Month: February 2021

Would you like to invest in a company that pays 30% of its revenue to management and employees? Did they deserve it? In 2019, Uber generates 14.4 B in revenue, 4.5 B from that number went to employees, executives, and directors as a bonus. On contrary, the shareholder gets a negative number in earnings – and of course no dividend. A mayday call?

Some traders and investors sometimes fall into the same trap: hammer and nail cognitive bias. As a stock market trader seeks the best indicator, so does a fundamental¹ investor search for the best valuation ratio.

1. not true fundamental investor actually [↩]

In 2020, we have made a post that measures capital efficiency for Big Five (The Big Five member often changes): Facebook, Apple, Microsoft, Amazon, Google. And the winner is Amazon. Now we will try for the next five groups: Tesla, Berkshire Hathaway, JP Morgan, Johnson and Johnson, Visa. We still use ROIIC as our favorite matrices with 5 years horizon. Simply said, ROIIC – Return On Incremental Invested Capital – tell us: How much incremental in earning for every incremental in invested capital?

M1 chips offer much more performance with much less power consumed. For most investors, Apple Stock Psychology is Innovation and disruption.

The fall of Nokia and RIM sends a clear message: A phone with several features can’t compete with a PC in phone size and can make a call (call me iPhone). This reminds me of Dharmesh Shah’s quote, “If you’re trying to disrupt the status quo and beat bigger competitors, you’re not going to do it by playing their game.” Apple did not beat Nokia in their game. Apple came with a new product and redefined all the experience. Could Tesla repeat this disruption story? This is a continuing battle between the incumbent versus the innovator.

In June 2007, Apple introduced the iPhone – a PC with internet in pocket-sized. This historical device powered by a third-party processor: Samsung 32-bit RISC with ARM architecture. 13 years later, in November 2020, Apple unleash M1 – the most efficient CPU¹ in the world. Sending fear to Intel and AMD. This breakthrough is the sequel of company vertical integration when embedding its own chip – Apple A9 – in iPhone 6S. Investors need to know the story behind it.

1. measured in performance per watt [↩]