I write about investment concepts, business breakdowns and timeless lessons from super investors. Featured on Business Times, Channel News Asia (CNA) and more. Read by over 10,000 investors.
What Investors Get Wrong: Chris Mayer, From Amazon to Space — Jeff Bezos, & Lessons Learnt From 2021 by The Good Investors — 3-Bullet Sunday
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Hey Reader - Thomas here. Good day to my fellow compounders! In 3-Bullet Sunday, I share with you the three most interesting piece of article, video or podcast I came across for the week on investing and growth philosophies. Enjoy! I. What Investors Get Wrong: Chris Mayer on Dividends, Noise, and the Power of ReinvestmentA long-term winner has a few engines for compounding value: What key traits did you find most common among companies that achieved 100-bagger status?
Big growth. Maybe obvious, but almost all of these 100 baggers become substantially bigger businesses over time. Of course, you can't just have growth. And that gets to the key feature – which is a high return on capital, earned repeatedly over a long period of time.
Think about it conceptually: If you start with $10,000 and earn 20% on that in year 1, then you have $2,000 in profit. If you can reinvest the $2,000 then you have $12,000 invested for year two. Another 20% in year two takes you to $14,400. You do that for 25 years, you have your 100-bagger.
Obviously, I'm vastly simplifying. There are taxes and other things to consider here. But it gives you your north star. Everything should be analyzed in this framework: compounding capital for a long time. And so, if you do think like this, you will find your focus shifts to things like competition and capital allocation. Meanwhile, other factors most investors slave over – like the present multiple of earnings or cash flow – tend to take a back seat.
Another important factor was that many of the 100 baggers had talented entrepreneurs driving them at least in the early days.
>> Click here to read Chris Mayer on Dividends, Noise, and the Power of Reinvestment II. The Interview: From Amazon to Space — Jeff BezosGreat interview by Jeff Bezos. He spoke about his remuneration, decisions at Washington Posts, solving U.S. debt crisis, space, AI (and how involved he is at Amazon, which makes me very happy as a shareholder). III. Applying The Lessons Learnt From 2021 by The Good InvestorsThey say never let a good crisis go to waste. Some great lessons and reflections here from the prior market frenzy. >> Click here to read Applying The Lessons Learnt From 2021 by The Good Investors That's all I have for you today! Till next week. |
Steady Compounding
I write about investment concepts, business breakdowns and timeless lessons from super investors. Featured on Business Times, Channel News Asia (CNA) and more. Read by over 10,000 investors.
Hey Reader - Thomas here. Good day to my fellow compounders! In 3-Bullet Sunday, I share with you the three most interesting piece of article, video or podcast I came across for the week on investing and growth philosophies. Enjoy! AI Stocks Are Having a Rout. This week I spent half a day setting up Grok Bot as my AI assistant. The universe is funny this way, because the very next morning Meta announced Muse is here in Singapore, and of course I cleared my calendar again to set that up too....
Hey Reader - Thomas here. Good day to my fellow compounders! In 3-Bullet Sunday, I share with you the three most interesting piece of article, video or podcast I came across for the week on investing and growth philosophies. Enjoy! Chasing the Northern Lights This December In early December, I'm going to the Nordics for the first time in my life, to see the Northern Lights. Apparently the sun runs on a cycle of about 11 years. It peaked in late 2024, but the years right after a peak can still...
Hey Reader - Thomas here. Good day to my fellow compounders! In 3-Bullet Sunday, I share with you the three most interesting piece of article, video or podcast I came across for the week on investing and growth philosophies. Enjoy! Thank You, Kuala Lumpur Yesterday was the KL book talk, my first outside Singapore. The cafe at Tsutaya Books in Bukit Jalil, Malaysia sits 50, and we ran out of seats, so some of you stood along the side for the whole hour. I love the energy of a room like that!...