Outsized Gains

Hypergrowth at an unreasonable price. Fintwit and long term investing lens on tech, saas, vc. Not financial advice 💙💛

[Outsized Gains @OutsizedGains]

Here to learn, share, and laugh.

The investment approach I try to follow:

[Outsized Gains @OutsizedGains]

@JerryCap Apple couldn’t hire the best AI researchers because those people wanted to openly publish everything they came up with. Now the whole industry is no longer open ai, it’s closed ai, and that’s to Apple’s advantage.

[Outsized Gains @OutsizedGains]

@EmmetPeppers Even better, enterprise value

[Outsized Gains @OutsizedGains]

@EmmetPeppers People don’t understand what a moat is. “It gives me cool recommendations” is not a durable advantage.

[Ian Cassel @iancassel]

At least once per year I’ll wake up to a position trading down 30% premarket. Some large holder wakes up grumpy and decides today will be the day to sell their entire position in an illiquid stock as quickly as possible. 

I always wonder what sparks this rage filled seller. Did they wake up on the wrong side of the bed? Was it a nightmare about the stock? Did the seller find out the CEO flirted with his wife at a cocktail party? Did they get back from a meditative retreat where they became enlightened? Do they hate me personally? 

The worst part is they are rude about it. The seller decides to slap some bids in pre-market trading. Indiscriminate pre-market selling scares all the longs. Are they raising capital? Did they lose a large customer? Is it a short report? Accounting irregularities? The market freezes. Everyone is thinking , “someone knows something”. 

By the time the regular session opens for trading there is no bid support. The bid ask spread is a mile wide and Level 2 (market depth) looks literally like Level 2 – two levels of support to Zero. 

While pointing at yourself in the mirror you say some positive words of affirmation, “I’m a man (or woman). I’m knowledgeable. I can do this.” You swallow the throw up in your mouth.

You place a buy order below market hoping it doesn’t get hit. But it gets hit. As you stare at the executed trade notification, you throw up in your mouth again. “Well, I don’t need breakfast”. 

The opportunity presents itself for seconds, minutes, hours, or maybe days. While most investors freeze, you are decisive. You buy the pain. The only reason you can find the courage is because you did the work others didn’t do and you trust management.

99% of the time in investing you need to be a stoic investor. The other 1% you need to be a savage. 

Then the madness stops. The stock recovers. Everyone that wasn’t buying near the lows starts to buy 30% off the lows so they can mentally tell themselves they bought the dip even though they didn’t buy the real dip.

https://t.co/dyy9PQiH7T

[Outsized Gains @OutsizedGains]

@marketplunger1 $JOBY hated because public investors don’t like science experiments, trained for extreme loss aversion.

I think it’s good r/r, I like some exposure to positive tail risks, and size accordingly ie well below 1%.

[Outsized Gains @OutsizedGains]

Can we talk about how weird it is for the CEO of a $58B company to be a total enigma. Is he an AI? Time traveler?

[Outsized Gains @OutsizedGains]

@clickyricky @QCompounding Milked that cash cow

[Nick Gerli @nickgerli1]

1) What's scary for the US Housing Market is just how many Airbnbs there are.

Data from AllTheRooms shows 1 million Airbnb / VRBO rentals.

Compared to only 570k homes for sale.

Creates huge home price downside if struggling Airbnb owners elect to sell.

[Liberty 💚🥃 @LibertyRPF]

Google's AI superweapon? Youtube:

[Outsized Gains @OutsizedGains]

Like the web, AI is a real one. It will bounce back after the inevitable crash that’s coming when hopes for an overnight revolution are dashed.

I’m cashed up on the sidelines waiting for the trough of despair to set in.

[Outsized Gains @OutsizedGains]

@kieranpeppiatt @Miles_Brundage Biggest hurdle is contamination. Since the meat has no immue system, a tiny spec bacteria spoils the whole batch. The sterile environment required is challenging, but can hopefully be overcome with enough R&D.

[Miles Brundage @Miles_Brundage]

I suspect people underestimate how quickly lab meat will become a thing

[Outsized Gains @OutsizedGains]

To predict where $META is going, I studied 7 years kickboxing with Tibetan monks, got a black belt in Brazilian Jiu-Jitsu and played Beat Saber until the battery ran out.

Here’s what you need to know 👇 (1/56)

[Nick Davidov @Nick_Davidov]

Some AI unicorns might start failing soon - I don’t wanna be that guy on a Saturday morning, but I think I know at least 2 companies that raised at $1B+ valuations, burned through cash, and are now struggling to deliver.

[IvanaSPEAR @IvanaSpear]

A company's earnings report makes up almost 80% of its price action.

Your ability to manage risk on earnings is key for capturing alpha.

I've worked at hedge funds like Citadel and Millennium that generate significant alpha from earnings.

Here is how to do it:

[Outsized Gains @OutsizedGains]

@IrnestKaplan As it should

[Outsized Gains @OutsizedGains]

Sticky revenue without subscriptions:

[Jamin Ball @jaminball]

Growth adjusted revenue multiples (EV / NTM Revenue / NTM Growth) are back to where they were pre-covid (in graph below).

Meanwhile, the NTM Revenue multiple (not growth adjusted, and not shown in the graph) is ~45% below where it was pre-covid

[Jamin Ball @jaminball]

This is exactly right! The desire to integrate AI will drive enterprises to adopt cloud systems faster - in particular cloud data infrastructure. Data is the key to unlocking true differentiation with AI, and when that data is locked up in on prem systems it's more challenging

[Outsized Gains @OutsizedGains]

@paulcerro $PG $UL $KO