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1/x How I choose a company to invest in
(thread)
I try to think about the changing technology trends that actually have evidence of real world application (not lab stuff)
I use screener tools like https://wallmine.com/ or https://stockrow.com/
and search for:
(thread)
I try to think about the changing technology trends that actually have evidence of real world application (not lab stuff)
I use screener tools like https://wallmine.com/ or https://stockrow.com/
and search for:
2/x
Screening Criteria for a Company to Invest in
Leadership position in a new important emerging market
Solid unit economics (not $UBER)
Gross margins that exceed 50%
Growing revenue at a minimum of 40% per year
Recurring revenue model
Growing Total Addressable Market
Screening Criteria for a Company to Invest in
Leadership position in a new important emerging market
Solid unit economics (not $UBER)
Gross margins that exceed 50%
Growing revenue at a minimum of 40% per year
Recurring revenue model
Growing Total Addressable Market
3/x
Modified Rule of 40 score +ve (Google it)
(I use revenue growth+operating margin)
Primarily US listed companies
(but global markets all considered)
Founder led
Secular tailwinds
Trading at a reasonable valuation at the time of purchase
Clear path to profitability
Modified Rule of 40 score +ve (Google it)
(I use revenue growth+operating margin)
Primarily US listed companies
(but global markets all considered)
Founder led
Secular tailwinds
Trading at a reasonable valuation at the time of purchase
Clear path to profitability
4/x
Management with the capability to execute on the opportunity
Investments that have the potential to return the entire value of my original portfolio funding
Able to potentially compound revenue above 30% for 5 years or longer
Clean audits
Annual revenue >$100M
Management with the capability to execute on the opportunity
Investments that have the potential to return the entire value of my original portfolio funding
Able to potentially compound revenue above 30% for 5 years or longer
Clean audits
Annual revenue >$100M
5/x Market cap $250M - $10B
Attractive risk-reward on the chart
Stock value >$10 USD
Insiders hold >10%
Accelerating revenue growth
Improving operating metrics
Attractive risk-reward on the chart
Stock value >$10 USD
Insiders hold >10%
Accelerating revenue growth
Improving operating metrics
6/x
Some degree of margin of safety
I can understand and refute the fully bear case
Awareness of lockup expiration risk
Macro / geopolitical headwinds considered
It's better than a company I already have in my portfolio
I can explain what the company does to my wife
Some degree of margin of safety
I can understand and refute the fully bear case
Awareness of lockup expiration risk
Macro / geopolitical headwinds considered
It's better than a company I already have in my portfolio
I can explain what the company does to my wife
7/x
Not all these are my ideas
I am learning from a lot of great investors out there - you don't know me, but I appreciate your posts!
Thanks to
@investing_city
@FromValue
@saxena_puru
@OphirGottlieb
@RamBhupatiraju
@BrianFeroldi
@richard_chu97
@afc
Not all these are my ideas
I am learning from a lot of great investors out there - you don't know me, but I appreciate your posts!
Thanks to
@investing_city
@FromValue
@saxena_puru
@OphirGottlieb
@RamBhupatiraju
@BrianFeroldi
@richard_chu97
@afc
8/x
13Fs can be a great source of ideas/confirmation
For example
Abdiel Capital
https://m.holdingschannel.com/13f/abdiel-capital-advisors-lp-top-holdings/
Light Street Capital
https://www.holdingschannel.com/13f/light-street-capital-management-llc-top-holdings/
Podcasts like Motley Fool RB
There are some great subscription services inc
CMLPro
Ticker Target
What else do you use?
13Fs can be a great source of ideas/confirmation
For example
Abdiel Capital
https://m.holdingschannel.com/13f/abdiel-capital-advisors-lp-top-holdings/
Light Street Capital
https://www.holdingschannel.com/13f/light-street-capital-management-llc-top-holdings/
Podcasts like Motley Fool RB
There are some great subscription services inc
CMLPro
Ticker Target
What else do you use?
9/x
The US Motley Fool site
is also a good source of ideas and articles with a lot of free content
For some reason I don't get much value from the UK
version
I've been wondering about trying out their subscription SA/RB services
Unsure of the added advantage over others
The US Motley Fool site
is also a good source of ideas and articles with a lot of free content
For some reason I don't get much value from the UK
versionI've been wondering about trying out their subscription SA/RB services
Unsure of the added advantage over others
10/x Fintwit is great for helping with mental frameworks
and understanding how experienced investors think
But it's no substitute for doing the work
Understanding your own risk tolerance
and thinking for yourself
and understanding how experienced investors think
But it's no substitute for doing the work
Understanding your own risk tolerance
and thinking for yourself
11/x almost forgot to add
Capital light
Low marginal costs of sale and distribution
....
As a result, my portfolio is
heavily cloud software based
But I'm interested in hearing
what I might be missing
That fits my stated criteria....
Thanks if you made it this far
Capital light
Low marginal costs of sale and distribution
....
As a result, my portfolio is
heavily cloud software based
But I'm interested in hearing
what I might be missing
That fits my stated criteria....
Thanks if you made it this far
