▶ Full Post Text
There are way too many non-value investors that come into this subreddit and they have no idea how we invest:
1. **FOMO investors** (\_\_\_ stock is going to the Moon, i have to buy it now it's gone up 130%)
2. **Speculative investors** (I heard this will go up, but do i know anything about it? Absolutely not!!)
3. **Discount buyers** (\_\_\_\_ stock is down 4000%, it can only go up!!!)
4. **Growth investors** (This sector is growing and so I just picked the top dog and am hoping it all goes up).
5. **Discounted stocks that are large failing companies with impressive histories** (It's too big to fail! It made me so much money before! This company will last until the end of time!! \[**MSFT investors here**\])
These are all terrible strategies and their portfolios look terrible.
Value investing is hard:
1. You are buying something that the **market is currently warring against**, and punishing in price.
2. It may have lagged for months or even years, **past performance is against you**.
3. You have to understand the free market to really assess if **something is special - the stock has some moat that is hard to assail and sets it apart. This takes a lot of time and work.**
Now leaving the lesson for an actual suggestion that follows value investing strategies.
As of today TTD is trading at $19.53 and it had fallen from about $140 back in December.
This is real decimation and real potential value, with a P/E of 22.01. Financially, the company is rock solid, with no debt dragging it down and earnings forecast to grow 10.6%.
The numbers are the numbers and they're good, but value investors are not accountants.
We use accounting, and we need to know the numbers, but it's more than that.
We need real moats, we need to see the free market, show true differentiation.
We don't want to own 100 stocks, we just want 20-30 rock solid ones, that have very unique attributes, IP, differentiators that make it hard for others to replicate or take their market share.
This is the step people skip, EVERY SINGLE TIME.
TTD's moats and real differentiators:
1. **Largest independent DSP in the world**. Market has been fettered with biased competitors and finally now has an independent arbiter that helps facilitate ad sales without choosing winners and losers.
2. **Revenue growth has been outstanding**, showing real market need.
3. **It's a platform**, similar to Google play or Apple App store, so people use it to facilitate business, platforms are true value adds.
4. CEO invested over **$100 million dollars into the stock**, buying around $25, to show faith and express how undervalued he felt his company was. This is real conviction.
Overview:
1. Company is beaten and battered by the market
2. Balance sheet and accounting is stellar
3. It has real moats and conviction behind it.
4. It is a platform where business is done, which is a rare find in business.
This is how you value invest, this is a quick way how you'd want to think in general, and you own these companies for years, if the stock pops and doubles, you don't just sell in in a month, you hold good businesses for as long as they remain good, that's how you get the most value out of your stock and avoid selling it too early, like those that sold Intel at $40 or Nvidia early on.
Hope this helps to all the non value investors in this sub and if you do one thing after reading this post, read Benjamin Graham's Intelligent Investor; it's the one stop guide to value investing.
Note: I own less than a handful of shares of TTD, so any change in stock price will have no real effect on my wealth or income. No free cash to throw at it at the moment, but i would do so if I had it.