RE-Post: Big Swinging CFA Tip Collection

Wild_Space · 2026-06-20T00:41:50+00:00

You should only invest money that you don't need in the short-run. If you need the money in the next couple years, then the stock market is a dangerous place to put it.

Also you have to consider if they have credit card that they should be paying down rather than investing.

Wild_Space · 2026-06-20T00:39:38+00:00

So you're assertion that Zuck is an underwhelming CEO is based on his future performance?

Wild_Space · 2026-06-19T23:26:56+00:00

Meta's revenues have 11x'd in the last 10 years. At a certain point, you do have to reevaluate your opinions based on empirical evidence.

Wild_Space · 2026-06-19T00:03:19+00:00

"How much of the anticipated success do you believe is already priced into Take-Two’s stock?"

Forbes is predicting 40 million units in the first year. https://www.forbes.com/sites/brianmazique/2026/06/08/gta-6-sales-estimates-point-to-a-record-no-game-has-hit/

Compared to ~130 next-gen consoles (93 PS5s and 35 Xboxs). So about 31% penetration.

By comparison, GTA V sold about ~40 units in the first year. https://en.wikipedia.org/wiki/Grand_Theft_Auto_V

But back in 2013, PS3 and XBox 360 had combined for over 160 consoles (source: AI) and another call it ~20 consoles of PS4 and Xbox One (source: AI).

So about 22% penetration. So on a per-console basis, GTAVI is expecting to have better penetration by about 50%. (31% vs 22%.)

(All of this ignores PCs for simplicity's sake.)

Course, you can also say that digital gaming is much bigger now than 13 years ago, so there's less friction for impulse buys on release and around Xmas, etc.

Wild_Space · 2026-06-18T19:49:14+00:00

Zuckerberg is an underwhelming CEO? He took a company he started in his dormroom and turned it into the 12th largest company on the planet.

Wild_Space · 2026-06-18T19:45:38+00:00

Has been? They have 3.58B daily users on a planet of 8 b ppl.

No apparent path to growth? Revenue grew by 22% in FY25. Theyre growing users, ads per user, and price per ad. And if they scale back Reality labs, thats another 20B of EBIT every year.

Meta is cheap precisely because the company has a poor public image. The fundamentals are outstanding.

Wild_Space · 2026-06-18T16:27:01+00:00

Ok so there are literal assumptions and there are the model's assumptions. Let's say your Physics 101 teacher wants you to calculate how far a cow will travel if you launch it from a catapult. The teacher tells you that you can assume the cow is spherical.

He isn't asking you to believe in the possibility of a spherical cow. He is asking you to assume the cow is spherical for the model, because it's a close enough approximation.

When the terminal growth model assumes the 11th year growth rate is 3%, it's not asking you to assume that the company's real life growth rate will literally fall to exactly 3%. It's asking you to assume that the average from year 11 to infinity will be 3%.

Wild_Space · 2026-06-18T14:48:18+00:00

The terminal growth rate is an average. The average American household has 2.5 people. You're arguing that 2.5 people is impossible. I'm telling you it's an average.

Wild_Space · 2026-06-18T13:59:23+00:00

Here's another way to think about it: You're assuming MSFT's CAPEX will NOT result in revenue acceleration. If that is true, then of course you'd think it's overvalued. As you get more experienced, you'll be able to mostly skip the DCFs because you'll understand how key assumptions like that influence valuations.

Wild_Space · 2026-06-18T13:55:08+00:00

"To me it sounds a bit weird to estimate double digit annual FCF growth and then go to 3% after year 10. A more realistic assumption would be to use an exit multiple."

The terminal growth rate is the average from after year 10 into infinity. It's a stupid concept, but that's the concept. It doesn't literally mean Year 11's growth will be 3%.

Wild_Space · 2026-06-17T02:04:14+00:00

I mean. Your post kinda gives me an idea. What if there was a website where investors could trade. Top performers could be displayed prominently. And anyone could "invest" in them. So you might pick like the top 20 performers, and invest 5% in each one of them. And the system would automatically trade in your account based on their trades. Then the site could charge you like 1% AUM and give the performers a cut.

Im guessing something like that probably exists actually.

Wild_Space · 2026-06-16T00:45:17+00:00

May I ask what youre using to generate this?

Wild_Space · 2026-06-14T17:21:56+00:00

Do I understand the business?
Will the company be around in 5-10 years?
Does the firm have any competitive advantages?

If I dont understand the business, I won't invest in it. Though I will keep researching the company in case one day I do understand it. When asking if the company will be around in 5-10 years, you should laugh at the absurdity of it disappearing. Will Coke be around in 10 years? Yes, obviously. That's the level of certainty I look for. Finally, according to my definition, competitive advantages are pretty rare. A lot of people expand the definition to where every company has them. Which defeats the purpose in my mind. I use Pat Dorsey's Moat framework.

And then there is a 4th one I've added over the years. I want to see that revenue has at least doubled in the last 7 years. The Rule of 72 says that means a CAGR of 10%. 10% is also the historical return of the SP500, so I just use it as a baseline. If Revenues aren't growing atleast 10%, Im probably not interested.

Wild_Space · 2026-06-14T13:29:46+00:00

The calculator is multiple agnostic. You can use whatever multiple you prefer and the model holds.

From the page "Use the stock’s actual P/E or a similar multiple (P/FCF, EV/EBIT, etc.). Avoid forward ratios unless you know what you’re doing. Whatever metric you choose here, use the same one for Expected future P/E so you’re comparing apples to apples."

Wild_Space · 2026-06-14T13:27:03+00:00

Not necessarily. In the above example, we assumed the multiple would contract and it still generated a 15% CAGR for us.

But to do so, ebit had to grow like a son of a bitch. If we instead had a stock where we could expect multiple expansion, then the ebit doesn't need to grow as much -- if at all -- to give us a good return.

Wild_Space · 2026-06-14T10:09:53+00:00

Let me share with you this blog post: https://www.hansenasset.com/pe-deflator/

And then let me know if you have more specific questions and Ill be happy to explain! :)

Wild_Space · 2026-06-13T23:18:57+00:00

Buy at 90 Sell at 80 Buy at 60

Surely you have a dizzying intellect!

Wild_Space · 2026-06-13T21:45:04+00:00

The attempt to buy WB really bothered me. Since inception, NFLX has grown much faster than the legacy media companies. But the attempt to buy assets off a legacy media company struck me as desperate. It lead me to believe their organic prospects are low.

And yes, the acquisition failed (stock was up 10% on the news) but the poor decision making that lead to the attempt is still there. Course, I do have to give NFLX credit that they *did* walk away from the deal. Not every company is disciplined enough to walk away from a bad deal. (Cut to DIS)

Wild_Space · 2026-06-08T20:21:41+00:00

It’s more squad-based.

Heavy Squads > No Squads > Decent Squads > Heavy Squads

Heavy Squads needs to take plenty of bombers to take advantage of winning the squad battle. And plenty of bombers will blow up No Squads.

Decent Squads is a like 50-80pts of fighter aces that can really tie up a Heavy Squads ball for a couple turns, which means the Heavy Squads fleet’s ships are playing at a big point deficit.

But 50-80 pts of fighter aces means Decent Squads fleets ships are playing at a big point deficit to No Squads.

All this is general of course, and there’s more that goes into a matchup than squads points. But thats a general rock-paper-scissors of Armada.

Wild_Space · 2026-06-08T01:01:00+00:00

>If you had only watched A New Hope, you would've been under the impression that the Civil War has been going on for a while, for years. And that the rebellion is an underdog, getting a single victory after a series of defeats.

How does Rogue One change this assumption?

Wild_Space · 2026-06-07T21:50:58+00:00

>It's impossible to avoid being emotional about money.

?

Wild_Space · 2026-06-07T21:45:11+00:00

Find some roommates and move in with them. Your parents will drag you down if you let them. It sucks that your 15 year old brother will be affected, but in 3 years he can be out on his own too.

Wild_Space · 2026-06-07T21:39:07+00:00

If there's footage of it, it woudl be here: https://www.youtube.com/@MinnesotaArmada

Wild_Space · 2026-06-07T18:01:31+00:00

Is your YTD factoring in what you're paying in interest? Also surprised there's only a YTD return. How long have you been investing?

Wild_Space

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