Offshore
Photo
Hidden Value Gems
Tips from the legendary Walter Schloss on investing 👇
Quote of the day #69 https://t.co/IZs5rikyfa
tweet
Tips from the legendary Walter Schloss on investing 👇
Quote of the day #69 https://t.co/IZs5rikyfa
tweet
Offshore
Photo
Invest In Assets 📈
RT @InvestInAssets: Visa Business Breakdown $V 💳
Operational
- ROIC: 30%
- Gross Margin: 80%
- Operating Margin: 67%
- FCF/Net Income: 113%
Growth (5Y CAGR)
- Rev: 9.8%
- Op. Income: 10%
- EPS: 20.1%
Valuation
- Fwd. PE: 30
- EV/EBITDA: 26
- FCF Yield: 3.8%
Let's take a look 👇🧵 https://t.co/Gzrn4S30PO
tweet
RT @InvestInAssets: Visa Business Breakdown $V 💳
Operational
- ROIC: 30%
- Gross Margin: 80%
- Operating Margin: 67%
- FCF/Net Income: 113%
Growth (5Y CAGR)
- Rev: 9.8%
- Op. Income: 10%
- EPS: 20.1%
Valuation
- Fwd. PE: 30
- EV/EBITDA: 26
- FCF Yield: 3.8%
Let's take a look 👇🧵 https://t.co/Gzrn4S30PO
tweet
Offshore
Photo
Stock Analysis Compilation
CL Capital on Hostelworld $HSW LN
Thesis: Hostelworld's innovative social features and strong market position make it a compelling play on the growing online hostel booking market
(Extract from their Q2 letter) https://t.co/PVh1MhReBt
tweet
CL Capital on Hostelworld $HSW LN
Thesis: Hostelworld's innovative social features and strong market position make it a compelling play on the growing online hostel booking market
(Extract from their Q2 letter) https://t.co/PVh1MhReBt
tweet
Offshore
Photo
Hidden Value Gems
RT @HiddenValueGems: Enjoyed the interview with @JohnArnoldFndtn who achieved ~100% compound annual
return over 12 years and retired at 38 as a billionaire.
✅ “The market is usually right, but success in investing often comes from the confidence to believe when it’s wrong.”
✅ "Investing requires the balance of confidence to challenge the market and the humility to accept when you’re wrong."
✅ "In investing, the rarest skill is not just finding opportunities but knowing when you’ve made a mistake."
✅ "Success in investing isn’t about always being right; it’s about knowing when you need to rethink your strategy."
✅ “There's this phrase that fear and greed determine markets, and those are two very strong emotions. I've seen traders who either because of fear or greed, they change their pattern, they change their process. And so, for better or worse, I think I'm classified by being able to be detached from my emotions.”
✅ “The amount of infrastructure that's required to run the data centers for AI is immense. The industry is under a real challenge. It's putting tremendous challenge upon the utility industry.”
tweet
RT @HiddenValueGems: Enjoyed the interview with @JohnArnoldFndtn who achieved ~100% compound annual
return over 12 years and retired at 38 as a billionaire.
✅ “The market is usually right, but success in investing often comes from the confidence to believe when it’s wrong.”
✅ "Investing requires the balance of confidence to challenge the market and the humility to accept when you’re wrong."
✅ "In investing, the rarest skill is not just finding opportunities but knowing when you’ve made a mistake."
✅ "Success in investing isn’t about always being right; it’s about knowing when you need to rethink your strategy."
✅ “There's this phrase that fear and greed determine markets, and those are two very strong emotions. I've seen traders who either because of fear or greed, they change their pattern, they change their process. And so, for better or worse, I think I'm classified by being able to be detached from my emotions.”
✅ “The amount of infrastructure that's required to run the data centers for AI is immense. The industry is under a real challenge. It's putting tremendous challenge upon the utility industry.”
tweet
Offshore
Photo
Matt McGarry
The ads that drive <$2 cpas aren't creative at all.
in fact, the entire process is data-driven.
let me explain: https://t.co/ng1lfdsjcz
tweet
The ads that drive <$2 cpas aren't creative at all.
in fact, the entire process is data-driven.
let me explain: https://t.co/ng1lfdsjcz
tweet
Offshore
Photo
Stock Analysis Compilation
Heartland Advisors on Hexcel $HXL US
Thesis: Hexcel is well-positioned for a long-term recovery, with a focus on defense diversification and wide-body aircrafts, and shares are attractively priced for investors
(Extract from their Q2 letter) https://t.co/O4Mbz36dCo
tweet
Heartland Advisors on Hexcel $HXL US
Thesis: Hexcel is well-positioned for a long-term recovery, with a focus on defense diversification and wide-body aircrafts, and shares are attractively priced for investors
(Extract from their Q2 letter) https://t.co/O4Mbz36dCo
tweet
Offshore
Photo
App Economy Insights
What's Uber's big autonomy plan?
In today's coverage:
🚖 $UBER vs. $TSLA Robotaxis.
💰 What unit economics to expect?
📊 BONUS: $DIDIY and $GRAB visualized.
https://t.co/NLuSRJ5LqQ
tweet
What's Uber's big autonomy plan?
In today's coverage:
🚖 $UBER vs. $TSLA Robotaxis.
💰 What unit economics to expect?
📊 BONUS: $DIDIY and $GRAB visualized.
https://t.co/NLuSRJ5LqQ
tweet
Offshore
Photo
Musings on Markets
The Corporate Life Cycle: Managing, Valuation and Investing Implications
As I reveal my ignorance about TikTok trends, social media celebrities and Gen Z slang, my children are quick to point out my age, and I accept that reality, for the most part. I understand that I am too old to exercise without stretching first or eat a heaping plate of cheese fries and not suffer heartburn, but that does not stop me from trying occasionally. For the last decade or so, I have argued that businesses, like human beings, age, and struggle with aging, and that much of the dysfunction we observe in their decision making stems from refusing to act their age. In fact, the business life cycle has become an integral part of the corporate finance, valuation and investing classes that I teach, and in many of the posts that I have written on this blog. In 2022, I decided that I had hit critical mass, in terms of corporate life cycle content, and that the material could be organized as a book. While the writing for the book was largely done by November 2022, publishing does have a long lead time, and the book, published by Penguin Random House, will be available on August 20, 2024, at a book shop near you. If you are concerned that you are going to be hit with a sales pitch for that book, far from it! Rather than try to part you from your money, I thought I would give a compressed version of the book in this post, and for most of you, that will suffice.
Setting the Stage
The notion of a business life cycle is neither new nor original, since versions of it have floated around in management circles for decades, but its applications in finance have been spotty, with some attempts to tie where a company is in the life cycle to its corporate governance and others to accounting ratios. In fact, and this should come as no surprise to anyone who is familiar with his work, the most incisive piece tying excess returns (return on invested capital minus cost of capital) to the corporate life cycle was penned by Michael Mauboussin (with Dan Callahan) just a few months ago.
My version of the corporate life cycle is built around six stages with the first stage being an idea business (a start-up) and the last one representing decline and demise.
<picturehttps://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F172072c0-193f-42e9-b98e-3d8c3a9bbd9b_1422x1540.heic
<svg<polyline<polyline<line<line
As you can see, the key tasks shift as business age, from building business models in the high growth phase to scaling up the business in high growth to defending against competition in the mature phase to managing decline int he last phase. Not surprisingly, the operating metrics change as companies age, with high revenue growth accompanied by big losses (from work-in-progress business models) and large reinvestment needs (to delivery future growth) in early-stage companies to large profits and free cash flows in the mature phase to stresses on growth and margins in decline. Consequently, in terms of cash flows, young companies burn through cash, with the burn increasing with potential, cash buildup is common as companies mature followed by cash return, as the realization kicks in that a company’s high growth days are in the past.
As companies move through the life cycle, they will hit transition points in operations and in capital raising that have to be navigated, with high failure rates at each transition. Thus, most idea businesses[...]
The Corporate Life Cycle: Managing, Valuation and Investing Implications
As I reveal my ignorance about TikTok trends, social media celebrities and Gen Z slang, my children are quick to point out my age, and I accept that reality, for the most part. I understand that I am too old to exercise without stretching first or eat a heaping plate of cheese fries and not suffer heartburn, but that does not stop me from trying occasionally. For the last decade or so, I have argued that businesses, like human beings, age, and struggle with aging, and that much of the dysfunction we observe in their decision making stems from refusing to act their age. In fact, the business life cycle has become an integral part of the corporate finance, valuation and investing classes that I teach, and in many of the posts that I have written on this blog. In 2022, I decided that I had hit critical mass, in terms of corporate life cycle content, and that the material could be organized as a book. While the writing for the book was largely done by November 2022, publishing does have a long lead time, and the book, published by Penguin Random House, will be available on August 20, 2024, at a book shop near you. If you are concerned that you are going to be hit with a sales pitch for that book, far from it! Rather than try to part you from your money, I thought I would give a compressed version of the book in this post, and for most of you, that will suffice.
Setting the Stage
The notion of a business life cycle is neither new nor original, since versions of it have floated around in management circles for decades, but its applications in finance have been spotty, with some attempts to tie where a company is in the life cycle to its corporate governance and others to accounting ratios. In fact, and this should come as no surprise to anyone who is familiar with his work, the most incisive piece tying excess returns (return on invested capital minus cost of capital) to the corporate life cycle was penned by Michael Mauboussin (with Dan Callahan) just a few months ago.
My version of the corporate life cycle is built around six stages with the first stage being an idea business (a start-up) and the last one representing decline and demise.
<picturehttps://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F172072c0-193f-42e9-b98e-3d8c3a9bbd9b_1422x1540.heic
<svg<polyline<polyline<line<line
As you can see, the key tasks shift as business age, from building business models in the high growth phase to scaling up the business in high growth to defending against competition in the mature phase to managing decline int he last phase. Not surprisingly, the operating metrics change as companies age, with high revenue growth accompanied by big losses (from work-in-progress business models) and large reinvestment needs (to delivery future growth) in early-stage companies to large profits and free cash flows in the mature phase to stresses on growth and margins in decline. Consequently, in terms of cash flows, young companies burn through cash, with the burn increasing with potential, cash buildup is common as companies mature followed by cash return, as the realization kicks in that a company’s high growth days are in the past.
As companies move through the life cycle, they will hit transition points in operations and in capital raising that have to be navigated, with high failure rates at each transition. Thus, most idea businesses[...]