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https://x.com/i/lists/1669153613199835138?t=R0mCicxs7zfJE_yOAek4gQ&s=09
Startup Archive
Jeff Bezos: “You don’t understand my audience”
When Charlie Rose asks him if the iPad is a “Kindle killer” in this 2012 interview, Jeff gives an incredible response:
“It’s a very different product, and I can give you an example. If I came to you and said: ‘Charlie, I love your show, but we’ve got to sex it up. We need fast cuts and vicious arguments between your guests.’ You would rightly say to me: ‘Jeff, I love you man, but you don’t understand my audience. We have a cerebral conversation here. It’s what we do, and it’s how we’re differentiated.’”
He continues:
“When people come to me and say: ‘You’ve got to have full-motion video and color on the Kindle.” I say: ‘Why? You think Hemingway is going to pop more in color?’… You don’t understand my audience.”
Jeff explains that his vision for the Kindle is a purpose-build device for reading where no tradeoffs have been made—every single design decision is optimized for reading.
And knowing exactly who his audience is gave him conviction in the Kindle team’s design decisions—even when everyone at the time was saying that the iPad would crush them.
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Librarian Capital
RT @JJohnsonLaw: Bravo, @nytimes 👏🏼 https://t.co/IhZ22S6jsN
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Librarian Capital
https://t.co/u7DQbavuul
Trump: "You know there's a theory -- pick a really bad vice president, that way they never get rid of you." https://t.co/U4NEpSjvOM
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Librarian Capital
Small business banking / Visa Direct anecdote
Recently we tried to move ~$3k from PayPal to
our business banking account with a Big 4 UK bank
Default bank a/c transfer failed many times
UK bank couldn't even see attempts
Use debit card; it worked instantly
$V $PYPL
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Librarian Capital
Bill Ackman amplifying another post without checking
"Recently I made ... a bold decision to switch my party affiliation to the Republican Party"
The video is from 2013
"Senator Elbert Guillory" was a state senator and this was his second defection (he was GOP until 2007 ) https://t.co/nYu8W1Hjtq
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Librarian Capital
"Companies bit by French tax hike" (FT)
Year-1 impact:
LVMH $MC €700-800m (15%)
Vinci $DG €400m (18%)
Safran $SAF €320-340m
Hermes $RMS €300m (19%)
L'Oréal $OR €250m (14%)
Thales $HO €105m (both years)
Kering $KER "no significant impact"
Luxury, defence and construction companies bit by French tax hike https://t.co/yHjUVK8PeK
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Startup Archive
Peter Thiel on the key to hiring:
"Like focus, intelligence has a convex output curve — the smartest people can be an order of magnitude more productive than others who are only somewhat less smart. The key in hiring is to value potential skill rather than currently existing skill — and potential skill is based on intelligence rather than training."
9 Lessons from Peter Thiel by @JTLonsdale https://t.co/1zutaYqgWx
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Stock Analysis Compilation
Clearbridge on Broadcom $AVGO US
Thesis: Broadcom’s custom silicon business and acquisition of VMware provide durable growth opportunities, making it a strong investment in the AI sector with a favorable risk/reward profile.
(Extract from their Q3 letter) https://t.co/PZ2Ik1f63U
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Quiver Quantitative
The market is red today, but Nancy Pelosi is still making money.
Up $100K today, per our estimates.
Her position in Nvidia, $NVDA, is up big. https://t.co/G7treYDZpB
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Startup Archive
RT @foundertribune: Another excerpt from Marc Andreessen's foreword to Becoming Steve Jobs by Brent Schlender in 2016:
"Steve Jobs and the Tall Poppy Syndrome" https://t.co/e0IEz1AfHm
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Quiver Quantitative
Berkshire Hathaway has disclosed a purchase of ~$42m of Sirius XM stock.
This adds to their existing ~$3b position in the company. https://t.co/y3MBxJioSc
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Value Spotlight (Andrew Sather)
Tutorial: Stock-based compensation and Growth estimates from ROIC
$CRM https://t.co/fSOv2LyjBp
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iinvested
3Q'24 Third Avenue Small-Cap Value Fund on $SD, $PBF
More fund letters here:
https://t.co/ccjFhSQnS3 https://t.co/IwDxy8wYjU
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Dimitry Nakhla | Babylon Capital®
A sober valuation analysis on $ELV 🧘🏽♂️
•NTM P/E Ratio: 11.52x
•5-Year Mean: 14.05x
•NTM FCF Yield: 8.28%
•5-Year Mean: 6.87%
As you can see, $ELV appears to be trading below fair value
Going forward, investors can expect to receive ~22% MORE in earnings per share & ~20% MORE in FCF per share🧠***
Before we get into valuation, let’s take a look at why $ELV is a quality business
BALANCE SHEET✅
•Cash & Equivalents: $7.86B
•Total Investments: $40.35B
•Long-Term Debt: $24.68B
$ELV has a strong balance sheet, an A S&P Credit Rating & 1.93x FFO Interest Coverage Ratio (temporarily lower FFO)
RETURN ON CAPITAL✅
•2019: 12.3%
•2020: 14.7%
•2021: 14.3%
•2022: 13.4%
•2023: 14.7%
•LTM: 14.5%
RETURN ON EQUITY✅
•2019: 16.0%
•2020: 14.1%
•2021: 17.7%
•2022: 16.3%
•2023: 15.8%
•LTM: 15.5%
$ELV has solid return metrics, highlighting the financial efficiency of the business
REVENUES✅
•2013: $71.02B
•2023: $171.34B
•CAGR: 9.20%
FREE CASH FLOW✅
•2013: $2.41B
•2023: $6.77B
•CAGR: 10.88%
NORMALIZED EPS✅
•2013: $8.52
•2023: $33.14
•CAGR: 14.54%
SHARE BUYBACKS✅
•2013 Shares Outstanding: 303.80M
•LTM Shares Outstanding: 234.10M
By reducing its shares outstanding ~23%, $ELV increases its EPS by ~30% (assuming 0 growth)
MARGINS🆗
•LTM Gross Margins: 9.4%
•LTM Operating Margins: 6.1%
•LTM Net Income Margins: 3.7%
PAID DIVIDENDS✅
•2013: $1.50
•2023: $5.92
•CAGR: 14.71%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~22% MORE in EPS & ~20% MORE in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $ELV has to grow earnings at a 5.76% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2024 - 2026 EPS growth over the next few years to be greater than the (5.76%) required growth rate:
2024E: $35.36 (6.7% YoY) *FY Dec
2025E: $39.00 (10.3% YoY)
2026E: $44.01 (12.8% YoY)
$ELV has a great track record of meeting analyst estimates ~2 years out, so let’s assume $ELV ends 2026 with $44.01 in EPS & see its CAGR potential assuming different multiples
14x P/E: $616.14💵 … ~19.1% CAGR
13x P/E: $572.13💵 … ~15.2% CAGR
12x P/E: $528.12💵 … ~11.2% CAGR
As you can see, $ELV has attractive CAGR potential if we assume a >12x multiple (below its 14.05x 5-year mean & below its 14.22x 10-year mean)
More importantly, 12x is MORE than reasonable for a business that’s expected to grow earnings at a >10% rate & has a strong history of linear earnings growth ( $ELV has increased EPS annually since 2008 🎯)
I also like the negative price correlation $ELV can have, relative to tech, in the short-term … adding a layer of safety in a portfolio
In short, $ELV appears to be a strong consideration at $430💵
However, knowing that health insurers often face volatility amid the perception of political risks (among other things), it’s wise to piece in & perhaps be prepared to add a second tranche at lower prices (as I’ve mentioned before)
#stocks #investing
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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 𝐜𝐨𝐦𝐩𝐥𝐞𝐭𝐞𝐧𝐞𝐬𝐬 𝐨𝐫 𝐚𝐜𝐜𝐮𝐫𝐚𝐜𝐲.
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Hidden Value Gems
Pretty impressive: Mag7 stocks responsible for most of earnings growth of the S&P500 index 👇🏼 https://t.co/mAt6qQrdrG
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Librarian Capital
RT @emzorbit: Musk didn’t quit school. He never started. He used Stanford as an excuse to get into the country. Then he never registered for classes. His plan was to get into the country on a student visa and then start his company. He never intended to go to school. https://t.co/AK2IXW6daW
Elon Musk worked in US illegally in 1995 after quitting school – report https://t.co/W5yki6ARZZ
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Librarian Capital
Reports of US voters being turned away erroneously
If this happens to you, you have a right to request a "provisional ballot" under federal law, except in states with same-day voter registration
Know your rights
Tell your friends
Source: National Conf. of State Legislatures https://t.co/jK77HzvASV
I just went to vote early and was told that I couldn’t vote because I updated my registration a few weeks ago vs 90 days before the election, even tho my online voter registration is accurate and says active.
Multiple people also got turned away.
So confused….
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Librarian Capital
The key skill in politics is knowing how to count
The way billionaires like Elon Musk have assembled a ~50% coalition behind Trump is impressive
The Proud Boys likely aren't keen Bill Ackman can pay less tax, but there they are
Conversely, many liberal causes alienated voters https://t.co/IceM6b2NyZ
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Librarian Capital
RT @ylecun: Trump has unfathomably idiotic policy proposals.
Many of them are impractical, illegal, or against the constitution.
But because he is an unfathomable idiot himself and because only idiots are willing to work with him, he is also totally ineffective when it comes to implementing his proposals, even those that are not illegal.
Here are some facts:
Trump had complete control from 2017 to 2019—he held the presidency, the Supreme Court majority, the House, the Senate, and the Department of Justice.
Here’s what happened:
0 Immigration bills passed
0 Funding for the wall:l
Immigration levels: hit record highs in 2019
Tax cuts for billionaires: 1
These are the numbers—just a little perspective.
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Librarian Capital
"European stocks hit by ‘Trump effect’ as odds tilt towards Republican win" (FT)
Diageo $DGE mentioned as part of Barclays' 28-stock vulnerable European companies basket
$DEO ADR down 5% since Sep month-end https://t.co/OMBz3eKJ5X
European stocks hit by ‘Trump effect’ as odds tilt towards Republican win https://t.co/vreml00fA3
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Librarian Capital
RT @John_Hempton: A very rare long from me. Quite non-consensus as the company has seldom failed to disappoint.
Brambles.
$BXB.AX
https://t.co/98m8uFfUEH
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Startup Archive
RT @foundertribune: 9 Lessons from Peter Thiel by @JTLonsdale https://t.co/1zutaYqgWx
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Startup Archive
RT @then_there_was: This is a common enough story I’ve noticed: Entrepreneur tries to build, but stumbles upon a problem nobody else has fixed yet.
Person fixes problem, then notices it’s better than what they were trying to originally make.
It’s very telling this happened twice with the same game, as if it ultimately didn’t matter what they built because the same obstacle exists on many paths.
And it also suggests many other businessmen stumbled upon the same problem and for whatever reason didn’t notice it or couldn’t fix it.
Ben Horowitz tells the story of Slack’s pivot from a failed gaming app into a $28 billion company
Ben recalls investing in Stewart Butterfield’s new company Tiny Speck.
In 2001, Stewart began building an online game, pivoted into Flickr, and the company was acquired by Yahoo in 2005 for $25 million. In early 2009, Stewart decided he wanted to try building the online game again. This time, it would be called Glitch.
Ben tells the story:
“And so he builds Glitch. I love Glitch - it was a marvelous game. But it had two major problems. One, he started it in 2006 and built on Flash before Steve Jobs declared war on Flash. So it wasn’t going to work on the iPhone. And then the other problem was people would finish the game in two days, and so that’s not very good for retention.”
After raising more than $15 million to build Glitch, Stewart called Ben to tell his investor that they only had $6 million left:
“Ben, I’ve got $6 million left. I have no way to raise money because I’ve made really no progress because of these issues. It’s going to cost me more than $6 million to finish the game. So I’ve got three choices. I can pray for rain and try and finish it. I can shut down the company and give you your $6 million back. Or we build this tool that we use in our engineering team to communicate with each other and make engineering work a little better, and I could just put that out as a product.”
Ben replies:
“What? You just like built some tool to talk to each other and you want to put that out as a product? And you’re a consumer guy and you want to become an enterprise software guy?”
Stewart says, “Yeah, I think it’d be a pretty good idea.” And so Ben said, “$6 million isn’t going to make a big difference in my life. If you really think it’s a good idea and you want to do that, go ahead.”
Stewart decided to call the new product Slack, and it soon became the fastest growing enterprise software company of all time before SalesForce acquired it for $27.7 billion in July 2021.
Ben points out an important lesson here:
“A lot of the process is do you have a secret? Do you know something that nobody else knows? And because [Stewart] was pulling his hair out, literally smoking 8 packs of cigarettes a day, trying to get Glitch out the door, he was doing everything to optimize that development, and so he learned where software development was suboptimal… And that’s a really big key. You have to do something really hard if you want to learn something about the world that nobody else knows or is acting on. That’s when you have a breakthrough. But it starts with hard work.”
Video source: @SutardjaCenter (2020)
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Startup Archive
Marc Andreessen on Steve Jobs and the "tall poppy syndrome":
"There’s a major urge in American society today to implement the tall poppy syndrome. It’s this movement right now in politics and economics, this purported ideal that everybody ought to be equal, which is to say, for nobody to be special. Steve embodied the other side of that. The whole point of Steve, and the whole point of Apple, was to be special"
Another excerpt from Marc Andreessen's foreword to Becoming Steve Jobs by Brent Schlender in 2016:
"Steve Jobs and the Tall Poppy Syndrome" https://t.co/e0IEz1AfHm
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Stock Analysis Compilation
Right Tail Capital on CDW Corp $CDW US
Thesis: CDW Corp and NSIT, leading IT solutions providers, offer strong long-term growth opportunities in a fragmented market, backed by exceptional customer and vendor relationships
(Extract from their Q3 letter) https://t.co/l81RdisqXr
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Hidden Value Gems
Quote of the day #109 https://t.co/9jUT7nceZP
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Quiver Quantitative
This keeps getting wilder.
We posted this report last month.
$HL has now risen 48% since the trade.
It's up another 2% today. https://t.co/OYL00XfaUF
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Stock Analysis Compilation
Vltava Fund on Brookfield Corporation $BN
Thesis: Brookfield Corporation, with its massive global asset management business and strong infrastructure holdings, presents an attractive long-term investment with a 15% projected annual growth rate
(Extract from their Q3 letter) https://t.co/NaJZN0jjfz
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Startup Archive
Keith Rabois explains “Founder Mode” and its similarities to how PayPal was run in the early days
“At PayPal, we never promoted anybody based on their management skill. We promoted everybody based on their craft. So if you wanted to run the design team, you had to be the best designer. If you wanted to run the engineering team, you had to be the best engineer. If you wanted to run product, you had to be the best product person. The CFO had to be the best finance person.”
The elimination of middle management from company org charts that Airbnb founder Brian Chesky talks about and Paul Graham’s viral essay Founder Mode, Keith argues, “re-popularized ideas that are pretty old school… It’s the antithesis of hiring someone whose expertise is managing versus someone whose expertise is building.”
Keith points out that Elon Musk has always run his companies in “founder mode” with the slashing of headcount by 80% and promoting individual contributors to managers at X being perhaps the most prominent example.
But Apple has been run this way for a lot of its history too:
“At Apple you get promoted by mastering something. Not by being a generalist… Apple collates and collects a bunch of people who are literally the best in the world at 26 different things and mixes them together. That’s a much better model.”
When asked what to do if, say, the best salesperson can’t grow into a VP of sales, Keith replies that most people should be able to and you should try it anyway:
“Sometimes its mentoring, pairing them with the right person, giving them the right feedback. But at least if you promote that person, you’re not going to demoralize your team because everybody knows that they were the best salesperson… They may have to learn how to coach and mentor other people, but you have enthusiasm and energy from the rank and file.”
He contrasts this to the alternative scenario:
“If you bring in someone who’s never hit a quota, never proven that they can sell product X, and you’re like ‘Oh, you’re the new manager.’ Sometimes people are like, ‘Who the hell are you?’ And it’s a very valid critique.”
Video source: @imchrisvasquez (2024)
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Stock Analysis Compilation
Night Watch IM on X-FAB Global Foundries $XFAB FP
Thesis: X-FAB Global Foundries (XFAB FP) offers a strong upside with potential earnings growth and major catalysts in semiconductor demand, alongside insider ownership backing
(Extract from their Q3 letter) https://t.co/qvuS99A5E7
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