Offshore
Photo
Dimitry Nakhla | Babylon Capital®
And of course a large part of the decline is clearly tied to the moat being questioned. But if an “apparent moat” is easily replicated, was it ever truly a moat to begin with?
Important things to think about when a stock trades at 100x, among other factors.
Growth is sexy… until it isn’t.
𝙏𝙝𝙚 𝙙𝙪𝙧𝙖𝙗𝙞𝙡𝙞𝙩𝙮 𝙤𝙛 𝙖 𝙘𝙤𝙢𝙥𝙖𝙣𝙮’𝙨 𝙢𝙤𝙖𝙩 𝙖𝙣𝙙 𝙩𝙝𝙚 𝙙𝙪𝙧𝙖𝙗𝙞𝙡𝙞𝙩𝙮 𝙤𝙛 𝙞𝙩𝙨 𝙜𝙧𝙤𝙬𝙩𝙝 𝙖𝙧𝙚 𝙬𝙝𝙖𝙩 𝙪𝙡𝙩𝙞𝙢𝙖𝙩𝙚𝙡𝙮 𝙢𝙖𝙩𝙩𝙚𝙧 𝙢𝙤𝙨𝙩, 𝙖𝙣𝙙 𝙩𝙝𝙚𝙮’𝙧𝙚 𝙩𝙝𝙚 𝙩𝙝𝙞𝙣𝙜𝙨 𝙩𝙝𝙖𝙩 𝙙𝙚𝙨𝙚𝙧𝙫𝙚 𝙩𝙝𝙚 𝙘𝙡𝙤𝙨𝙚𝙨𝙩 𝙨𝙘𝙧𝙪𝙩𝙞𝙣𝙮.
$MNDY
tweet
And of course a large part of the decline is clearly tied to the moat being questioned. But if an “apparent moat” is easily replicated, was it ever truly a moat to begin with?
Important things to think about when a stock trades at 100x, among other factors.
Growth is sexy… until it isn’t.
𝙏𝙝𝙚 𝙙𝙪𝙧𝙖𝙗𝙞𝙡𝙞𝙩𝙮 𝙤𝙛 𝙖 𝙘𝙤𝙢𝙥𝙖𝙣𝙮’𝙨 𝙢𝙤𝙖𝙩 𝙖𝙣𝙙 𝙩𝙝𝙚 𝙙𝙪𝙧𝙖𝙗𝙞𝙡𝙞𝙩𝙮 𝙤𝙛 𝙞𝙩𝙨 𝙜𝙧𝙤𝙬𝙩𝙝 𝙖𝙧𝙚 𝙬𝙝𝙖𝙩 𝙪𝙡𝙩𝙞𝙢𝙖𝙩𝙚𝙡𝙮 𝙢𝙖𝙩𝙩𝙚𝙧 𝙢𝙤𝙨𝙩, 𝙖𝙣𝙙 𝙩𝙝𝙚𝙮’𝙧𝙚 𝙩𝙝𝙚 𝙩𝙝𝙞𝙣𝙜𝙨 𝙩𝙝𝙖𝙩 𝙙𝙚𝙨𝙚𝙧𝙫𝙚 𝙩𝙝𝙚 𝙘𝙡𝙤𝙨𝙚𝙨𝙩 𝙨𝙘𝙧𝙪𝙩𝙞𝙣𝙮.
$MNDY
This is why you don’t pay 100x.
$MNDY traded ~100x in May 2024 — and the stock declined -68% since.
As Warren Buffett said: “A too-high purchase price… can undo the effects of a subsequent decade of favorable business developments.”
What margin of safety was there at 100x? https://t.co/ZrLWhjvBCb tweet
Offshore
Photo
Bourbon Capital
$MU CEO: AI is here in the very early days....memory and storage have become strategic assets for AI https://t.co/5zttPqrCIb
tweet
$MU CEO: AI is here in the very early days....memory and storage have become strategic assets for AI https://t.co/5zttPqrCIb
The semiconductor ecosystem:
The US dominates design and equipment: $AMAT $LRCX $KLAC $SNPS $CDNS $NVDA $AMD $QCOM $MU $AVGO
Europe dominates lithography: $ASML
South Korea dominates the RAM market: Samsung and SK Hynix
Taiwan produces the most advanced chips: $TSM https://t.co/AtoeBxKr1f tweet
Offshore
Photo
Dimitry Nakhla | Babylon Capital®
RT @DimitryNakhla: $TDG has entered in its own bear market, down -21% from its highs 🛩️
$TDG two core segments — Power & Control and Airframe — both generate >50% EBITDA margins, supported by highly engineered parts, sole-source positions, and a large installed base. https://t.co/WtWxPKOOk9
tweet
RT @DimitryNakhla: $TDG has entered in its own bear market, down -21% from its highs 🛩️
$TDG two core segments — Power & Control and Airframe — both generate >50% EBITDA margins, supported by highly engineered parts, sole-source positions, and a large installed base. https://t.co/WtWxPKOOk9
tweet
Offshore
Photo
Quiver Quantitative
JUST IN: The House will vote later this week on the SAVE America Act.
This would set nationwide photo ID requirements in federal elections. https://t.co/kYbcv2NcDt
tweet
JUST IN: The House will vote later this week on the SAVE America Act.
This would set nationwide photo ID requirements in federal elections. https://t.co/kYbcv2NcDt
tweet
Offshore
Photo
Benjamin Hernandez😎
High risk, high precision.
Volatile stocks make your month in a day if you have an exit plan. I provide live updates on momentum shifts on WhatsApp to protect gains.
Join the Action ✅ https://t.co/71FIJIdBXe
Master high-beta trading now.
$RKLB $OPEN $SOFI $PLTR $HOOD
tweet
High risk, high precision.
Volatile stocks make your month in a day if you have an exit plan. I provide live updates on momentum shifts on WhatsApp to protect gains.
Join the Action ✅ https://t.co/71FIJIdBXe
Master high-beta trading now.
$RKLB $OPEN $SOFI $PLTR $HOOD
⚡ The "Electronic Giant" Choice
Recommendation: $AXTI ~$28.20
AXT Inc. is a "Buy" rated powerhouse with a $1.56B valuation. Today's +17.19% rally is backed by a massive 6.97M shares traded.
Reason calling it: High institutional turnover at $28.20 suggests a long-term bottom. https://t.co/dGsp8x98EG tweet
Offshore
Photo
Michael Fritzell (Asian Century Stocks)
RT @Brad_Setser: Crazy export numbers out of Taiwan for January. Exports up ~ 70% y/y in dollar terms. A close to $20b monthly trade surplus ($18.9b). Looks a bit like a big oil price run up for an oil exporter ...
1/ https://t.co/2Z9WDLrD67
tweet
RT @Brad_Setser: Crazy export numbers out of Taiwan for January. Exports up ~ 70% y/y in dollar terms. A close to $20b monthly trade surplus ($18.9b). Looks a bit like a big oil price run up for an oil exporter ...
1/ https://t.co/2Z9WDLrD67
tweet
Dimitry Nakhla | Babylon Capital®
RT @DimitryNakhla: Haha thanks. I them every now & then.
Of course for every 98 that crash you may have 2 that end up like $NVDA & $PLTR (which are incredible businesses with jaw-dropping growth & wide moats with deep tech advantages).
Yet, as Pulak Prasad eloquently writes in 𝘞𝘩𝘢𝘵 𝘐 𝘓𝘦𝘢𝘳𝘯𝘦𝘥 𝘈𝘣𝘰𝘶𝘵 𝘐𝘯𝘷𝘦𝘴𝘵𝘪𝘯𝘨 𝘍𝘳𝘰𝘮 𝘋𝘢𝘳𝘸𝘪𝘯:
“But you would have missed Tesla! Yup. We would have. We eschew a very long list of risks. This is the core element of our investment strategy…
If you had listened to what we had to say about the business, you would not have invested. Your opportunity loss? Ten times your money over the next three years…
Tesla and Eicher Motors are the kinds of type II error we will inevitably commit because we reject highly indebted business, rapidly evolving industry landscaped, and turnarounds. But we will not change our approach.
𝐅𝐨𝐫 𝐞𝐯𝐞𝐫𝐲 𝐓𝐞𝐬𝐥𝐚 𝐚𝐧𝐝 𝐄𝐢𝐜𝐡𝐞𝐫, 𝐡𝐮𝐧𝐝𝐫𝐞𝐝𝐬 𝐨𝐟 𝐮𝐧𝐩𝐫𝐨𝐯𝐞𝐧 𝐛𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐦𝐨𝐝𝐞𝐥𝐬 𝐚𝐧𝐝 𝐭𝐮𝐫𝐧𝐚𝐫𝐨𝐮𝐧𝐝 𝐬𝐭𝐨𝐫𝐢𝐞𝐬 𝐚𝐫𝐞 𝐮𝐧𝐜𝐞𝐫𝐞𝐦𝐨𝐧𝐢𝐨𝐮𝐬𝐥𝐲 𝐜𝐨𝐧𝐬𝐢𝐠𝐧𝐞𝐝 𝐭𝐨 𝐭𝐡𝐞 𝐝𝐮𝐬𝐭𝐛𝐢𝐧 𝐨𝐟 𝐡𝐢𝐬𝐭𝐨𝐫𝐲. 𝐖𝐞 𝐛𝐞𝐥𝐢𝐞𝐯𝐞 𝐨𝐮𝐫 𝐬𝐮𝐜𝐜𝐞𝐬𝐬 𝐢𝐬 𝐜𝐨𝐧𝐭𝐢𝐧𝐠𝐞𝐧𝐭 𝐮𝐩𝐨𝐧 𝐨𝐮𝐫 𝐛𝐞𝐢𝐧𝐠 𝙘𝙤𝙢𝙛𝙤𝙧𝙩𝙖𝙗𝙡𝙚 𝐰𝐢𝐭𝐡 𝐦𝐢𝐬𝐬𝐢𝐧𝐠 𝐨𝐮𝐭 𝐨𝐧 𝐓𝐞𝐬𝐥𝐚𝐬 𝐚𝐧𝐝 𝐄𝐢𝐜𝐡𝐞𝐫𝐬 𝐛𝐞𝐜𝐚𝐮𝐬𝐞 𝐨𝐧 𝙖𝙫𝙚𝙧𝙖𝙜𝙚, 𝐚𝐯𝐨𝐢𝐝𝐢𝐧𝐠 𝐭𝐲𝐩𝐞 𝐈 𝐞𝐫𝐫𝐨𝐫𝐬 𝐰𝐨𝐫𝐤𝐬 𝐰𝐨𝐧𝐝𝐞𝐫𝐬 𝐨𝐯𝐞𝐫 𝐭𝐡𝐞 𝐥𝐨𝐧𝐠-𝐭𝐞𝐫𝐦. 𝐈𝐭 𝐡𝐚𝐬 𝐝𝐨𝐧𝐞 𝐬𝐨 𝐟𝐨𝐫 𝐮𝐬.”
$NOW is an example of a type I error.
Page(s): 39-40
tweet
RT @DimitryNakhla: Haha thanks. I them every now & then.
Of course for every 98 that crash you may have 2 that end up like $NVDA & $PLTR (which are incredible businesses with jaw-dropping growth & wide moats with deep tech advantages).
Yet, as Pulak Prasad eloquently writes in 𝘞𝘩𝘢𝘵 𝘐 𝘓𝘦𝘢𝘳𝘯𝘦𝘥 𝘈𝘣𝘰𝘶𝘵 𝘐𝘯𝘷𝘦𝘴𝘵𝘪𝘯𝘨 𝘍𝘳𝘰𝘮 𝘋𝘢𝘳𝘸𝘪𝘯:
“But you would have missed Tesla! Yup. We would have. We eschew a very long list of risks. This is the core element of our investment strategy…
If you had listened to what we had to say about the business, you would not have invested. Your opportunity loss? Ten times your money over the next three years…
Tesla and Eicher Motors are the kinds of type II error we will inevitably commit because we reject highly indebted business, rapidly evolving industry landscaped, and turnarounds. But we will not change our approach.
𝐅𝐨𝐫 𝐞𝐯𝐞𝐫𝐲 𝐓𝐞𝐬𝐥𝐚 𝐚𝐧𝐝 𝐄𝐢𝐜𝐡𝐞𝐫, 𝐡𝐮𝐧𝐝𝐫𝐞𝐝𝐬 𝐨𝐟 𝐮𝐧𝐩𝐫𝐨𝐯𝐞𝐧 𝐛𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐦𝐨𝐝𝐞𝐥𝐬 𝐚𝐧𝐝 𝐭𝐮𝐫𝐧𝐚𝐫𝐨𝐮𝐧𝐝 𝐬𝐭𝐨𝐫𝐢𝐞𝐬 𝐚𝐫𝐞 𝐮𝐧𝐜𝐞𝐫𝐞𝐦𝐨𝐧𝐢𝐨𝐮𝐬𝐥𝐲 𝐜𝐨𝐧𝐬𝐢𝐠𝐧𝐞𝐝 𝐭𝐨 𝐭𝐡𝐞 𝐝𝐮𝐬𝐭𝐛𝐢𝐧 𝐨𝐟 𝐡𝐢𝐬𝐭𝐨𝐫𝐲. 𝐖𝐞 𝐛𝐞𝐥𝐢𝐞𝐯𝐞 𝐨𝐮𝐫 𝐬𝐮𝐜𝐜𝐞𝐬𝐬 𝐢𝐬 𝐜𝐨𝐧𝐭𝐢𝐧𝐠𝐞𝐧𝐭 𝐮𝐩𝐨𝐧 𝐨𝐮𝐫 𝐛𝐞𝐢𝐧𝐠 𝙘𝙤𝙢𝙛𝙤𝙧𝙩𝙖𝙗𝙡𝙚 𝐰𝐢𝐭𝐡 𝐦𝐢𝐬𝐬𝐢𝐧𝐠 𝐨𝐮𝐭 𝐨𝐧 𝐓𝐞𝐬𝐥𝐚𝐬 𝐚𝐧𝐝 𝐄𝐢𝐜𝐡𝐞𝐫𝐬 𝐛𝐞𝐜𝐚𝐮𝐬𝐞 𝐨𝐧 𝙖𝙫𝙚𝙧𝙖𝙜𝙚, 𝐚𝐯𝐨𝐢𝐝𝐢𝐧𝐠 𝐭𝐲𝐩𝐞 𝐈 𝐞𝐫𝐫𝐨𝐫𝐬 𝐰𝐨𝐫𝐤𝐬 𝐰𝐨𝐧𝐝𝐞𝐫𝐬 𝐨𝐯𝐞𝐫 𝐭𝐡𝐞 𝐥𝐨𝐧𝐠-𝐭𝐞𝐫𝐦. 𝐈𝐭 𝐡𝐚𝐬 𝐝𝐨𝐧𝐞 𝐬𝐨 𝐟𝐨𝐫 𝐮𝐬.”
$NOW is an example of a type I error.
Page(s): 39-40
tweet