🧠Warren Buffett vs. Cathie Wood
Reading Time: 4 minutes View Online | Sign Up | Advertise Friends, Step with us into a time machine. Rewind the clock to 2014. You've got $10,000 to invest and two options for where to put it. In one corner is Cathie Wood's ARK Innovation ETF (ARKK). Wood focuses on young, innovative, and "risky" stocks. Her valuation decisions are based mainly on a company's opportunity. In the other corner is Warren Buffett's Berkshire Hathaway (BRK-B). Buffett prefers highly predictable, mature businesses that return cash to... …
🧠The Two Types of Freedom
Reading Time: 4 minutes View Online | Sign Up | Advertise Friends, Every American knows 1776 was an incredibly important year for the American Revolution. Yet, only a few history buffs know 1763 was of equal importance. Until that point, the British practiced a form of salutary neglect: laws were not strictly enforced on colonial citizens, especially merchants. The colonists appreciated this stance. They had the freedom to do as they pleased. But in 1763, King George III needed to pay for the French and Indian War.... …
🧠The Nuance of Investing
Reading Time: 3 minutes View Online | Sign Up | Advertise Friends, Last week, we discussed why gross margin is the most underrated investing metric (and why Warren Buffett loves it). Today, we will share some additional nuance that investors need to consider when judging it. Consider Shopify: Shopify started by selling subscriptions to its platform that help merchants sell products online. Subscription sales have gross margins near 80%. Then, Shopify started selling additional tools to help make online selling even... …
🧠Warren Buffett Loves This Metric
Reading Time: 4 minutes View Online | Sign Up | Advertise Friends, If you attend a barbeque this summer and start a conversation about "gross margin," you'll get a lot of confused looks (don't ask us how we know this). But don't worry; that's why you're part of this community. And here, we think gross margin is perhaps the most under-appreciated investment metric. And we're not alone -- Warren Buffett is a massive fan of gross margin. It's a metric that he keys in on when he's analyzing a business. So, …
🧠Do You Really Want to Become a Great Investor?
Reading Time: 4 minutes View Online | Sign Up | Advertise Friends, Given the option, would you choose to become a vampire? If you're like us, your immediate answer is: "Of course not!" But forget the scary movies for a second; let's assume you could become a vampire without causing anyone harm; all of your friends had already become vampires; you'd live forever, become incredibly rich, and get superpowers. How about now? The decision would at least require some thought. Philosopher L.A. Paul puts it succinctly: You... …
🧠Focus On These Two Questions
Reading Time: 4 minutes View Online | Sign Up | Advertise Friends, On March 8th of this year, MongoDB reported earnings. The company -- which provides a next-generation database for software developers -- saw its stock fall 15% in response to the results. The culprit: MongoDB has a usage-based model. The more its customers use the database, the more it gets paid. And because MongoDB's biggest customer base -- tech companies -- were cutting back on spending, MongoDB's growth fell sharply over a short time frame. At... …
🧠The Timeless Lesson From NVIDIA
Reading Time: 4 minutes View Online | Sign Up | Advertise Friends, There are 32 analysts covering NVIDIA. All of them are intelligent, experienced, connected, and highly-compensated. Their key responsibility: make predictions about how much revenue and earnings NVIDIA will generate in the quarters ahead. Each individual analysts doesn't even have to be that accurate, either. All of their estimates are averaged together to come up with the "consensus" numbers that the company will be judged against. Last week,... …
🧠Where The Gold Really Lives
Reading Time: 4 minutes View Online | Sign Up | Advertise Friends, Richard Nixon stepped down from office in 1974. He remains the only U.S. President to ever do so. We might scoff at his name now, but it's important to remember that Nixon was wildly popular back then. In the 1972 election -- just two years before he resigned -- he won 49 of the 50 U.S. states and received 17 million more votes than his opponent. It was a landslide victory in every way. Years after his downfall, Henry …
🧠Does Shopify Have A Moat?
Reading Time: 4 minutes View Online | Sign Up | Advertise Friends, Shopify reported earnings two weeks ago and shares have popped 40% in the ensuing days. The jump wasn't without reason: the company announced it was exiting the logistics business (delivering packages to your front door), and doubling down on its core technology (the websites you order stuff from). Running a logistics business is complex and capital intensive. By contrast, software is much easier to manage and does not require a lot of capital. It's... …
🧠Plans Are Useless, but This is Priceless
Reading Time: 4 minutes View Online | Sign Up | Advertise Cohort 4 of our flagship course Financial Statements Explained Simply starts on Monday, May 15th. We've already helped 600+ investors master financial statements, so we know we can help you, too. If that interests you, use the coupon code LASTCALL149 at checkout. But don't wait -- it expires on Sunday, May 14th, at 11:59 PM EST. Friends, When my wife and I (Stoffel, here) first visited Costa Rica, we met lots of young expats who had permanently moved to the... …
