Rene Sellmann
@ReneSellmann
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Invest intelligently in high-quality stocks! 11,000 subs on YT. I wrote three books. Get mentored ⬇️
Joined June 2017
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Do you want to get mentored by me? Over the past three years, l've developed an investing mentorship program in which you will learn everything from ...
... fundamental wealth-building concepts such as
✅ goal setting
✅ developing a "rich mindset" dealing with debt
✅ big life
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Chuck Akre on why people keep interrupting the compounding process 👇
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I recently stumbled upon a document titled “The Art of Stock Picking by Charlie Munger.”
I’ve read this document more than 5x this year alone, and each time I’ve come across a new mental model that changed the way I look at investing.
Here are ten of Munger’s “big ideas” 👇
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CAN PAYPAL'S STOCK DOUBLE?
PayPal’s stock $PYPL is down 81% from its peak in 2021 and many investors here on Twitter are bullish on the stock claiming it’s the best opportunity since $META traded below $100/share.
But how realistic is it for PayPal’s stock to double? A short
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Lynch's lucky/unlucky study updated for 30 years 1991-2020 👇
"Starting in 1965 if you invested at the peak of the market in each year, your annual return was 10.6%. If you timed the market perfectly, invested at the low point of each year, your return was 11.7%. The difference
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Lululemon $LULU is trading at a cheap valuation multiple compared to its historical valuation.
If you invested in $LULU almost 4 years ago, you actually lost money despite stellar revenue and EPS growth.
I recently covered the stock in a video. Here is a collection of some
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Matthew Peterson's full $BABA investment pitch can be found below (
@MattPetersonCFA
):
"For under $200 billion, this firm can be purchased today. We expect the cash and investment portfolio alone to be worth this sum by the end of the decade."
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Buffett accumulated 99% of his wealth after age 60.
Play the long game - it allows you to compound results.
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Yesterday my friend Andrew was sending me some amazing research work he’d done on whether “deep value” or “compounder” stocks should be considered more attractive?
Let me summarize his work and a few of his major takeaways:
Essentially, Andrew set out to assess the impact of
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Compounding starts slowly but gets more and more crazy over time.
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François Rochon is one of the best quality investors in the world. He is the founder of Giverny Capital and compounded investors‘ capital at a rate of 15.7% annually (vs. 9.9% for S&P).
Five years ago he gave a talk at Google. Here are five takeaways from his presentation that
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Paycom Software $PAYC used to be a high-flying tech darling and saw its share price soar past $500 in 2021, a 3,571% gain from its debut price of $14 per share in 2014.
Today, $Paycom’s stock is down 74% from that peak and now trading in the $140 range.
In this thread, I’ll
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Here’s an alternative approach to value PayPal’s stock $PYPL!
(Spoiler: the stock does look somewhat enticing at the current level)
With PayPal’s stock experiencing a catastrophic 81% decline from its 2021 peak, I recently shared a 5-year exit multiple valuation approach and
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Mohnish Pabrai on the "Magic of Buybacks" 👇
Do you own any "share cannibals"?
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Ulta Beauty is THE leading beauty retailer in the US and its stock is tumbling, down 32% since its March 2024 peak. Hence, $ULTA is trading at a historically low valuation!
In this thread, I’ll give you a brief overview of the business (1), analyze Ulta’s moat (2), share my
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Guy Spier is known for having spent almost $700k to lunch with Warren Buffett.
He is a superb investor who’s always on the hunt for undervalued companies and his Aquamarine fund has $200M in AUM.
Here’s a list of his 5 greatest and most educational public appearances (and
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Understanding ROIC and the implications of low/high ROIC is critical to success in investing.
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What the volatility of $META‘s stock taught me:
In theory, all investors praise companies that have the "capacity to suffer“ (i.e. companies that are willing to sacrifice short-term profits for long-term gains).
In practice, most investors hate such companies, will sell their
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Stock ownership rates within Europe vary dramatically. In Estonia, stocks represent as much as 53% of households' financial assets while in Germany only around 11% of households' assets are invested in the greatest asset class in the world.
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Is Nintendo $NTDOY – the beloved video game maker from Japan – one of the safest high-return bets in the market right now?
Let’s find out and do a quick back-of-the-envelope valuation exercise 👇
(Disclaimer: Nintendo represents a material stake in my portfolio)
A few basic
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Today, for the first time, I'm revealing my 12-stock investment portfolio, along with a concise 2-line investment thesis for each position. Feel free to roast my ideas!
I used the recently launched
@KoyfinCharts
portfolio manager for this thread.
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The power of compounding visualized!
By investing $1,000 a month for 10 years, ...
📈 your jump from $0 to $200,000 takes 33% of the total time
💵 your transition from $400,000 to $600,000 will take 11% of the total time
🏆 and moving from $1,800,000 to $2,000,000 takes only
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I’ve been investing for seven years now and the opportunity set right now is one of the greatest I have witnessed over those years. That’s especially true for small-cap stocks.
15 charts highlighting why small companies are trading at historically cheap levels:
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Here’s why Paycom Software $PAYC is an above-average business that is currently trading for a below-market multiple ⬇️
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“If I went sightseeing in Turkey, I'd not be that happy. But if I spend the week visiting 15 businesses, that’s an orgasmic experience.” Mohnish Pabrai on not having to work.
😅
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Such a beautifully constructed portfolio of great companies by Josh Tarasoff and then there's $TSLA in there. This creates a lot of cognitive dissonance for me.
It reminds me of what
@vitaliyk
recently wrote:
"I have smart (a number of them are brilliant) investment friends who
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Over the long term, price follows earnings growth.
Or does it? $BABA
Will price and earnings ever converge again?
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Gun to your head: Which stock do you pick?
- Airbnb $ABNB vs. Booking $BKNG
- Brian Chesky vs. Glenn Fogel
- Visionary vs. Optimizer
- 24.7x vs. 18.6x forward earnings multiple
- both guiding for around 8-10% growth (I think?)
- Airbnb's unique experience offerings vs. Booking's
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$PYPL: "New management does absolutely nothing but use its free cash flow to buy back its stock, PayPal could go private in a decade.“
Multiple paragraphs on free cash flow and buybacks, but SBC is not mentioned once.
It’s a good report, but hard to take it seriously if this
Interesting PayPal $PYPL deep dive in Manole Capital's Q3 letter.
manolecapital. com
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Honest question to those who've dug deeper into the business of $DG.
At first glance, to me, it seems like the stock is trading at an Enterprise Value of around $32B if we exclude operating lease liabilities. Steady-state FCF margins are probably in the range of 5-7%?
If those
$DG Dollar General's current drawdown from peak of 58% is the WORST drawdown since it became a public company more than 13 years ago.
(Sorry for the ugly chart)
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Let me start by sharing his initial observations:
I’ll also share three critical conclusions:
Compounder bros shouldn’t think in 5-year intervals:
“If you are planning on holding the stock for 5 years or less, certainly 3 years or less, then the multiple which you pay is by and
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@ramit
Having control over your time is arguably the biggest benefit of financial independence.
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@buccocapital
Compared to other collectibles at least, wine as an asset class is actually doing quite okay.
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Yesterday was one of the most special days of my life.
Always remember that there’s more to life than just maximizing wealth.
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What's the single-best $FB stock write-up that covers Facebook's long-term growth options? Any recommendations?
Maybe you can help out
@LiviamCapital
?
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Tennis legend Roger Federer recently stepped off the court and onto the podium, delivering a commencement speech at Dartmouth College in 2024.
While his words were aimed at graduating students, there's a surprising amount of wisdom investors can take away from his speech.
In
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With the S&P down -2.5% and the Nasdaq -3.2%, it’s a great time to bring up this beautiful visualization of the distribution of 1-day returns over the last four years.
The lack of market volatility over the last two years was not normal.
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A short thread on the opportunity in the land of small-cap stocks:
@JohnHuber72
, an investor I respect greatly, recently highlighted that if the S&P 500 were to revert to a more historically normal P/E ratio, it could lead to low single-digit returns over the next decade, even
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Many investors are talking about Paycom $PAYC at the moment.
Many highlight the historically cheap valuation Paycom’s stock is trading at, but few spend any time analyzing the risks that come with a Paycom investment.
So let's explore 5 key risks 👇 (I need your help with
#5
!)
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In investing, valuation is EVERYTHING! 💵
I’d argue there are three primary reasons why investors underperform the market:
📉 A) They do not WANT value stocks (this is a phenomenon David Einhorn described in his most recent appearance) or …
📉 B) They do not KNOW how to value
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Chris Mayer on how to quickly reduce your investable universe 👇
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1/ An overview of China's tech crackdown and a few thoughts on how Alibaba $BABA might actually be a beneficiary if you are willing to take a long-term view.
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Hey
@TIKR
,
Incorporating this metric (ROIIC) into your dashboards might give you an edge over competitors.
What do you think?
@ReneSellmann
@KoyfinCharts
ROIIC + reinvestment rate = value compounding rate. Not sure that's a very frequently used term, but I like it a lot. I do that calculation by myself, because I also haven't found a site that does it.
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To enjoy the return of a 100-bagger, you must be able to hold a 100-bagger!
Drawdowns are a feature of long-term stock market investing. As
@morganhousel
puts it, "Volatility is the price of admission of superior returns."
I’ve attached the maximum drawdowns of 4 long-term
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Seth Klarman on the importance of managing downside risk first, and focusing on potential return second.
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10-15 companies is the ideal number of stocks to have in a portfolio. - Agree or disagree?
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Inspired by a recent blog post by
@ToddWenning
, I’ve recently completely overhauled my investment checklist to make the qualitative more quantifiable (“a system for quantifying qualitative judgments”).
Today I want to share my exclusive Business Quality Scoring System with you!
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In 2000, Amazon's stock dropped 80% $AMZN.
The letter Jeff Bezos wrote to the company's shareholders back then is probably the best corporate letter ever written 👇
Takeaway: Focus on the business and not the stock.
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Identifying moats is more art than science.
But one good indicator of the existence of a moat is the "trail of competitors' dead bodies lying in the company's wake."
A great quote from
@PythiaR
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The "Dean of Valuation" and professor of finance, Aswath Damodaran, recently appeared on the Invest Like the Best podcast.
Here are his three key insights on investing in China 🇨🇳:
(let me know if you agree with him?)
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As I started researching $grvy I listened to
@MadsC007
’s appearance on the Value Hive podcast. Really enjoyed the poker analogies - especially the idea to think in ranges. There is always a certain amount of luck involved as investing is a game of probabilities.
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$Meta is such a wonderful business and I think it will remain a wonderful business for much longer than most anticipate.
Part 2 of the interview with Former $SNAP director who was at the company for over 7 years:
- $META's first attempt at shopping failed because shopping on social media is more challenging than it seems because people do not have a shopping intent as they do on $AMZN. A big issue
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“The intelligent investor is a realist who sells to optimists and buys from pessimists.”
- Benjamin Graham
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10 Key Lessons from "The Little Book That Builds Wealth" ⬇️
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Haven't looked at $U for quite some time. Unity Software strikes me as a company that should be highly profitable, yet it is highly unprofitable.
It’s operating in a market where there shouldn’t (and aren���t) many competitors; it's effectively "competing" in a duopoly right now.
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10 Must-Follow Accounts That Share Investing Wisdom (almost daily):
@MnkeDaniel
@Investmentideen
@InvestInAssets
@FiSavvy
@IFB_podcast
@valuereport_tom
@MarceloPLima
@SteadyCompound
@InvestmentTalkk
@IrrationalMrkts
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Serious question: Why would anyone pick the MSCI World Index over the MSCI World Quality Index?
11.1% vs. 7.6% ... That's absolutely massive.
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Gun to your head: Which stock do you buy?
- Nike $NKE vs. Lululemon $LULU
- $110 Billion vs. $30 Billion Market Cap
- 19.8x vs. 19.3x earnings multiple
- 11.5% Ebit margins vs. 23% margin
- Wide range of athletic footwear, apparel, and equipment across various sports vs.
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A BRILLIANT old interview with Joel Greenblatt"
Is value investing dead? - "Yes, no, maybe, and I don't care!"
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#1
– Talks at Google (2014)
During his 1-hour presentation at $GOOG, Spier talks about a wide range of topics.
What stood out to me was this 8-point list to build a better investment process:
1. Stop Checking the Stock Price
2. If Someone tries to sell you something - don't buy
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Your biggest edge over other investors might be that you‘re not happy with an 8-10% return.
You got to be more demanding!
$LVMH is a wonderful business and 20x multiple seems fair and somewhat appealing (maybe your returns MIGHT even be better - or not).
What would be MORE
LVMH is now trading near its covid low multiple of 20x! I think it's fairly valued if you're looking for 8-10% annual returns. $LVMH $LVMUY
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@packyM
-18% after releasing its earnings is quite a modest drop measured by $SNAP's standards, right?
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A company that is about to pay out 60% of its market cap as a special dividend?
Yes, you read this right! I came across this interesting situation in my Twitter feed recently (h/t
@OracleofIreland
). Let’s have a look at whether this is an interesting opportunity or a value
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If you were stuck with only ONE valuation approach for the rest of your life, which one would you choose?
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A list of GREAT compounders – Yen Liow refers to them as "horses" – by region:
h/t:
@long_equity
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This is the first time I created a Twitter Circle to figure out which accounts I interact with the most.
Thanks for all the valuable interactions:
@IrrationalMrkts
@stonkmetal
@BrianFeroldi
@InvestmentTalkk
@RihardJarc
@JRogrow
@evfcfaddict
@rationalwalk
@SteadyCompound
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Charlie Munger's Partnership, the fund he managed before joining Buffett at Berkshire Hathaway, produced spectacular returns.
However, as to be expected, these returns were highly volatile (including one 53% decline).
The lesson: Volatility is the price of admission if you
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