"The more things change, the more they stay the same."

I can’t stress enough the importance of recognizing that certain key principles remain constant as long as the sun shines above us.

For instance, human nature doesn’t change with the advent of new technologies or social media. Instead, these developments amplify our inherent desire for social belonging and approval.

In the realm of investments, understanding the fundamentals is crucial. Let’s demystify the concept of fundamentals versus media hype:

Fundamentals involve understanding the drivers of revenue, cost, capital expenditure (capex), and capital structure (equity + debt) and their significance.

"The more things change, the more they stay the same."

Economies of scale are effective only if the product or service is genuinely valuable. Flashy 50% sales, heavy spending on branding, promotions, and celebrity endorsements can create an illusion of success but don’t guarantee it.

Consider this: men are visually driven, which is why women wear makeup, while women appreciate what they hear, leading Casanovas to spin elaborate tales. But now, companies and investment banks bombard us with visuals and narratives, taking this dynamic to another level.

We end up buying shares in loss-making companies during IPOs. How does this happen? It’s a departure from fundamentals.

How can a rational individual pay for a company just so an earlier investor can exit, leaving us with a sinking ship in the middle of the ocean? It’s not a matter of if it will sink, but when.

I too need social approval 😏, Don't forget to like and comment your thoughts.