• Facebook undertakes the world’s most expensive PR exercise

    Jul 27, 2018
    Facebook CFO Dave Wehner stated that operating margins will “trend towards the mid-30s” on Wednesday’s earnings call, which is well below the 2017 operating margin of 50%. This margin target doesn’t make sense. It implies Facebook either invests $40bn per year for no revenue reward, and/or is losing money outside of the US & Europe. I believe Facebook’s guidance is an ...
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  • What’s Waymo Worth?

    Jun 25, 2018
    Alphabet’s valuation has risen in the past year, with the firm is now priced at 25x P/E and 20x EV/EBIT. These multiples are high for good reason: Google is a great business protected by a strong moat and its cash flows are growing quickly. But these multiples are elevated vs. the market, currently 20% higher relatively than they usually are, suggesting investors should ...
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  • TAL Education: Muddy Waters slings mud, Cogent Alpha responds

    Jun 14, 2018
    This report contains my initial reaction to the Muddy Waters’ accusations on TAL Education (TAL). It represents my views as of posting time & date, but please recognize that these are fast moving situations and so my views could change. Note that I own TAL Education stock. I believe that the Muddy Waters’ accusations are not a reason to sell TAL Education stock. I ...
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  • The digital economy, the tech titans, and why they matter for all investors

    Apr 16, 2018
    This article has a very broad scope, as it describes ideas that underpin my view on how the world is evolving, and which companies will win in the future. These insights are crucial for long-term investors, but much less important for short-term traders. So, traders: feel free to turn away now. Introduction In the decade since the financial crisis there have been two themes ...
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  • Cogent Alpha: Lessons learned from beating the market

    Apr 2, 2018
    Twelve months ago, I published an article called 20 Firms For 2020. In it I outlined 20 firms that I thought were great long-term investments, using my selection process for “high quality, high growth” firms. This approach has worked out very well, with the 20 firms beating the market by 20% on average over twelve months, and 14/20 firms outperforming. That’s a great result, ...
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  • 20 firms for 2020: an investment strategy to last the decade

    Mar 30, 2017
    Rising competitive pressure from superabundant capital and new tech-enabled business models makes franchise durability more vital than ever. Few firms are creating value at a rapid pace, making some value creators intrinsically more valuable. Thus my investment strategy is to own 20 high quality firms with rapid intrinsic value growth priced at low valuations considering their ...
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