According to the Federal Reserve and U.S. Department of the Treasury, foreign countries held a total of 7.03 trillion U.S. dollars in U.S. treasury securities as of March 2021. Of the total 7.03 trillion held by foreign countries, Japan and Mainland China held the greatest portions. China held 1.1 trillion U.S. dollars in U.S. securities. Japan held 1.24 trillion U.S. dollars worth. Other foreign holders included oil exporting countries and Caribbean banking centers.
In 2020, the United States had a total public national debt of 26.95 trillion U.S. dollars, an amount that has been rising steadily, particularly since 2008. In 2019, the total interest expense on debt held by the public of the United States reached 404 billion U.S. dollars, while 170 billion U.S. dollars in interest expense were intragovernmental debt holdings. Total outlays of the U.S. government were 4.45 trillion U.S. dollars in 2019. By 2025, spending will reach 5.45 trillion U.S. dollars.
Why USA cannot default on its debt inspite of such high levels and what can be the potential triggers for happening the same???
Yen Liow - Oxford University Alpha Fund conversation 7th June 2021
Take away:
We don’t like fair flight.
Moat is the cursor but the real thing is the growth algorithm (free cash flow and dividend growth as far as possible)
Moat: Everybody talking about, but we should know who creates it and what is evidence it’s exist
A. Competitive win rate: You win more
B. Pricing power: If there is no pricing power there is no moat; gross margin is stable for moat company
C. High return on incremental capital
My addition: Coca Cola has a high moat - like it’s difficult to enter in the field but coke as a company and stock has no growth. It was 40 USD in 1998 and it’s 50-54 now. It’s value destroyers. On other side TCS or Dr Lal or Apollo has no restriction of entry. Anyone can enter the field easily. For TCS it has a real moat; as it manages committed net margin.
Growth algorithm
Mistake: Pandora media (Music and podcast delivery) (Pandora - About Pandora)
Pandora media – Push version of spotify. When spotify came competitive win rate got down. For Spotify others create music whereas Pandora they create it.
We should have 20% earning visibility
Q: What to be with mature business which generates good cash and give back in terms of dividend (Indian ex TCS)
Ex. Charter communication – broadband connectivity company and cable operator and Dollarama (value retailer).
They do not continue to reinvest capital but start spinning cash, now the company has 3 choices; pay dividend, buyback or M&A. Hence even if top growth is reasonable, you need to take total return in consideration with 3 possibilities as mentioned.
Q: Vail Resorts – Resort company. Reduced ticket price significantly. Companies consideration was that volume growth will make for a reduction in price. How do you look?
Ans: It’s an analogy business. In the Digital world/software product business their gross margin is very high, sometimes 90%, there is no relation between pricing power and volume. In resort or hotel, business price and volume are linked. They have a perishable inventory like a hotel. Hence have to manage the balance between demand and price. Vail reduced price not due to pressure but willingly considering both the factors in the interest of its client.
Q: Exit strategist
Ans:
When we wrong
Already paid thesis, but it’s really hard
Need of capital from one part
Risk limit
Q: Position sizing
Ans: 3-5-7-10-12
Enter in 3-5 of PF. We wait for 6-12-18 months. We go 7% if we found a winner else we churn. We got to 10-12 if we found company really good.
Q: Investing model
Monopoly or oligopoly
TAM: Total addressable market
That gives you revenue growth and cash flow generation.
Example: Brought Microsoft Q4 2018 (Down from $ 115 to 100 - due to various reason). Purchased as it was really cheap and growth consensus was high including Hugh TAM. But the market was not looking to numbers at that time hence it was down by 15%.
There was mention of Our Companies | Constellation Software - Co acquired 6 software companies in various fields and help in growing. It’s like a holding company.
Note: The note is taken for my own record hence it may have mistake and not in particular flow and importantance.
You may like it if you want to understand the thought process of a successful investor.
Absolutely amazing article written by Morgan Housel. His biggest asset is to convey the points with simple narrative but with pin point precision. Highly recommended.
Just stumbled upon a YouTube podcast channel featuring chat with traders. There are 200+ podcasts there but one may listen to whatever one likes. Its like the web version of Market Wizards book. The difficulty of conversations is of intermediate level and one needs some investment/trading experience to correlate with what they are talking about. There are many conversations in multiple subjects like trading psychology, swing trading, momentum, mean reversion etc and one can listen as per liking.
The valuation of new gen stocks has been a topic of much debate in the last few years, especially since the FAANGs rose to prominence in the U.S. In India, this debate has mostly been confined to the PE / VC space so far. But with Zomato IPO scheduled to open and others like PayTM waiting in the queue, this will become mainstream here too. In this video (dated 2015), valuation guru Prof. Aswath Damodaran shares his views on valuation of such stocks. Worth listening.
I like the video presentation - I like hence posting.
Note: You can watch free but need to login (register).
Am not anyway linked with ICC.
Take away:
Identify the sector
1996-2000 Technology, 2003-07 Infra & Real estate, 2010-15 consumer, 2015-2020 NBFC
How to identify:
High sales growth, High-profit Growth, Margin expansion, PE>2-3x, earning visibility for 2-3 yrs
How its going to end? – How long rally on, extend of PE expansion
PEAD – Post earning announcement driff
Most imp for stock is earnings
Example: divis, angel broking and HIL
Debt Reduction: Its lower interest out flow and increase profit and EPS
Ex: Reliance, radico khaitan
52 week / All Time High across sectors
Ex: Metals, API, Mid & Small cap IT
IPO:
Under owned (MF, FII don’t have allocation), Less float
Ex: CAMS, CDSL, Gland and happiest mind
Low capacity utilisation/ general pessimism
Ex: Metals / Sugar
52 Weeks low with insider buying
Imp: People sales share for many reason but people buy for only one reason (expect to go up)
Promoters buying at 52 weeks low
Ex: Chandra Buying Tata commu; Filatex promoter increasing stake
Quality Business when entire market is down
Like Nestle, Asian Paints, Kotak, Titan (HDFC B, HDFC, Infy, Pidilite)
Purchase when the entire market is down.
Optionality: Good management finds never revenues ways like
Amazon – AWS; Apple from ipo to iphone to mac to watches to car.
Margin of safety:
Can this stock be down 50% after 3 yrs?
Ex: HDFC B say available at PE 20 and have growth 20%
Not possible to be 50% in 3 yrs; whereas its possible for high PE stock like D mart.
Purchase those during deep corrections. The thinking gives you confidence of buying.
Change in Management:
Ex: Chandra with Tata Group; CG power with Murugappas & Aditya Puri with PNB HF.
Small caps- it moves at both extremes in bull they are over valued and in bear they are extremely undervalued
Best way is to buy small cap MF
Game of margins:
Margins tell story where the business in its cycle. See-saw lower to high margin
Ex: Hawkins and Avanti
ROCE Delta:
Common in all multibaggers – Improvement in ROCE – single to double digits
Ex: Avanti, GPIL
It can be due to chg management, demand back or margin expansion.
Find the reason and you have high conviction
Conclusion: Those are patterns not true 100% all the times
When to sell – opposite reason of buying
Found this website they have launched it in Beta version for now.
It covers most of the markets from US to Indian Markets.
Verified Financials for some Indian companies seems pretty accurate their financial ratio section is quite useful.
Apart from this there are some features like screening at global level companies also tracking of some prominent funds and investor is also available in it to name a few Berkshire, Pabrai Investment funds and many others.
I hope this website help many Investors from Valuepickr community in their Investing journey.
Very interesting report[1] by Roland Berger on EVs →
The electric vehicle (EV) market finally took off in 2020, with sales, market share and other industry indicators all hitting record highs. EV penetration more than tripled between 2017 and 2020 to reach 4.7% of total vehicle sales, according to the latest Automotive Disruption Radar (ADR),a twice-yearly report that tracks 26 automotive indicators across 18 countries. The ADR also found clear signs that it’s not just trailblazers like Tesla that are pushing the shift towards EVs – traditional automakers are now also making potentially game-changing advances and investments."
There is a massive surge in EV purchases in Europe (2020 vs 2019)
As always , great watch …fascinating story of how your kids emulate what you actually do & not what you tell them to do …great nuggets of information in this …Vishal Khandelwal rocks !!
