Interesting point on tobacco companies’ working capital that I had not realized before. From “Ashes to Ashes” by Kluger.
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Tim Zanghi
621 posts
@themoviedadsc I will take time over high income. Obviously, it’s all math, but time is the exponential factor in long term compounding.
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High income is the biggest investing edge.
You can be a genius earning 14% annually, but if you can only invest $200/mo, that'll get you ~$909K in 30 years.
A high earner investing $2,000/mo at 8% ends up with ~$2.8M.
Returns matter, but income (career choice) matters more.
10XINVESTOR@drp825_
What’s the biggest investing lesson you’ve learned so far?
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@ValleyFallsRI Truth be told I’m not sure what trades on global OTC. But I don’t think it would be easy to steal share without investing lots and lots of money. Nasdaq tried to open a competing exchange in Europe not too long ago and had to shut it down.
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@CigarButtz @wtnelson I was under the impression OTC Markets has a monopoly on non exchange listed public companies
(corporate services)
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Feel like $OTCM could have been materially impaired all these years if a national exchange wanted to *actually* compete with them.
But it's not worth it for a measly $30 mill in earnings!
How about a start up?
It's a complex business, network effects, regulations, know how.
Not an easy ask even with proper funding.
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@ValleyFallsRI @wtnelson Why do you think OTC global isn’t actually trying to compete?
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@TreyHenninger Probably a hold then. As long as you can sleep at night, nothing wrong with a 50%+ position, imo. Although at 70+ I’d probably be looking pretty hard for something cheaper to diversify into!
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@CigarButtz What if it remains the cheapest stock you own, has a trustworthy management and the highest potential upside?
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Say you own a 50% position in a stock but it keeps going up faster than your portfolio. When do you trim or sell?
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@psyopcapital Not OTC, but Hingham fits your criteria historically and it is despised by bank investors.
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$trux gets a lot of love on here (and rightly so), what are some other high quality otc banks with good underwriting culture and history of compounding earnings power at a respectable clip?
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@turtlebay_io @compound248 @JohnHuber72 This also mirrors the set up of his preferred investments during the GFC: his dividend yield set his floor, and he got warrants for upside, but as long as the companies didn’t go bankrupt, he had his minimal return set. The rest was upside.
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@turtlebay_io @compound248 @JohnHuber72 Guessing here, but I think Buffett uses the multiple to set his floor on returns and, assuming ROIC>earnings yield, his return will only improve from there. This is how Schroeder described his analysis of Data Documents-he wanted 15% on day one plus whatever growth.
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I think this is the #1 reason why Buffett hardly ever paid more than 15 P/E and often paid 10x or less for stocks. Getting more cash in the near term reduces the reliance on being right about the very long term, which is what you need to be when paying high multiples
Finding Compounders@F_Compounders
Todd Combs on the first question Charlie Munger ever asked him
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@dirtcheapstocks Interesting. I would say the same of more experienced investors. Seen a lot of businesses called cheap at 25-35x over the past week or two.
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The biggest mistake young value investors make:
Not knowing what "cheap" is.
- 8x EV/FCF is NOT cheap.
- 3x P/E and 75% of net cash is cheap.
The best way to find the latter is to go A-Z.
Nobody is going to show them to you.
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Mother-in-law is an immigrant who makes coffee at Wawa. Her ESOP has something like a 17% CAGR. I love capitalism.
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@Larryjamieson_ @_grojo Having an academician as the CEO probably didn’t help either.
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@_grojo I think they are exiting the investment phase now tho, the large government ownership stake often induces less than stellar execution
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Unfortunately, $GPW.PA is not $TASE. Fortunately, it is 1/5th the valuation.
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The timing of this comment is incredible (though likely not intentional). Just a couple of days after the absolute top.
Only another 45% drawdown to go for those seeking 20 to 25% returns with $CSU.TO while aiming to be as conservative as Leonard.
(don't let me rage bait you)
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@GreensKeeperAM @FirstHillcap The increase in capex seems largely a one off for increasing security of their system and building out their new data biz, no? It was very opaque but I thought it not likely to continue.
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@FirstHillcap Not if they keep spending fast than revenue is growing 🤷 I hope you are right.
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@lhamtil Reminds me of the phrase that all you’ll ever learn about a stock is its past and all you need to determine at a given point in time is its future.
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I began writing this series ~8.5 years ago, and I think it's relevant now given all the AI disruption talk
Lawrence Hamtil@lhamtil
NEW POST - The Value of Lasting Moats fortunefinancialadvisors.com/blog/the-value…
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@easyfinanceguy @F_Compounders Inflation was rampant in most of the 70s.
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@F_Compounders wow they jacked prices harder than the cable companies
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See’s Candies Financials from 1972- 1983
Look at the increase in Price per Pound- now that’s pricing power
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@lhamtil If you haven’t already seen it, that Greg Maddox documentary is worthwhile. There is a good segment where they get Bonds’ perspective of at bats against Maddox that shows his baseball IQ well.
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I'm not sure another athlete dominated his sport the way Barry Bonds dominated baseball in the early 2000s
Rob Friedman@PitchingNinja
Chipper Jones discussing Barry Bonds: "He's the best player I've ever seen don a baseball uniform. There's not even a close second. He plays for the Galactic All Stars and we're down here on Earth somewhere."
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One of my favorite FinTwitisms is when someone declares a stock to be trading at a multiple of future earnings or free cash flow as though it’s predetermined.
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