3-Bullet Sunday (Investing in Companies with Optionality)

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I. Investing in Companies with Optionality

Click on the Tweet below to read more 👇

Thomas Chua @SteadyCompound

The market is efficient in pricing a business most of the time. However, it is horrendous at pricing the optionality of a business. 4 types of optionality that could be hidden in a business:

🎧 Listen (10 min): iTunes | Spotify | Youtube

This thread was inspired by Shawspring Partners’ letter.

Read the letter here➞ A framework for understanding optionality

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II. Why I left My Job to Write Full Time

It’s been 6-months since I left my job to focus on investing and monetize my blog by writing in-depth research reports on companies in my portfolio or on my watchlists.

The journey has been nothing short of fulfilling and I’m enjoying every bit of it—doing in-depth research, sharing ideas with other investors and improving my writing every day.

For those of you who are in the same situation as me 6-months ago, wondering if a career pivot is right for you—check out the regret minimization framework I used to help me come to a decision.

P.S. And of course, if you like to join us as a Steady Compounder and gain access to my archive of in-depth research reports, sign up here.

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III. Quality VS Value by Terry Smith

Insights:

• Getting the business quality and durability of the business is more important than the valuation.

• Over the long run, your returns are largely driven by earnings growth. To a smaller extent, by multiple rerating.

Till next week,

Thomas Chua