How Increasing Trade Receivables Days Is an [Potential] Early Warning Sign

What are trade receivables and trade receivable days? Trade receivables is nothing more than sales that were done in credit. Depending on industries, trade receivable credit terms could be 30 days to 90 days. As a business, you would like to have very low trade receivables or none. Trade Receivable Days is simply nothing more …

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Implications of Share Buy-Back: The Smart and Not-so-Wise

As investors, we often see two types of share purchases. One of them involves a director utilising his or her personal money to purchase the shares, which may indicate the company is undervalued or seen as supporting the share price. The shares are kept under the director’s personal account. The another involves a company utilising …

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[BloombergQuint] Alpha Moguls With Mohnish Pabrai & Google Talks

The liberty of being a full-time investor allows me to control my learning objectives and continue to compound my own knowledge. I did that by planning my schedules around learning, doing and growing. Monish Pabrai is an enormous giant in the world of value investing, someone I've drawn constant inspiration. A friend of mine shared …

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The Power of Free Cash Flow

Often, what is value creation? It is the magic of an entrepreneurial mind and a commercially-viable business idea, mixed with the ability creating products/services that consumers desire. We measure that by a business’ free cash flow generation ability. Free cash flow (FCF) is simply “cash flow from operations MINUS capex” FCF allows a company to …

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Operational Leverage for Exponential Effects to Compound Shareholder Value

Over the past few weeks, I have shifted my thinking towards companies with operating leverage coupled with network effects. Why Network Effects? In Morningstar's approach, the firm views economic moats as below: Generally, I do think moats are derived from the business model design, creation and offering a superior product/services that the end customers desire. …

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