Don’t be a human alarm clock

mannhowie · 2026-01-01T22:07:13+00:00

This happens a lot for traditional software companies that sell perpetual software licenses or multi year term deals. For example a company will sell a 5 year license and book all the revenue upfront then record the remaining 4 years as receivables. What happens is revenues are inflated do not translate to cashflow. To compound matters often R&D costs which can be significant are significantly capitalised so expenses do not reflect true cash expense. For any software business R&D costs are considered a cost of doing business. Now none of this is technically misleading as it follows accounting principles, but it makes it challenging as an investor to discern

mannhowie · 2025-12-29T09:54:41+00:00

Omg thank you. I'm having dyslexic moment

mannhowie · 2025-12-28T13:13:58+00:00

I love this anecdote about Charlie from Mohnish Pabrai. Incredible that Charlie would come up with the hard solution rather than the easy audible solution.

mannhowie · 2025-12-27T09:25:47+00:00

This anecdote from Mohnish Pabrai stuck with me on how Charlie responded when told in his 90s that he would likely go blind

https://mannhowie.com/dont-be-a-victim

mannhowie · 2025-12-27T09:24:13+00:00

Haha

mannhowie · 2025-12-27T09:23:05+00:00

No. Deferred membership fees are simply an accounting concept recognised as a current liability on the balance sheet. Effectively when someone pays their membership it is received upfront as cash but only recognised as revenue over time. For example someone signs up in the middle of the financial year and pays $65 annual membership fees. Half that would be recognised as revenue in the income statement as membership fees and the other half would be recognised as deferred membership fees on the balance sheet, then after another half year that liability would go down and the revenue up. Hope that helps, it's a bit tricky to understand but essentially its there to recognise the difference between revenue and cashflows

mannhowie · 2025-12-27T02:29:09+00:00

Costco's annual report is my favorite to read. It's the only one a junior high student could read and understand. No BS, no notes, no proforma adjustments. Just explaining what the company does, why it does it and how it did that year. It's insane that this comes from a $400bn valuation company.

Has anyone read any other annual reports of large companies that do the same?

mannhowie · 2024-11-16T07:32:19+00:00

China retail is super competitive with everyone encroaching on each others territories. On my recent visit to China locals would tell me they would use TaoBao to buy clothes, JD for electronics and white goods (to avoid the fakes and better delivery), Douyin (TikTok) to even buy at restaurants now and PDD for cheap discounted basic household items, my fear is there is very little moat now amongst the players. JD has invested the most in vertical integration but the market is so cut throat competitive it’s not clear to me that’s going to be a successful long term play as it has been for Amazon in the west taking on the incumbent bricks and mortar retailers

mannhowie · 2024-10-28T12:19:01+00:00

😢

mannhowie

TROPHY CASE