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https://x.com/i/lists/1669153613199835138?t=R0mCicxs7zfJE_yOAek4gQ&s=09
Hidden Value Gems
Happy Monday! Have a great week ahead!
Quote of the day #102
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Librarian Capital
Fundsmith comments on mgmt. always interesting
Exited Diageo $DGE in Aug-24 after LAC over-stocking
Exited Estée Lauder $EL in Aug-23 after China blow-up
Exited Adobe $ADBE in Mar-23 after
Exited PayPal $PYPL in Dec-22 after COVID bubble
All at new multi-year lows at the time https://t.co/q73YoYMEIC
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Librarian Capital
Terry Smith does not like the FTSE 100 index
"An index that’s dominated by banks, utilities, commodities and energy is not likely to produce a lot of high-quality companies"
"If you’re thinking about why the UK is lowly rated compared to the rest of the world ... https://t.co/p92VuJlMWK
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Librarian Capital
Diageo $DGE executive team in 2022 annual report
CEO, CFO not listed here; CFO then, Lavanya Chandrashekar, since exited
Head of L&C, Alvaro Cardenas, in that role since Jan-21, still holds that role
Soraya Benchikh not here; she will appear once in 2023 before return to $BATS https://t.co/00inuNjbr0
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Stock Analysis Compilation
Guinness GI on Enphase $ENPH US
Thesis: Enphase’s nimble manufacturing and diversified solar product offerings make it a compelling investment as solar energy demand continues to grow globally.
(Extract from their Q2 letter) https://t.co/GWhUpetsX6
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Librarian Capital
EU house prices & rents (2010-24Q2) *
House prices fell in 2022 after Rusian energy shock
Rent growth accelerated slightly since 2022
* weighted, so ~50% from Germany, France, Italy https://t.co/SrwUOPAolG
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Investing visuals
RT @ZeevyInvesting: 10 Business Battles Super Thread!🥊🧵
A side-by-side comparison of iconic duos, sector leaders, and lifelong rivals.
Who’s your favorite?👇
#1 Visa $V versus Mastercard $MA: A unique duopoly in the digital payments industry 💳
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Stock Analysis Compilation
Artisan Partners on Tencent $TCEHY US
Thesis: Tencent’s gaming pipeline, advertising growth, and strategic market position in China make it a solid play as regulatory headwinds subside.
(Extract from their Q2 letter) https://t.co/0aI3VDjaSs
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Startup Archive
Keith Rabois on the “one person, one problem" framework he learned from Peter Thiel
"Peter Thiel used to insist at PayPal that every single person could only do exactly one thing. And we all rebelled. You feel like it's insulting to be asked to do just one thing.
But Peter would enforce this pretty strictly. He'd basically say: 'I will not talk to you about anything else except for this one thing that I've assigned to you. I don't want to hear about how great you're doing in this other area. Just focus until you conquer this one problem.'...
The insight behind this is that most people will solve problems that they understand how to solve. Roughly speaking, they will solve B+ problems instead of A+ problems.
A+ problems are high-impact problems for your company but they're difficult--you don't wake up in the morning with a solution to them, so you tend to procrastinate...
If you have a company that's always solving B+ problems, you'll never create the breakthrough idea because no one is spending 100% of their time banging their head against the wall every day until they solve it"
Video source: @ycombinator (2014)
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Startup Archive
RT @filippkowalski: “Go hard at it. [...] Launch your thing. Just start doing stuff - and even if you don’t know what to do, just do anything, because action will produce information and it’ll help you get to the right thing.”
Yes 💯
Brian Armstrong explains how he built Coinbase on nights and weekends while working at Airbnb
Brian first advises those who are currently employed to not build your project on company hours or on your company laptop:
“If you build it on company time or on the company hardware, the company probably owns the IP.”
Then he describes his schedule for working on Coinbase while still working full-time at Airbnb.
“I would often work [at Airbnb] until 7pm. I’d come home, eat dinner, and then I would work from 8pm to midnight. I would do that maybe 3-4 days a week on weekdays. And then on the weekend I’d work Sunday afternoon for 7-8 hours.”
Brian did this consistently for about a year and a half until Coinbase was far enough along for him to get seed funding from Y Combinator.
“It sucked. I mean I was tired after the full day of work [at Airbnb]. But this is where determination comes in… At that moment in time, I was in my late 20s, and I was like, ‘I really want to try to build something important in the world.’”
When asked how he maintained friendships during this time, Brian replies:
“I was pretty intense about it. I would say I sacrificed friendships for it. It’s not like I was just never responding to people, but I’ve seen this happen to various people. They get to a certain point in their life. Sometimes they turn a certain age where they thought they would have more done by then or maybe someone in their family passes away and they’re like, Oh my god, time is finite. It’s precious. And something happens where they’re like, ‘I’m going to get this done, no matter the cost.’”
Brian tells those out there who might be in a similar situation:
“Go hard at it. Finish your book. Launch your thing. Just start doing stuff - and even if you don’t know what to do, just do anything, because action will produce information and it’ll help you get to the right thing.”
Video source: @StevenBartlett (2022)
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Librarian Capital
Elon Musk, during 2022 US mid-term elections:
“I voted ... first time I ever voted Republican"
"Massive red wave in 2022"
Both of these were false: The Democrats gained 1 seat, and state records showed Elon Musk did not vote
Source: "Character Limit" (Kate Conger & Ryan Mac) https://t.co/rrMuwGu52b
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Librarian Capital
When FCF Yield is not a better metric than P/E
Novo Nordisk $NOVO & Eli Lilly $LLY
FCF = Op CF - CapEx (inc. intangibles)
NOVO 2023 FCF $44.8bn vs. Net Income $83.7bn
LLY 2023 FCF -$3.0bn
To get "real" earnings, you need to understand the business, there is no formula shortcut https://t.co/eJ6b9Fnhh2
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Librarian Capital
How you know an investment column has lost its audience
The below is the 2nd most-recommended comment on a weekly investment column published on Friday
Column was supposedly about tough markets
Comment was about ... I don't know what it's about
12 "recommends"; top one has 20 https://t.co/DGyjargFpM
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Stock Analysis Compilation
Harding Loevner on ICICI Bank $IBN US
Thesis: ICICI Bank’s robust growth trajectory, combined with strategic risk management improvements, positions it well to capture India's expanding financial services market.
(Extract from their Q2 letter) https://t.co/s8EeEWCB6M
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Dimitry Nakhla | Babylon Capital®
RT @DimitryNakhla: 10 Quality Stocks 10-Year EPS CAGR >15% | NTM P/E | LTM ROIC >20% 💵
💳 Mastercard $MA
•EPS CAGR: 16.7%
•NTM P/E: 32.45x
•LTM ROIC: 65.7%
🚘 Copart $CPRT
•EPS CAGR: 21.4%
•NTM P/E: 33.82x
•LTM ROIC: 20.3%
🌐 MSCI Inc $MSCI
•EPS CAGR: 20.1%
•NTM P/E: 37.45x
•LTM ROIC: 36.3%
📸 Meta Platforms $META
•EPS CAGR: 32.6%
•NTM P/E: 25.33x
•LTM ROIC: 31.7%
🖨️ KLA Corp $KLAC
•EPS CAGR: 20.9%
•NTM P/E: 26.13x
•LTM ROIC: 34.0%
🏢 NVR Inc $NVR
•EPS CAGR: 23.7%
•NTM P/E: 19.54x
•LTM ROIC: 39.7%
💽 ASML Holding $ASML
•EPS CAGR: 23.8%
•NTM P/E: 30.70x
•LTM ROIC: 39.7%
📑 Microsoft $MSFT
•EPS CAGR: 16.1%
•NTM P/E: 31.72x
•LTM ROIC: 29.7%
🚜 Tractor Supply & Co $TSCO
•EPS CAGR: 15.8%
•NTM P/E: 27.80x
•LTM ROIC: 20.0%
📈 Taiwan Semiconductor $TSM
•EPS CAGR: 15.5%
•NTM P/E: 23.57x
•LTM ROIC: 21.1%
#stocks #investing
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Hidden Value Gems
“Corporate insiders have been reluctant to snap up shares of their companies. Of all US companies with a transaction by an officer or director in July, only 15.7% reported net buying of company shares. That was the lowest level in the past 10 years. The figure ticked up to 25.7% in August before falling to 21.9% in September, well below the 10-year average of 26.3%.”
via @WSJ
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Librarian Capital
Terry Smith to people who buy stocks for "income"
"When they pay you a dividend ... Do you think the money comes lowered through the clouds on a stick?
It comes from the company ... which they then can’t invest in the business. It’s the same effect as you selling some shares" https://t.co/EWOAECBru1
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Librarian Capital
RT @MichLKosinski: Well now here is an odd thing.
My 86-year-old, highly intelligent, sharp-as-a-tack father in law-- a former AP journalist, lifetime anti-racist, champion of democracy, and excellent tweeter of truth--
has been kicked off of Twitter (yes I call it that). https://t.co/oGCpakW1Jk
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Librarian Capital
Terry Smith on Fundsmith decision to exit Diageo (II interview, 19-Sep)
1. LATAM over-stocking "puzzled" them and sector peers
2. "General downturn in spirits consumptions" in US
3. "Might be in the early stages" of GLP-1 effect
4. New management "untested" & unproven
$DGE $DEO https://t.co/lEggT5dOPL
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Librarian Capital
"China demands schoolteachers hand in their passports" (FT)
"Interviews with more than a dozen Chinese public sector workers and notices ... in half a dozen cities show restrictions on international travel have been greatly expanded ... to include rank-and-file employees" https://t.co/f2AEekSppb
China demands schoolteachers hand in their passports https://t.co/CThKNNfCzT
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Stock Analysis Compilation
Broyhill AM on Fiserv $FISV US
Thesis: Fiserv’s scale, embedded distribution advantages, and high-growth potential from its Clover platform make it a leading fintech investment with strong growth runway
(Extract from their Q2 letter) https://t.co/v7iIgSFHkN
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Stock Analysis Compilation
TCW on Xylem $XYL US
Thesis: Xylem's leadership in water management, combined with its strategic acquisition of Evoqua, positions it well for long-term growth as global water challenges intensify
(Extract from their Q2 letter) https://t.co/kxb0jfkAef
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Startup Archive
Peter Thiel explains his principle of only working on problems that wouldn’t get solved without you
Thiel shares that he’s “a little bit skeptical” of social entrepreneurship:
“Social entrepreneurship is always ambiguous because it’s unclear what the word ‘social’ means. Social can mean that it’s ‘good for society’ or it can mean that it’s ‘good as seen by society’. In the second meaning, you often end up with something that many people are doing.”
He gives education startups as an example of a social startup - it’s seen as objectively good and lots of people are working on it.
Thiel contrasts this to a mission-oriented company:
“A mission-oriented company is one where if you didn’t work on this problem, nobody would.”
He gives the example of Elon Musk starting SpaceX with the mission of going to Mars and making humans interplanetary. If Elon wasn’t working on it, this problem might not get solved.
Thiel believes this is an important principle in general:
“We always want to do things where… if you weren’t working on it, it wouldn’t get solved. Always go for that sort of counterfactual meaning. You don’t want to ever be in a place where you’re just one of a hundred cogs in the machine… You want to be in a place where you’re doing something that can’t be easily replicated or replaced - either on an individual level or the level of a company.”
Video source: @Wharton (2014)
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Startup Archive
Patrick Collison on the importance of beauty and craftsmanship when building products
“If Stripe is a monstrously successful business, but what we make isn’t beautiful, and Stripe doesn’t embody a culture of incredibly exacting craftsmanship, I’ll be much less happy. I think the returns to both of those things in the world are really high. I think even beyond the pecuniary or financial returns, the world’s just uglier than it needs to be… One can do things well or poorly, and beauty is not a rivalrous good.”
Patrick believes a commitment to craftsmanship and beauty played an important role in Stripe’s success:
“My intuition is that more of Stripe’s success than one would think is downstream of the fact that people like beautiful things—and for kind of rational reasons because what does a beautiful thing tell you? Well it tells you the person who made it really cared… And so if you care about the infrastructure being holistically good, indexing on the superficial characteristics that you can actually observe is not an irrational thing to do.”
Video source: @MillionStories (Mar 2024)
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Investing visuals
Show this to every investor who only talks about stock price👇 https://t.co/BRJCOA9IKk
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Librarian Capital
Diageo has reportedly hired bankers to explore whether to dispose of Pimms (Sky)
Also reportedly exploring potential disposals of Safari, a fruit liqueur, and Pampero, a rum brand
$DGE $DEO
Exclusive: Diageo, the FTSE-100 alcoholic drinks giant, has begun exploring a sale of Pimm’s, the English summer tipple which has held a long association with the Wimbledon tennis championships. It has owned Pimm’s, which was created in 1840, since 1997. https://t.co/TflOwGKTkD
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Stock Analysis Compilation
Orbis on Nintendo $7974 JP
Thesis: Nintendo's evolution into multimedia, alongside its core video game business, offers significant upside with minimal downside risk given its strong brand, IP, and new revenue streams.
(Extract from their Q2 letter) https://t.co/9CEGAik6dH
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Librarian Capital
Another way to bet on GLP-1?
"Regeneron $RGEN head says weight-loss drugs could cause ‘more harm than good’" (FT)
Patients "lose muscle at far faster rates than people losing weight from diet or exercise", but "2 in every 5 patients ... discontinue the treatments within a year" https://t.co/YVv2fnGaqn
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Alex Bilzerian
RT @somefoundersalt: deep tech founders are just a hybrid of chronic gambling addict and scientist
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iinvested
There are 3 addl letter posted from 2Q 2024:
- Bonsai Partners $UI
- RGA Investment Advisors $PLAY, $MTN
- Saltlight Capital $SE, $BN
Read thevletters here:
https://t.co/WRGkdL2eBG
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