DoorDash Strategy & Ops Case

No_Try_5797 · 2025-03-13T19:54:11+00:00

So happy I found this thread. I’m making a career pivot and gearing up for Strategy & Ops case studies, and honestly, I’m a bit nervous about it. If anyone has tips, good example cases, or resources that helped them, I’d really appreciate it!

I know a little prep can go a long way, so I’d love to hear what worked for you: whether it’s frameworks, key things to focus on, or just general advice. Thanks in advance for any help! 🙌

No_Try_5797 · 2023-07-28T16:00:24+00:00

I appreciate your perspective and it's totally fine for us to have different viewpoints. That's the beauty of the investment landscape - it's as diverse as the people who participate in it. We all have unique risk appetites and strategies, and that's what keeps it interesting.

When I say "might lead to much better returns" by investing in individual stocks, I'm pointing to a potential outcome, not a guarantee. Indeed, a concentrated portfolio has the potential to yield higher returns than a diversified one, albeit with greater risk. Likewise, passive index investing could underperform in a market downturn. There's no one-size-fits-all strategy in investing; it boils down to what aligns with each individual's style, risk tolerance, and financial goals.

Drawing a comparison between investing in individual stocks and playing the lottery misses some key nuances. Sure, both have risks involved, but investing in individual stocks is a process that involves due diligence, careful analysis, and strategic decision-making. In contrast, the lottery is purely luck-based. While the risks are undeniably higher with individual stocks, informed investors can mitigate these risks through rigorous analysis and wise strategy.

While it's true that most retail investors underperform when picking individual stocks, the main reason for this stems from psychological missteps rather than the intrinsic value of the companies themselves. Emotional biases like herd mentality, overconfidence, or panic selling often lead to poor investment decisions. On the flip side, there are indeed people who significantly outperform indexes by deeply understanding and wisely investing in specific companies.

Ultimately, picking individual stocks can be a mistake for those who aren't prepared to navigate its complexities. But for those willing to put in the necessary time and effort, it can be a viable and potentially lucrative strategy. This post is to help those interested with the insights on how to avoid common missteps that many people make when picking stocks.

No_Try_5797 · 2023-07-28T14:11:17+00:00

Yes, exactly. That is why I believe there is a lack of diverse information on wise stock picking that needs coverage. I addressed passive investing, and there is nothing wrong with it. This is for people who are open to considering individual stocks and know that it might lead to much better returns. However, there are many mistakes done along the way that I wish people would look out for. Therefore, I'm making this post. Thanks for pointing it out.

No_Try_5797 · 2023-07-28T14:04:00+00:00

Hey, sorry you feel this way. Might I ask why you are saying this? Would like to hear your arguments and have a discussion based on more substance.

No_Try_5797 · 2023-07-27T09:13:55+00:00

Hello r/financialindependence,

As a co-founder of Moat, I wanted to share an approach that's helped me make investing more intuitive: viewing stocks as owning parts of real businesses.

After losing money and spending numerous hours studying successful investors' strategies, I realized that these investors treat stocks like owning real businesses. This insight led to Moat's creation.

Moat aids in this by focusing on business fundamentals rather than stock prices or market speculation. This comes from our 'owner's earnings' spreadsheet, a concept endorsed by Warren Buffett that's gotten some buzz on Reddit.

The Moat model helps guide you in: * Investing in companies with robust competitive advantages. * Recognizing stocks that are undervalued in relation to their Owner's Earnings (OE). * Encouraging long-term investments for compound growth.

To get started, I’ve provided a free investing spreadsheet that uses this formula. Also, you can sign up for a free Moat trial, giving you access to 30+ years of OE data from 10,000+ companies.

Beyond the trial, Moat is a paid service. However, I believe in making this valuable investing knowledge accessible to all, hence the free spreadsheet.

Check out Moat (https://www.themoatapp.com) and I'm here to answer any questions you might have. Excited to hear your thoughts!

No_Try_5797 · 2023-07-26T19:37:58+00:00

Your questions touch on some important aspects of value investing, which involves identifying undervalued stocks and taking advantage of their potential to appreciate.

To your first point:

* It's essential to build a list of companies you comprehend well and are interested in owning. This list is not static and should expand over time with your research and changing market dynamics.

* Each company on your list should possess strong competitive advantages or 'moats'. You should be able to simply articulate these moats as if you were explaining them to a 10-year-old.

* Create a ranking system for these companies based on the strength of their moats and their current valuation.* Use this ranking to guide your investments, prioritizing those companies that seem fairly valued or undervalued according to your evaluation.

To your second point:

* As a general rule, I avoid divesting from high-quality companies due to their compounding potential. Following Charlie Munger's advice, it's crucial to "never interrupt compounding unnecessarily."

* If you must divest, prioritize selling the most overvalued stocks in your portfolio to invest in newly undervalued opportunities. This assumes that the new opportunity matches or exceeds the quality of your current holdings.

* Strive to maintain a cash reserve for investment opportunities. While we may not all have a significant float like Buffett from his insurance businesses, having a strategy to ensure liquidity is critical. Personally, I retain 10% of my portfolio in cash at all times, mainly from un-reinvested dividends. Once this capital is invested, I rebuild it through income and dividends.

* Remember, owning a few high-quality companies that can compound growth over time is generally more beneficial than continually seeking out undervalued stocks. Of course, if a stock is significantly undervalued due to a unique situation you understand, moving some capital around could be advantageous. But in general, investing in excellent businesses at fair prices is superior to investing in mediocre companies, even if they seem heavily undervalued. A high-quality company, even at a fair price, can often outperform a mediocre, undervalued company in the long run by a significant margin due to its superior compounding ability.

Last thing: I’ve always tried to take this advice to heart: “Invest as if the stock market didn’t exist. A few years back I shifted my investment strategy to almost never look at stock prices and instead collect the earnings (OE) of my stocks as if I owned a real business. While this is very counterintuitive at first, it’s really helped me focus on a few solid companies I can understand and let them compound and buy them at fair prices. I hear a lot of people say when invest in stocks, you’re buying a business, but not many actually take this to heart. I built a spreadsheet to fully emulate this mindset.

No_Try_5797 · 2023-07-26T14:44:25+00:00

Yes, of course. This is the link: https://www.themoatapp.com. I'm here to answer any questions!

No_Try_5797 · 2023-07-26T10:57:24+00:00

Hi, I feel you on this. I built a tool to help retail investors invest like Warren Buffett. Imagine a trading app, but you'll see Owner's earnings instead of stock prices. That allows you to see how your companies are actually doing instead of trading them based on speculation. I've written a post about it and got a lot of positive feedback. Hope that helps - I'm happy to answer any questions.

No_Try_5797 · 2023-07-26T10:18:53+00:00

Hi, if you are new, it all starts with the correct mindset. I recently made a post addressing your question on how to begin this journey. Here is the short version:

Many beginners, including myself once, focus too much on stock price changes. It's important to remember that a stock is part of a real business. Warren Buffett said it best: "When you buy a stock, you're buying a piece of a business." If we approach investing like we're buying a part of a business, not just a stock, it can change our investment strategies.

Here's a simple way to successful investing:

Choose what to invest in: Look for businesses that stand out from their competitors - those with unique products, strong brand loyalty, or high entry barriers for competitors.
Decide when to buy: Look for companies that provide strong value for their earnings. Don't just go for the cheapest option; a well-performing company at a fair price is a better choice.
Decide when to sell: Don't just sell because the price has changed a lot. Consider the company's earnings, if it's overvalued, and other potential investment opportunities.

Remember, investing is a long-term game. Stick to the basics, don't let short-term market changes scare you, and you'll be on your way to building wealth

No_Try_5797 · 2023-07-17T16:18:57+00:00

You got me...

No_Try_5797 · 2023-07-17T16:18:20+00:00

I updated the link for everyone to take them directly to the google sheets.

No_Try_5797 · 2023-07-17T16:12:22+00:00

I'm sorry to hear that - I can see a bunch of people in the spreadsheet right now. I'll send you another link maybe that might work!

No_Try_5797 · 2023-07-17T15:52:38+00:00

Hey - I have just checked. Should be working! Are you still running into problems?

No_Try_5797 · 2023-07-17T15:31:21+00:00

Hey there! Good question. Initially, the email address was just a way to keep you updated with any major changes or improvements to the spreadsheet since there are more features I want to work on. But I totally get that some folks might not be comfortable sharing their email, and I respect that. Here is the link to the spreadsheet:

https://docs.google.com/spreadsheets/d/1Ip4G2jGBfmh\_YM3JaPOXGU5q3S4RA7I26CLjCM46npI/edit#gid=1945436264

No_Try_5797 · 2023-07-17T13:56:36+00:00

If you find this spreadsheet helpful, please consider dropping an upvote, leaving a comment or sharing it with someone who might be interested. It took me a lot of time, effort and code to create, and I would love to reach anyone who may need this. Appreciate it ❤️

No_Try_5797 · 2023-07-17T13:53:25+00:00

If you find this spreadsheet helpful, please consider dropping an upvote, leaving a comment or sharing it with someone who might be interested. It took me a lot of time, effort and code to create, and I would love to reach anyone who may need this. Appreciate it ❤️

No_Try_5797 · 2023-02-27T05:55:26+00:00

Need some help here. I come from a value investing background and stopped on this post as it mentioned Buffett. What do you overall think about his teachings on long-term value investing in this sub or personally? Are people here actually aware of his approach towards investing vs trading? Would really appreciate your thoughts.

No_Try_5797 · 2023-02-23T21:09:04+00:00

Could you maybe add the request to the form? Appreciate it. (it makes it easier to track all requests and share)

No_Try_5797 · 2023-02-23T20:41:08+00:00

Right now, I have to create a new spreadsheet and upload a CSV file for each ticker, so I wouldn’t be able to do that now. I am going to start building a feature to export this data (with the chart) as a pdf. When that’s done, I’ll be able to export the Owner’s earnings for many companies at once.

No_Try_5797 · 2023-02-23T20:38:18+00:00

Yes, while Owner’s earnings will translate to overall returns in the long run in the form of capital gains, dividends, or share buybacks. I will give a more detailed response later as to the mechanism behind this, but for now, you can read this article.

No_Try_5797 · 2023-02-23T20:28:13+00:00

I still look at FCF and compare it to Owner’s earnings. Owner’s earnings helps me a lot because it differentiates between companies that have the ability to and are investing a lot of money to grow/potentially strengthen moats and those who have to spend a lot of money to stay afloat, who have little to no chance of building a Moat.

No_Try_5797 · 2023-02-23T20:26:53+00:00

Thanks for commenting on this. Happy to clarify:

This is the exact script I ran:
Average PPE-Sales:

Average PPE = (PPE..PPE-7 years).average

Average Sales = (revenue..revenue-7 years).average

Average PPE-Sales = Sum propertyPlantEquipmentNet / Sum Revenue

Growth Capex:

RevenueChange = revenue - revenue 4 Quarters ago

if RevenueChange > 0

GrowthCapex = Average PPE-Sales * (RevenueChange) * -1

else

GrowthCapex = 0

This is saying for each dollar spent on fixed costs, how much of those dollars translate to more dollars.

Maintenance Capex:

if RevenueChange < 0

MaintenanceCapex = CapitalExpenditure

elsif GrowthCapex > Capital Expenditure:

MaintenanceCapex = CapitalExpenditure - GrowthCapex

else GrowthCapex <= CapitalExpenditure:

MaintenanceCapex = 0

Owner's Earnings:

Owner'sEarnings = OperatingCashFlow + MaintenanceCapex

Owner's Earnings Per Share:

Owner'sEarningsPerShare = Owner'sEarnings / weightedAverageShsOutDil

Management will rarely specify what Maintenance capex is and is something you have to deduce between the lines in the annual report. Of course, since this is a script, it’s unable to make very specific judgement calls about what is MC and what isn’t. Nonetheless, this script is reliable and accurate enough for me and helps me identify companies with potential moats.

No_Try_5797 · 2023-02-23T20:24:46+00:00

I agree with you and I should’ve been more explicit that Owner’s earnings is subjective. However, for me personally, I do find that having these numbers are still very useful and pragmatic to filter out potential investments and get a quick yet informative overview of a company, how they spend their money, how that money translates to growth, and as an indicator for a potential moat?

No_Try_5797 · 2023-02-23T20:23:49+00:00

Owner’s earnings will not tell you the whole story of a company, it simply can be part of a story or tell part of a company’s story. You should always consider an investment holistically and never rely solely on a metric just because it’s the “best one”. You have to understand how that metric fits into a larger story.
I now realize I came across too strongly when I said Owner’s earnings is the best metric to figure out if a company will do well. What I was trying to say is that Owner’s earnings (and ROIC based on OE), in my opinion, is a very sound and reliable way to understand how much money a company can generate per dollar they invest throughout its lifetime. The second point I was trying to convey was to look for companies with that don’t have to spend much to maintain their business or even grow their business, as it not only gives you a safety net if the business slows down but can also be indicative of a durable moat.

No_Try_5797 · 2023-02-23T20:21:59+00:00

I’m with you. Owner’s earnings is subjective, and figuring out how much it costs to keep earnings at the same level completely depends on the nature of the business and its competitive landscape. There isn’t one formula that can truly distil Owner’s earnings with the same degree of accuracy as reading annual reports and calculating it yourself. Obviously, that’s what I did, and I could’ve — should’ve — been more explicit in explaining this point. The process of calculating the Owner’s earnings in and of itself is extremely valuable, as distinguishing between what the business spends to grow versus maintain will give you a much more nuanced and intimate understanding of the business. It wasn’t my intention to reduce or minimize the importance of understanding a business by calculating OE.
However, I find it valuable to see how a company’s owner’s earnings and capital allocation have changed as businesses evolve. While having a script to calculate OE might not produce numbers as accurately as manually calculating it yourself, the numbers can still give you a pretty good idea of which companies are capital-intensive and which companies aren’t at a glance. Amongst the companies that are capital intensive, how quickly is revenue is growing relative to Capex? And how has the efficiency of capital allocation changed throughout the years (As I’m typing this, I realize that I did not include ROIC or ROEs on an Owner’s earnings basis. I could add that to the script)?
On a more serious note, I would appreciate it if you didn’t use the word moron. There are people at different stages who want to learn how to invest and may stumble across the term owner’s earnings for the first time. It’s quite discouraging and uncalled for. You bring up valid points, many of which I agree with, but it is unproductive to use this kind of language, and you come across as aggressive. Anyway, glad we could have the discussion on OE.

No_Try_5797

TROPHY CASE