Launching Industry and Company Analysis on WealthSystems.ai
Longtime readers will know that I buy dividend stocks because I try to activate recurring revenue — building wealth engines is my obsession, and passive income means I can focus bandwidth on getting more engines cranking.
Dividend investing feels like being a land owner that has a crop on it with a predictable harvest and the history of harvests that I can study to understand the nutrient profile (cash flow, margins) and predict future harvests.
Income is vital… but capital appreciation and preservation are the ultimate design objectives for wealth systems.
Technology is changing the moneymaking math, fast.
As I learn more about the business models of several tech-enabled companies, such as the machine learning juggernaut Tesla and even financial technology companies like MicroStrategy, I am seeing an incredible opportunity to take ownership positions in these firms that have an outsized exposure to the margin expansion and multiple expansion that technology brings.
As is my way, I have begun intensive deep dives on the following subjects:
bitcoin mining (industry) + 20+ public and private miners (company)
ASIC development (sub-industry)
Tesla (company)
MicroStrategy (company)
I am going to publish these research reports here on Wealth Systems in paid posts for our members.
Given my background as an investment banker on Wall Street and now as a private investor for a decade I have a very thorough analytic framework.
I start by building my baseline understanding of the industry long before I analyze anything specific related to the target company. Learning the ecosystem makes understanding the decision-making of the target company more straightforward.
What unique problem does the company solve, and how? (e.g., Tesla - sustainable transportation with high-performance electric vehicles)
How does the company make money? (e.g., Tesla - car sales, software subscriptions, energy solutions)
What are the major costs? (e.g., Tesla - R&D, manufacturing, charging infrastructure)
What differentiates the company? (e.g., Tesla - brand, machine learning expertise, Owner is a marketing engine, Supercharger network)
These narratives are crucial.
Then we’ll get into the numbers.
Is the company generating positive cash flow? How is it used?
Is it growing consistently? How does it compare to competitors?
We’ll analyze margins (gross, operating, net) and trends, too. Evaluate their assets, liabilities, and overall financial health.
All of that is determined by the quality of the management and technology + business model, ultimately.
Much of my focus will be on technology and the pressure (headwinds and tailwinds) it adds to the business / industry. How is technology transforming the industry? Are there any emerging technologies that could disrupt the industry?
If you have a company or industry you are interested in, leave it in the comments or message me.
Let’s learn and build more effective wealth systems because of it!
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