CashFlow Ledger

A stock trading at 8x earnings feels safe. Wide margin of safety. Low downside. Classic value play. Except — most of the time — it's a trap. Here's what made Charlie Munger Billions. 🧵

Markets can remain inefficient longer than expected, and not every good business gets rerated. The real edge is: Buy great businesses at reasonable prices—and give them time.

That said, the core of the thesis is still the business itself. If you own a genuinely high-quality company: Even if valuations don’t expand, earnings growth compounds your wealth which will be paid by increasing dividends. Time works in your favor, not against you.

To earn multibagger returns, you don’t just need a good business—you need a good business that the market hasn’t fully recognized yet. What Really Creates Multibagger Returns? 🧵

If everyone already knows it's a great business, that knowledge is already in the price. The opportunity is never in the obvious. It's in the good business that's going through something temporary that looks permanent to everyone else.

Highly Recommend reading "Little book that builds wealth."

Moat Type 4: Intangible Assets Licenses that block competition, Patents with real enforcement teeth, Brands where premium pricing is sustained not just claimed. Test for brand moat: can the company raise prices consistently above inflation without losing volume? Colgate can. A generic FMCG brand cannot.

"Moat" is the most overused word in investing. Many investors claims to own moaty businesses. Almost nobody defines it precisely. Let's fix that. 🧵

@abhisheknaironx To afford real estate one must actively search in outer region. Just like stock you must hunt for potentially good lands/properties.

25k salary: > 1000rs SIP into Nifty50 > crypto is a scam > can't afford real-estate 50k salary: > no SIP > 5000rs in meme coins > can't afford real-estate 2L salary: > 25k SIP in Nifty50 > 25k SIP into BTC > can't afford real-estate 5L salary: ???

A dividend is only as good as the business behind it. A 7% yield from a business with declining ROCE and rising debt isn't income. It's the company returning your own capital to you slowly.

Word "Competitive advantage" gets thrown around in every pitch deck and fund letter. The actual test is simple: can this business raise prices next year without losing customers? If the answer is yes, reliably, year after year that's a moat. Everything else is just story.

@sunilgurjar01 Warren

Choose one investor to learn from 👇 Warren Buffett Rakesh Jhunjhunwala Radhakishan Damani

Leverage amplifies everything — returns in good times, destruction in bad ones. A business with high debt and high ROCE looks great in a bull market. In a credit crunch, it becomes a case study.

"Cigar Butt Problem" problem. You find a cigar butt on the ground — one puff left. It's free. Seems like value. But what you actually own is a dying business, a mediocre management team, and zero compounding. One puff. Then nothing.

@InvestInAssets To hold stocks in 50% down you must have conviction. And it only comes when you buy quality businesses with reasonable valuations.

Everybody wants a 10-bagger No one wants to hold when the stock drops 50%

@gurjota I think it is easy to outperform nifty simply by removing businesses that require continuous reinvestment to keep up its operation. Just like Bharti see :

If your financial advisor told you Nifty gives you 12% CAGR, they lied to you. If your retirement planning is based on Nifty giving 12% CAGR, you're in for a rude shock. Returns in next 15-20 years are likely to be same or lower than the past. Plan wisely.