Rose Ceilna Invastrnamts🌹
102 posts
BREAKING NEWS!
$DLO stock is down 0.48% today! 🌹
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Reminds me of the guy on here who lost $10m and found god 🤦♂️
LTR@0xLTR
Koreans are different man
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In bed nursing a fever. Ask me anything — GO! 🌹
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The biggest risk in AI isn’t demand slowing. It’s supply catching up. Today, access to GPUs is a competitive advantage. Tomorrow, it may be a commodity. When scarcity disappears, valuations built on scarcity will disappear with it so don’t confuse scarcity with a moat. 🌹
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The irony is that doing nothing is often exactly the right decision. Every average investment you make reduces your ability to buy an extraordinary one when it finally appears. Opportunity cost rarely feels painful today, but over a lifetime it can become one of the biggest drags on your returns.
I’ve always believed patience is one of the greatest competitive advantages in investing. It doesn’t require a higher IQ, a better education, or access to information that nobody else has. It simply requires refusing to lower your standards because the market happens to be open.
Great businesses aren’t that rare. Great businesses offered at sensible prices are. That’s why finding something worth buying every day, every week, or even every month should probably make you question your standards rather than congratulate yourself on your brilliance.
The market will always give you thousands of stocks to choose from. Your job isn’t to own as many of them as possible. Your job is to wait until someone offers you an extraordinary business at a price that finally makes sense. That’s much harder, and that’s precisely why it works.
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2/2
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The Illusion of Opportunity
Imagine you and I became business partners and decided to buy rental properties in Manhattan. Before looking at a single apartment, we agreed on one simple rule. The economics had to make sense. If our total monthly costs were $5,000, we wanted at least $6,000 in rent so we’d earn a reasonable profit.
Now imagine we started searching today. What are the chances we’d actually find a property that met those standards? Probably very small. Even if we worked hard, called brokers every day, analyzed hundreds of listings, and spent months searching, we’d probably find very few truly attractive opportunities in an entire year.
That shouldn’t surprise anyone. Every apartment requires a willing seller, and most sellers aren’t stupid. They generally want the highest price they can get, just like you would if you were selling your own apartment. Great properties offered at sensible prices are rare by definition.
Now let’s compare that to the stock market. Somehow investors believe bargains appear every day. They feel like they should always be buying something, even if they only looked at a company for fifteen minutes. I think that’s one of the biggest mistakes investors make.
The stock market hasn’t created more opportunities. It has simply made buying easier. Today you can become a part owner of almost any business in the world with the click of a button. The ease of buying tricks us into believing opportunities must also be easy to find.
Think about buying an engagement ring. If I told you to go shopping this afternoon, would you honestly expect to find an incredible diamond at half price? Probably not, because valuable assets rarely go on sale without a very good reason.
The same is true if I asked you to buy a Ferrari, a Picasso, or an apartment overlooking Central Park. You wouldn’t assume the seller suddenly decided to become generous. You’d assume the price was probably fair unless you discovered something everyone else had missed.
Stocks aren’t any different. Every share you buy has someone else choosing to sell it. Sometimes that’s another individual investor. Sometimes it’s a hedge fund, pension fund, or institution with billions of dollars and hundreds of analysts. That doesn’t mean they’re always right, but it should make you stop and think.
Instead of asking yourself, “Why should I buy this business?” ask a different question. “Why is someone willing to sell me part of this wonderful business at this particular price?” That’s a much harder question, and it’s usually a much more important one.
I think the biggest reason investors overtrade is because buying stocks is almost frictionless. If buying a business required months of meetings, lawyers, inspections, financing, and paperwork, we’d all become much more selective. Instead, we mistake convenience for opportunity and lower our standards without even realizing it.
Sometimes we also fool ourselves with randomness. A stock falls twenty percent, and we immediately convince ourselves it’s cheap. Another stock rises thirty percent, and we convince ourselves we missed the opportunity. Neither conclusion necessarily has anything to do with value.
The world’s best real estate investors don’t buy twenty buildings every year. The world’s best private equity firms don’t acquire companies every month. They spend most of their time waiting because they know extraordinary opportunities are rare.
Why should the stock market be any different? Most investors don’t suffer from a lack of opportunities. They suffer from a lack of patience. They feel uncomfortable holding cash, uncomfortable waiting, and uncomfortable watching others make moves while they do nothing.
1/2👇
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The easiest way to improve returns is often to make fewer decisions. 🌹
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Your portfolio eventually becomes a reflection of your temperament. 🌹
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If you had to guess, what percentage chance would you give that there’s an afterlife? 🌹
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I have an hour to kill, let’s play ask me anything — GO! 🌹
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Those opportunities are uncommon. They may not appear every year, and sometimes they don’t appear for several years. Investing isn’t about finding dozens of bargains or hundreds of trades. It’s about recognizing the handful that can truly change your financial future.
You don’t need 25 successful investments. You probably don’t even need 10. 3 extraordinary investments held for a very long time can create more wealth than a lifetime of constantly chasing average opportunities.
Think about $BRK decades ago. Think about $WMT in the 1980s, $MSFT in the 1990s, $AMZN after the dotcom crash, or $MELI during periods of fear including the current one. Missing dozens of ordinary bargains wouldn’t have mattered very much if you owned just 1 businesses like these.
Many investors focus on how much they might lose by paying a little too much. Very few focus on how much they might lose by never owning a great compounder at all. Opportunity cost is invisible, which is precisely why it’s so dangerous.
People celebrate saving 15% on the purchase price. They rarely calculate what it cost them to miss a business that compounded at 20% annually for the next twenty years. Sometimes the biggest investing mistake isn’t overpaying. It’s refusing to pay a fair price for an extraordinary business.
Here’s another interesting thought. A margin of safety can actually grow after you buy. As a great business continues increasing its intrinsic value year after year, the difference between what you paid and what the business is worth keeps widening. With a melting ice cube, the exact opposite happens.
The world’s greatest products are almost never on clearance. $RACE doesn’t need to discount its cars. $RMS doesn’t put Birkin bags on the clearance rack. Rolex doesn’t beg customers to buy its watches. Yet investors somehow expect the world’s greatest businesses to regularly go on sale.
Imagine walking through the Louvre and refusing to buy a masterpiece because you were waiting for the price to fall another 10%. Years later, the painting is worth ten times more, yet you’re still congratulating yourself for being disciplined. Sometimes the pursuit of a slightly better deal blinds us to extraordinary value standing right in front of us.
None of this is an argument for ignoring valuation. Quite the opposite. A significant margin of safety remains one of the most powerful tools an investor can have because it increases the odds in your favor and forgives mistakes. But we should never confuse the pursuit of a lower price with the pursuit of a better investment.
The greatest investors weren’t obsessed with paying the lowest possible price. They were obsessed with buying extraordinary businesses and waiting patiently until the odds were overwhelmingly in their favor. When those rare moments finally arrived, they acted decisively.
I’d rather own one extraordinary business purchased with a meaningful margin of safety than make fifty successful trades. Great investing isn’t measured by how many decisions you make. It’s measured by how many extraordinary opportunities you recognized.
End/🌹
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The margin of time
Most investors believe the margin of safety is simply buying a stock below intrinsic value. That’s true, but it’s also incomplete. The greatest investors understand that a margin of safety is far more than just a discount.
The irony is that many investors become so obsessed with paying the perfect price that they completely miss extraordinary businesses. They spend years waiting for a stock to fall another 10% or 20%, only to watch it compound fivefold without them. They didn’t lose because they overpaid. They lost because they never owned greatness.
The market doesn’t owe you your price. It doesn’t know what price you wrote on your watchlist, and it certainly doesn’t care. Sometimes your limit order is simply evidence of stubbornness disguised as discipline.
This is where I think many investors misunderstand the margin of safety. There isn’t just one. There are at least four. There is a margin of safety in price, in the quality of the business, in management, and perhaps most importantly, in time.
An extraordinary business has its own built in margin of safety. Great management can recover from mistakes, dominant competitive advantages can withstand recessions, and high returns on capital create value year after year. Those qualities protect investors in ways a cheap price alone never can.
A mediocre business selling at half of intrinsic value may actually have less margin of safety than an exceptional business selling at a premium. Why? Because intrinsic value itself may be shrinking. Cheap is not the same as safe.
Time may be the greatest margin of safety of all. If a business compounds intrinsic value at 20% or 25% for decades, time has an incredible ability to erase valuation mistakes. Paying somewhat too much for a phenomenal business often produces a far better outcome than buying an average business at an enormous discount.
That doesn’t mean valuation doesn’t matter. It absolutely does. Paying less is always preferable to paying more, all else being equal.
The ideal investment isn’t simply a wonderful business. It isn’t simply a cheap business either. It’s the rare moment when an extraordinary business temporarily becomes available at an extraordinary price.
Those opportunities are uncommon. They may not appear every year, and sometimes they don’t appear for several years. Investing isn’t about finding dozens of bargains. It’s about recognizing the handful that can truly change your financial future.
You don’t need fifty successful investments. You probably don’t even need ten. Two or three extraordinary investments held for a very long time can create more wealth than a lifetime of constantly chasing average opportunities.
Think about Berkshire Hathaway decades ago. Think about Walmart in the 1980s, Microsoft in the 1990s, Amazon after the dot-com crash, or MercadoLibre during periods of fear. Missing dozens of ordinary bargains wouldn’t have mattered very much if you owned just a few businesses like those.
Many investors focus on how much they might lose by paying a little too much. Very few focus on how much they might lose by never owning a great compounder at all. Opportunity cost is invisible, which is precisely why it’s so dangerous.
People celebrate saving 15% on the purchase price. They rarely calculate what it cost them to miss a business that compounded at 20% annually for the next twenty years. Sometimes the biggest investing mistake isn’t overpaying. It’s refusing to pay a fair price for an extraordinary business.
Here’s another interesting thought. A margin of safety can actually grow after you buy. As a great business continues increasing its intrinsic value year after year, the gap between what you paid and what the business is worth keeps widening. With a melting ice cube, the exact opposite happens.
1/👇
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The world’s greatest products are almost never on clearance. Ferrari doesn’t need to discount its cars. Hermès doesn’t put Birkin bags on the clearance rack. Rolex doesn’t beg customers to buy its watches. Yet investors somehow expect the world’s greatest businesses to regularly go on sale.
Imagine walking through the Louvre and refusing to buy a masterpiece because you were waiting for the price to fall another 10%. Years later, the painting is worth ten times more, yet you’re still congratulating yourself for being disciplined. Sometimes the pursuit of a slightly better deal blinds us to extraordinary value standing right in front of us.
None of this is an argument for ignoring valuation. Quite the opposite. A significant margin of safety remains one of the most powerful tools an investor can have because it increases the odds in your favor and forgives mistakes. But we should never confuse the pursuit of a lower price with the pursuit of a better investment.
The greatest investors weren’t obsessed with paying the lowest possible price. They were obsessed with buying extraordinary businesses and waiting patiently until the odds were overwhelmingly in their favor. When those rare moments finally arrived, they acted decisively.
I’d rather own one extraordinary business purchased with a meaningful margin of safety than make fifty successful trades. Great investing isn’t measured by how many decisions you make. It’s measured by how many extraordinary opportunities you recognized when everyone else was looking somewhere else.
Most investors believe the margin of safety is simply buying a stock below intrinsic value. That’s true, but it’s also incomplete. The greatest investors understand that a margin of safety is far more than just a discount.
The irony is that many investors become so obsessed with paying the perfect price that they completely miss extraordinary businesses. They spend years waiting for a stock to fall another 10% or 20%, only to watch it compound fivefold without them. They didn’t lose because they overpaid. They lost because they never owned greatness.
The market doesn’t owe you your price. It doesn’t know what price you wrote on your watchlist, and it certainly doesn’t care. Sometimes your limit order is simply evidence of stubbornness disguised as discipline.
This is where I think many investors misunderstand the margin of safety. There isn’t just one. There are at least four. There is a margin of safety in price, in the quality of the business, in management, and perhaps most importantly, in time.
An extraordinary business has its own built in margin of safety. Great management can recover from mistakes, dominant competitive advantages can withstand recessions, and high returns on capital create value year after year. Those qualities protect investors in ways a cheap price alone never can.
A mediocre business selling at half of intrinsic value may actually have less margin of safety than an exceptional business selling at a premium. Why? Because intrinsic value itself may be shrinking. Cheap is not the same as safe.
Time may be the greatest margin of safety of all. For example, if a business compounds intrinsic value at 20% for a long time, you will end up with a good investment result even if you overpay today. Paying somewhat too much for a phenomenal business often produces a far better outcome than buying an average business at an enormous discount.
That doesn’t mean valuation doesn’t matter because it absolutely does. Obviously paying less is always preferable to paying more, all else being equal.
The ideal investment isn’t simply a wonderful business. It isn’t simply a cheap business either. It’s the rare moment when an extraordinary business temporarily becomes available at an extraordinary price.
2/👇
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You don’t see something like this very often, it’s genuinely remarkable! Credit to @CopyCat_Invest for showing me. Give him a follow🌹
Rose Celine Investments 🌹@realroseceline
When a company grows very quickly, usually it has to invest huge amounts of $ and those investments usually reduce roic bc it’s deploying more $ before the earnings arrive. This biz is doing the opposite and that’s crazy impressive! 🤩 Its roic tripled 🤯 , and earnings are growing faster than the capital it needs to invest, which means every incremental dollar invested is producing much more profit than before. Amazing!!! I’ve never heard of this biz before ima def check it out. Thank you for showing it to me. 🙏 🌹
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Why is everyone crying about $NFLX declining? They are buying back >$20 billion. Any half sensible investor should be hoping the share price stays depressed for as long as possible so they can execute the buyback more advantageously. 🌹
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One of the worst calls I made in recent years was turning bearish on $GOOG near the bottom, although I never owned any shares. Boy did I get roasted for that one, and people still remind me on here almost daily (thank you). After seeing ChatGPT, I convinced myself $GOOG search business was in trouble and I was wrong.
The mistake wasn’t recognizing that AI would change search. It was assuming that technological disruption would automatically lead to economic disruption. Those are two very different things. Great businesses don’t stand still while the world changes around them because they adapt, evolve, and often emerge even stronger.
One of the biggest investing mistakes is confusing a great innovation with a broken business. Technology changes overnight but economics usually change much more slowly. That’s a lesson I’ll never forget... 🌹
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I’ve only met one person from X, and he became a good friend of mine. He’s a great investor, but an even better person. Wishing you a very happy birthday @DimitryNakhla! 🎉🌹
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