Tag: value investing

Long feedback loops and short feedback loops

Good businesses have the following characteristics: High return on invested capital (ROIC), long growth runway, with a wide moat.

Terry Smith is often referred to as the "English Warren Buffett."

Warren Buffett 2021 letter has dropped!

I am often asked how to value a company. In this post, I went back to basics and explained it in first principles.

 A good friend asked me what were the lessons I learned from this volatile period, and just to be clear, by volatile I mean drawdown. Nobody really calls out volatility when stocks are rising

In this podcast, I share about my journey, the investment framework I favors, how I looks at loss-making companies as well as my thoughts on Chinese stocks such as Alibaba.

Marathon Asset produced several iconic investors such as Nick Sleep and Jeremy Hosking. Their letters from 2002 to 2015 provided a treasure trove of insights into their investment frameworks and how they look at the capital cycle. Here are my main takeaways.

I will go through these two styles of investing with real-life case studies. Get ready to go beyond theory and dive into application.

Using the gross profitability method, a dollar invested in the market between 1973 to 2011 grew to over $80. While the same dollar invested in businesses that have high gross profitability (i.e. above 33%) grew to $572 in the same period.

Reading the financial statements may be daunting for beiginners. This post will bring you through revenue, cost of goods and gross profit with case studies such as Costco, L Brands, Ulta and Ferrari!

Operating leverage is a measurement of how an additional dollar of sales translates into operating profit. A 10% increase in sales may result in a 30% increase in net profits. Likewise, a 10% decline in sales may send a company's earnings into oblivion.