business
REVENUES✅
•2014: $66.00B
•2024: $350.02B
•CAGR: 18.15%
FREE CASH FLOW✅
•2014: $12.01B
•2024: $72.76B
•CAGR: 19.73%
NORMALIZED EPS✅
•2014: $1.28
•2024: $8.04
•CAGR: 20.17%
SHARE BUYBACKS✅
•2018 Shares Outstanding: 14.07B
•LTM Shares Outstanding: 12.45B
By reducing its shares outstanding ~11.5%, $GOOG increased its EPS by ~13% (assuming 0 growth)
MARGINS✅
•LTM Gross Margins: 58.2%
•LTM Operating Margins: 32.6%
•LTM Net Income Margins: 28.6%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~22% MORE in EPS & ~14% LESS in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $GOOG has to grow earnings at a 10.88% CAGR over the next several years to justify its valuation (LTM P/E 21.76x)
Today, analysts anticipate 2025 - 2027 EPS growth over the next few years to be more than the (10.88%) required growth rate:
2025E: $8.99 (11.8% YoY) *FY Dec
2026E: $10.24 (13.9% YoY)
2027E: $11.90 (16.2% YoY)
$GOOG has an excellent track record of meeting analyst estimates ~2 years out, but let’s assume $GOOG ends 2027 with $11.00 in EPS (7.5% below current 2027E) & see its CAGR potential assuming different multiples
24x P/E: $264💵 … ~16.3% CAGR
23x P/E: $253💵 … ~14.6% CAGR
22x P/E: $242💵 … ~12.8% CAGR
21x P/E: $231💵 … ~11.0% CAGR
20x P/E: $220💵 … ~9.1% CAGR
As you can see, $GOOG appears to have attractive return potential IF we assume >21 earnings (a multiple below its 5-year & 10-year mean while assuming a lower 2027E)
At >23x, $GOOG has aggressive CAGR potential & it’s not unreasonable for the business to even trade for ~24x (given its growth rate, moat, balance sheet, & exemplary capital allocation)
Today at $174💵 $GOOG appears to be a strong consideration for investment
Between cloud ☁️ , AI 🤖 , quantum computing ⚛️, $GOOG has a strong growth runway ahead, with the potential for continued margin expansion serving as an additional tailwind
$GOOGL
___
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 𝐜𝐨𝐦𝐩𝐥𝐞𝐭�[...]