Will Brown

Quote of the Day (not from Darwin): "The longer a fool enjoys how even the Most Provable Lie makes him FEEL, the more it becomes — to him — the Unshakable Truth."

Here is the "Doonesbury" cartoon that Gannett removed from ALL of their newspapers this past Sunday. That's almost 400 news papers including USA Today. dailycartoonist.com/index.php/2024…

Hey @F3_ZeroHour Your Q tomorrow is.....

@richfalkwallace Please share!

An entire MBA fits on one page. But you better know the math cold. Like & comment if you want the excel. 6 topics: *1) Unit economics* This builds from product-level unit economics to company financials. Quantity per unit, growth in units. Price per unit, growth in pricing. Cost per unit, marketing spend per unit. Get you return on ad spend (ROAS), customer acquisition cost (CAC), LTV/CAC, gross margins, unit contribution margins, and more. This model sets up two diverging products: A higher gross margin (GM), higher marking cost, low pricing power, low growth product. Against a lower GM, better pricing power, better growing, lower unit market cost product. To show how the dynamics of the two play out over time. *2) Accounting* Unit drivers flow into revenue, variable COGS, and variable SG&A. Then to EBITDA, EBIT, EBT, Net income & EPS. Simple cash flow statements & balance sheets reconcile D&A to inflation-adjusted replacement CapEx, debt levels, & GAAP PP&E. You have to be fluent in accounting to look at public companies. Not because accounting itself matters. But because accounting can obscure what matters. And your task it to translate GAAP into meaningful business logic. *3) Operating ratios* Unit drivers output financials, financials output overall business ratios. Revenue growth, EBITDA growth, EBITDA margins. Contribution margins (= change in profit over change in revenue). Net debt-to-EBITDA, net debt % of EV. *4) Valuation* You can drive valuation on multiples or a DCF. Which are equivalent: The discount rate minus the growth rate determines the 'terminal multiple.' Using a P/E instead of a DCF simply uses next year as the terminal value. This model drives value from the DCF, and maps that to the multiples to show how they connect. *5) Corporate finance & DCFs* DCF math attached using the CAPM. The summary is a beta from historical returns, add the cost of debt. To get the WACC - the theoretically correct discount rate. DCFs are extremely assumption laden - you can get out almost whatever you want. But realistically. Your banker (or analyst) will make the math work out to a 7-13% discount rate. Depending on the risks, industry, markets - and what they want to achieve. *6) Sensitivities & the hard part* The last section sensitizes the equity value and multiples to unit and price growth. Bringing unit drivers full circle to valuation outcomes. Ultimately, the hard part isn't the math. You have to be fluent in the math, its nuances and its limitations. If not, you will lose out to those who are. But once you are, you also have to shift focus. To the hard part. Which is always in filling in the numbers. If you're investing, that means thoughtful views on unit drivers; on how, when, and why they shift. And if you're building, it means making the numbers on the page happen. That's all for now. Like & comment if you want the excel.

@F3_ZeroHour 7 strong.

@WSBIII leads the week off. Come out and play at Jaycee.

@F3ScreenTime @F3_ZeroHour

Everyone’s favorite Dawg @F3ScreenTime has the Q tomorrow 0530.

@F3WolfRun Yes?

wolf @WSBIII

@hathcockroyce @F3_ZeroHour @F3Raleigh Well, you can see into the future.

@WSBIII @F3_ZeroHour @F3Raleigh Yes I thought I was signed up to Q so I did it.

Looking for a few good Q’s. @WSBIII leads the way tomorrow. Come join us at Jaycee.

@hathcockroyce @F3_ZeroHour @F3Raleigh I just saw it. Hope you went because I slept through my alarm.

@F3_ZeroHour @F3Raleigh @WSBIII I thought I was on the sheet. Oops sorry 😮😳😱

@hathcockroyce @F3_ZeroHour @F3Raleigh I was there in spirit.

@F3_ZeroHour @F3Raleigh I have never once been to Zero Hour when Marley wasn’t there. I am concerned did he take a day off? Is he out of town? Did he duck the Yoda Q? Did he go to Broga or stair city? Is he having coffee with King David? Ducking Mr Furley and Panty Hose? Also no Ninja 🥷 …👀

He’s back. Back again. @hathcockroyce leads the way at ZH tomorrow.

The Wildcats defeated Stetson this Saturday. @B_Fork King David will be leading @F3_ZeroHour in one of these.

Madison Cawthorn doubled down on his extremist remarks that Anthony Fauci should be prosecuted. This is fomenting division & conspiracy theories. Today I’m doubling down. I’m going to defeat him, so we never hear “Congressman” before “Madison Cawthorn” again. RT if you’re with me

I can see clearly now the rain is gone. @WSBIII Marley is the Q tomorrow. Come join the fun.

Eat up your spinach tonight. @Popeye_F3 is your @F3_ZeroHour Q tomorrow. 0530. Jaycee Park.

Ladders, cones and beach. All in one workout? @WSBIII Marley has the Q tomorrow at @F3_ZeroHour. 0530.

@F3_ZeroHour Men I have contracted a massive head cold overnight. You are on your own this morning.

@BurgerFeetPhil leads the ceremonies tomorrow morning at @F3_ZeroHour. Come get your dogs going for a sizzling good time.

@Bojangles Raleigh, NC

We're feeling random 🥰 Reply with your city for a chance to win a Bojangles delivery on us TONIGHT! #RandomActsofKindnessDay

Start your year off right with @F3_hottubtimeM. Step up your game.