Discover more from Vlad’s notes
The Weekly Review #2
We'll talk about Soros's back pain, learn how to find good companies without using a screener, and find a quick and easy way to get economic data.
Welcome to Vlad’s Notes, an investment newsletter from the founder of Roic AI. Make sure you follow me on Twitter to get more stuff that wasn’t included here, or send me a message.
The Weekly Review is a special Sunday publication made up of the most intriguing articles, tweets, companies, books, quotes, and services I discovered within the past week.
Trick · An unusual search for good companies
As you may know, I’m not a big fan of mechanical screening. In part, because this is a competitive ground among many analysts with the same piles of data. I prefer to search for market inefficiencies where I can use my strong points. I'm hoping that one of them is looking things up online.
I thoroughly check places where consumers and industry workers discuss their user experiences and industry problems. But I’m also a pretty avid user of Google search. Today I'll share some tips for finding a solid company based on qualitative metrics that aren't present in any screeners.
First, you need to choose a site. Usually, I use the database of published articles about companies. It can be Seeking Alpha, VIC, Corner of Berkshire & Fairfax, or any other. I don’t read the content because it’s useless. We just need to find hints of some qualities a stock has, for example, founder led, large market share, excellent management, etc.
It doesn’t matter how old the article is, because if a business is good, we can invest our money at any time, assuming a good price.
The second part of our search query should be the particular company’s attributes we’re looking for. Here are some examples:
Companies with large market share:
Query: "has * market share" site:seekingalpha.com
"DMC's DynaEnergetic has 20% market share as a perforating system manufacturer, whose product is necessary for oil drilling projects.”
”Snowflake: According to 7Park Data Research, the company has an estimated market share of 16% in Q2 2021. We believe that the company stands to benefit .”
Companies with good management:
Query: excellent management site:seekingalpha.com
”Methanex: Supply/demand forecasts for natural gas look neutral for MEOH shares in the short term. MEOH has an excellent management, as evidenced by its”
“Panera Bread is a 'BUY' for long-term investors. The company has excellent future prospects, owing to its world class management. The founder, Ron Shaich, has“
Companies run by founders
Query: owner | founder led site:valueinvestorsclub.com
”Basic-Fit: Led by founder/owner/operator Rene Moos, the company's business model and membership base have proven highly resilient during what has been a tumultuous .”
“C TECHNOLOGIES HLDGS INC: SSNC is led by founder, Chairman and CEO Bill Stone, who owns over $2 billion worth of stock. Stone has overseen huge value creation over“
“Regional Express: A group led by Mr. Lim Kim Hai invested in two subsidiaries of Ansett called ... does not pay himself a salary, instead viewing himself as a business owner.“
Of course, you need some imagination to predict how other writers could name the same attribute. But this is a particularly good starting point instead of a traditional screener.
Article · Never Look at Valuation in Isolation
A wonderful musing about the valuation of securities from an abandoned Substack newsletter called "Deliberate Capital By Corbin & Grayden" (the last post was in November '21).
You won’t find any specific numbers to select ugly from pretty there, but they provide a vivid concept of the current state of investing. You’ll look at the correlation between interest rates and stock yields, and see the trend of the former from the 1310 year.
No, it’s not "the economy has changed, don’t look at the fundamentals." It raises pretty good questions about the shrinking margin of error since most value lies in growth today as opposed to hard assets back then.
Quote · Soros and his back pain signals
I don’t argue that this quote is true and Soros’s son said this just because he didn’t find himself in his father’s will, but this is a good reminder that not everything in our life is so polished and simple.
According to his son, Robert, Soros’s trading was always influenced by more than reflexivity. “My father will sit down and give you theories to explain why he does this or that”, he once said, “but I remember seeing it as a kid and thinking, ‘Jesus Christ, at least half of this is bullshit’.
“I mean, you know [that] the reason he changes his position on the market or whatever is because his back starts killing him. It has nothing to do with reason. He literally goes into a spasm and it’s this early warning sign.”
Soros has admitted to relying greatly on “animal instincts”, saying the onset of acute pain was often “a signal that there was something wrong in my portfolio”.
His decisions, then, “are really made using a combination of theory and instinct”.
Service · WolframAlpha
We used this service while studying math at university. It’s like a Swiss knife in the world of mathematics but also like Wikipedia for data.
Query: sales tax New York City, Chicago, Los Angeles
Query: Caterpillar employees + John Deere employees
Query: beer consumption
When you need to quickly and easily retrieve an industry or economic overview, it is very helpful. Although the service has some premium features, the majority of them are free.
That’s all for today, thank you.
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