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Why do I own individual stocks?
Thesis:
1. The digitalization of our world has just begun.
2. This megatrend will continue for at least another decade.
3. If you enjoy spending your free time understanding businesses, then the potential for outsized returns is possible.
Thesis:
1. The digitalization of our world has just begun.
2. This megatrend will continue for at least another decade.
3. If you enjoy spending your free time understanding businesses, then the potential for outsized returns is possible.
Why do I invest in High Growth companies?
I strongly feel that they are behind many positive changes in the world. Betting on value is a bet against the planet
. I want to bet on founders who are leading great companies...
I strongly feel that they are behind many positive changes in the world. Betting on value is a bet against the planet
. I want to bet on founders who are leading great companies...
...that improve life, solve problems and enable us to do things better and cheaper.
Let this combination compound over time and bet big on your best ideas.
Let this combination compound over time and bet big on your best ideas.
Secondly, these tend to be companies embracing technology, and luckily this is within my circle of competence for certain industries.
Everything is quantified these days. Don’t try to be too clever. Simple insights can lead to very high investment returns. Good ideas don’t need to be complex.
I want to find the world’s best technology businesses. I try to find companies whose product has or is about to catch on with mass adoption. I like companies led by founder CEO's, who have significant skin in the game via high insider ownership.
I don’t invest in IPO's. Wait until at least the lock-up period has expired. A company has to show me that it can execute under the scrutiny of the public market. You don’t need to be in early. Investing into $FB or $GOOG 2 years after IPO would have made you plenty rich.
I invest in companies that can
1. successfully disrupt an industry with new business models $TTD $SQ $PTON $SPOT
2. further enable the digital transformation with their services and infrastructure $ZS $HUBS $TWLO $SHOP
1. successfully disrupt an industry with new business models $TTD $SQ $PTON $SPOT
2. further enable the digital transformation with their services and infrastructure $ZS $HUBS $TWLO $SHOP
About the only value bet I would make is if an established company successfully transitions into the digital world e.g $DIS $NKE $SBUX
I intend to hold my shares indefinitely and allow my investments to compound over time. I don’t believe that it is possible to time the market. Markets go up and down. I hold on knowing that quality businesses tend to bounce back.
Accept that volatility is part of the game. You need a strong stomach. If you panic, you lose. Be optimistic that things will likely work out in the long run.
The list of reasons to sell is always long. If you have full conviction in your holdings, then no single piece of “infotainment” should make you change your mind. Ignore it + people who make predictions about the economy.
Conviction can only be gained by doing the work. Analyze your holdings at a frequency you are comfortable with. When in doubt, get out. Avoiding risk is fundamental to accumulating wealth. Don’t fall in love with a stock.
Accept that you will have losers. If a position drops 30%, look at whether your thesis is still intact. If it is, it may make sense to add to your position.
Be aware that outperformance will be driven by a small number of your holdings. Don’t sell your winners, add to them!
Be aware that outperformance will be driven by a small number of your holdings. Don’t sell your winners, add to them!
Have the patience to stick with a stock that is moving sideways. You never know when a multiple expansion may kick in. Don’t look at prices every day. Over time, common sense and patience prevail.
I don’t use:
-Stop Loss
-Options
Both are a good way to sabotage your high-growth portfolio.
I don’t want:
Dividends
Hedges
-Stop Loss
-Options
Both are a good way to sabotage your high-growth portfolio.
I don’t want:
Dividends
Hedges
I evaluate
- the underlying business,
- the competitive landscape,
- have an opinion on what the TAM is and if it can grow
- quality of the management,
- their plans, and a proven track record of strong execution against those plans.
- the underlying business,
- the competitive landscape,
- have an opinion on what the TAM is and if it can grow
- quality of the management,
- their plans, and a proven track record of strong execution against those plans.
I need to see intact customer growth, strong and stable, or even improving retention metrics I need to see high gross margins and a clear and believable path towards profitability via positive operating margins and cash flows.
From a bird's eye perspective, the ideal software company has Gross Margin >75%, Rule of 40 >50%, Revenue Growth >40%, with consistent revenue growth numbers over several years, at a reasonable EV/Sales valuation
Good luck finding this combination in today’s market.
Good luck finding this combination in today’s market.
I used to think an EV/Sales of 10 is reasonable for a subscription, recurring revenue biz 
Some examples of industries where I am comfortable placing my bets are
1. Online Gaming
2. Social Media
3. SaaS
4. Cloud
5. FinTech
6. Online Advertising
You will never see me invest money in the banking, oil, airline industry.
1. Online Gaming
2. Social Media
3. SaaS
4. Cloud
5. FinTech
6. Online Advertising
You will never see me invest money in the banking, oil, airline industry.
I openly share my portfolio performance once a month here on Twitter and on https://highgrowthinvesting.substack.com .
I have nothing to sell. I do this to keep me accountable, my thinking sharp, and to connect and learn more from the incredible FinTwit crowd.
I have nothing to sell. I do this to keep me accountable, my thinking sharp, and to connect and learn more from the incredible FinTwit crowd.
It feels like I am late to the social investing phenomenon.
It also feels so early, so most likely, I am not. It is fun for sure.
You can also follow my endeavor to beat the market on @eToro https://www.etoro.com/people/weakmeow
It also feels so early, so most likely, I am not. It is fun for sure.
You can also follow my endeavor to beat the market on @eToro https://www.etoro.com/people/weakmeow
For German-speaking countries, @wikifolio is another way to follow. https://www.wikifolio.com/de/de/w/wfgrow1000
Learned and been entertained by many people. Novice or expert. These accounts will make you smarter.
@FromValue
@richard_chu97
@RamBhupatiraju
@StockNovice
@InvestmentTalkk
@akramsrazor
@SeifelCapital
@KermitCapital
@dhaval_kotecha
@BahamaBen9
@hhhypergrowth
@BrianFeroldi
@FromValue
@richard_chu97
@RamBhupatiraju
@StockNovice
@InvestmentTalkk
@akramsrazor
@SeifelCapital
@KermitCapital
@dhaval_kotecha
@BahamaBen9
@hhhypergrowth
@BrianFeroldi
