This quote is such a simple concept, but I really think it is one of Charlie Munger's great contributions to the value investing world.
One unique insight into a company or investment can be all it takes to become wealthy. Don't underestimate your own intuition.
$BRK.A $BRK.B
If you're new to investing you're probably noticing the word yield used a lot (as in FCF yield, earnings yield, etc.)
It almost always refers to one simple thing: the return you can expect compared to the price you pay.
Think of it like a bond: If you buy a $100 bond at face value that pays 5% interest, you get $5. Your yield is 5%.
Stocks are a bit more nuanced, but the idea is exactly the same:
If a stock costs $100 per share and generates $4 per share in Free Cash Flow, the FCF yield is 4%.
If that $100 stock earns $6 per share in net income, the earnings yield is 6%.
$META now contemplating a similar equity raise to the one $GOOGL just completed to fund AI data center build-outs. No specific numbers yet, but Google raised $85B.
$META stock is down on the news.
@DimitryNakhla Looking at it like the famous "Buffett equity bond" could mean you're getting around an 8% yield after year 3. Assuming competition doesn't get in the way.
I found this to be a helpful article for anyone looking to understand $CELH
Specifically, why do the numbers look good, but the stock is down so much?
John Fieldly, CEO addressed concerns at recent conference and this article shares the highlights
https://t.co/lrtBdbIV5G
@thekostadinoff@BourbonCap Appreciate the reply! It's a fact that stablecoins might not impact $V and $MA. I'll be the first to admit I don't know what will happen or how it will play out. But it is technology that CAN go around the companies, whereas that technology wasn't a threat in the past.
Nikeโs problems started a long time ago. Even before they alienated their retail partners, $NKE missed out on sponsoring Steph Curry because a Nike exec mispronounced his name. This was a historic fail as athletes like Michael Jordan and Lebron are vital to their brand.
On Monday we announced an equity offering for Alphabet - part of our multi-year investment strategy to meet the AI opportunity ahead and support the demand weโre seeing from enterprises and consumers. Pleased to share the offering was well over-subscribed. We raised a total of ~$45B, with an additional $40B to come as part of an โat the marketโ program starting in Q3 (for a total of ~ $85B). A huge thank you to our investors, including Berkshire Hathaway who invested $10B.
Will Greg Abel be the Tim Cook to $BRK.B? Both very efficient and competent operators. Taking the reigns from the "intelligent fanatic" founders (Warren Buffett and Steve Jobs) and growing shareholder value.
Stick to the "four certainties" framework when looking for investable businesses.
Certainty of the cash flows (how predictable)
Certainty of management (how trustworthy)
Certainty of capital allocation (track record)
Certainty of valuation (margin of safety)
PUT A SCORE ON EACH
@realroseceline I find EBITDA more useful for asset light companies, like software. If they don't have a lot of capex then depreciation and amortization aren't as crucial as in an asset heavy business. EBITDA makes no sense to use for companies that invest in a lot of physical assets.