Exactly

Book #21: The Investment Checklist “What you personally like is irrelevant to investing.” -Michael Shearn Shearn’s point is simple but easy to forget. Liking a company’s products can make us see the business more favourably. Disliking them can do the opposite. The better question is what the actual customers think. Who is the core customer? Why do they buy? What problem does the product solve? How easily could they switch? Would they notice if the business disappeared tomorrow? Your own experience can tell you where to look. It shouldn’t tell you what to conclude. Understanding the business means stepping outside your own preferences and seeing it through the eyes of the customers who actually determine its economics. One idea from a great investing book each week. Book #22 next Sunday.

Great they deserve more attention

Thanks 😊 Yup exactly. So much happens and then there’s no sign of any of it in the weekly close.

$TSM for me. Even for 12 years, not months.

We hear stock ideas every day. “Buy the dip.” “Value trap.” “The market is overreacting.” You get interested and check the numbers. But how do you judge the quality of the whole business, and where it stands against everything else you could own? 20% revenue growth sounds good. How good? 70% gross margin sounds excellent. But does that make the business excellent? What about profitability, cash generation, returns on capital, the balance sheet, reinvestment and growth together? A company can look exceptional on one measure and ordinary on five others. Comparing one number is relatively easy. Comparing the quality of an entire business consistently against thousands of other businesses is a very different problem. That was the problem we wanted to solve. Take financial information no one person can process across an entire market and make it comparable. Company by company. Metric by metric. Same methodology. Then answer two big questions: How good is this business? How is the market pricing it? That’s the perspective Top Percentile gives you. A consistent way to see where any company sits against the rest of the market. Here are the top 10 mega-cap companies by Business Excellence, with their valuation percentile alongside. Top Percentile is free to explore. Link in bio.

That was really quick from 7K to 8K! Congrats and well done!

Quick look at the week: the S&P finished almost exactly where it started, but it wasn’t a quiet week. The Fed raised rates for the first time in three years, the 10-year Treasury briefly moved above 5%, and oil stayed above $100. Lennar showed what higher borrowing costs mean in practice: affordability remains a major constraint, new orders fell 9% and the company cut its full-year delivery outlook. AI had its own wobble after calls to slow development hit semiconductor stocks early in the week. Meta pushed back, with Zuckerberg arguing companies should manage AI safety themselves, while Muse climbed to No. 1 on the US App Store. The sector recovered later, but the debate over how far AI development should be allowed to run is clearly getting louder. Lastly, Warren Buffett stepped down as Berkshire chairman, with his son Howard taking over as non-executive chairman. That’s it for the week. Have a great weekend everyone.

$ONON is smaller but this chart only shows the larger caps. It still has a decent sized box among the mid caps with $400m.

Maybe that’s where context comes in. Cleaner if data is simply reflecting the current financials.

That’s nice. Good to see how the business fundamentals change through the cycle tho.

Well spotted. I think that’s a technical issue. I’m checking the data feeds now. Thanks

Thanks! I was surprised to see $DECK is already a third of $NKE’s net income.

It’s not a business I’ve looked deeply at but on a first pass it does look pretty interesting. Business quality is still strong and the valuation looks attractive after the drawdown. The main thing to watch is the growth slowdown especially with bigger investment and rising costs around Temu.

If engagement is the concern, it hasn’t shown up in $NFLX growth yet.

The business itself also tops the charts. $META

Here are the large-cap consumer companies making the most money. Anything here surprise you?

Lovely to know more about you Michael. Not surprised there’s some sports in the background and I like the investment framework!

Yes. Looking at the business as a whole there is a clear turnaround. Revenue is something to watch, not necessarily to worry about.