profile

Long-Term Mindset

🧠 The Only Question That Matters With NVIDIA

Published 3 months agoΒ β€’Β 3 min read

View Online | Sign Up | Advertise​

Welcome to Long-Term Mindset, the Wednesday newsletter that helps you invest better.

Today's Issue Read Time: <3 minutes

  • Lesson: The S-curve
  • Timeless Content: The Warren Buffett Way
  • Thread: Investing Visuals
  • Resource: Estate planning 101
  • And more!

Together with Finchat​

I (Feroldi here) am a huge fan of visuals. A good chart can relay information 10x faster than numbers or text alone. That's why I've recently become a power user of Finchat.

Finchat is a powerful tool that makes it easy to chart hundreds of business metrics with just a few clicks. This includes valuation metrics, financial metrics, analyst estimates, and even custom company KPIs like unit volumes, same-store sales, or even dollar-based net retention.

Finchat also allows you to take advantage of cutting-edge AI, drastically speeding up my research process. Finchat is free to try, but the site is so useful that I happily pay for its premium features.

Want to try it? Use this link to sign up and knock 25% off the annual price.


Friends,

Let's revisit what's happened to NVIDIA over the past year...in Three Acts.

Act I

It's June 2023. NVIDIA shareholders are sitting pretty. Revenue is shrinking right now, but it won't be that way for long. ChatGPT was released eight months ago, and demand for NVIDIA's GPUs is expected to sky-rocket.

With management's forecast for 64% growth in the second quarter, investors are tripping over themselves to buy shares. Since ChatGPT's release, the stock has tripled. NVIDIA is now a $1 trillion company.

Act II

Convinced NVIDIA can't possibly go any higher, many investors (ourselves included) stay on the sidelines. That's too bad: the 64% revenue growth management predicted was actually low-balling it (it came in at 70%).

But that's not the real story. By the end of the year, NVIDIA is clocking revenue growth of 265%. Not only that, net profit margins were north of 50%!

NVIDIA is selling the picks and shovels of the AI revolution -- and it's the only major vendor for the time being. The stock has doubled since Act I -- now a $2 billion company.

Act III

Act III is today. Instead of trying to predict where the stock will go, we can focus on a more fundamental question: Where are we on the AI-adoption S-curve?

Every major technological breakthrough goes through a period of adoption. What seems like a small, niche product can go mainstream and explode overnight. We've seen this pattern repeatedly over the past century.

The only question that NVIDIA (and Super MicroComputer, and AMD) investors should be asking themselves is this:

Sadly, we don't have the answer to that question.

But we are certain that this is the right question to be asking.

We also firmly believe that over the long-run, knowing which questions to ask is even more important than your predictions about the future.

Wise questions help inform the stocks you put in your portfolio, their allocations, and -- in the end -- your overall returns.

Wishing you investing success and a future full of beautifully wise questions,

- Brian Feroldi, Brian Stoffel, & Brian Withers


One Simple Graphic:


One Piece of Timeless Content:

The Warren Buffett Way by Robert Hagstrom is a classic investing book. If you've never read it, check out this 8-page summary. It contains a quick overview of Buffett's approach to investing. I love point #1 the most: "Never follow the day-to-day fluctuations of the stock market."


One Thread:

twitter profile avatar
Brian Feroldi
Twitter Logo
@BrianFeroldi
8:19 AM β€’ Aug 13, 2023
1976
Retweets
8396
Likes
​

One Resource:

With Nvidia's stellar stock performance over the year, investors have become interested in the industry. If you fall into that camp, you should check out this microchip investing overview.


One Quote:


πŸ‘‹ LAST WORD How are we doing?

We love hearing from readers and are always looking for feedback. How are we doing? Is there anything you'd like to see more of or less of? What aspects of this newsletter do you enjoy the most?

Just hit reply and say hello – we'd love to hear from you!

Cheers,
The Long-Term Mindset Team


More From Us:

πŸ“— If you've read Brian Feroldi's book, he'd love a review.

πŸ‘¨β€πŸŽ“ The next cohort of our Valuation Explained Simply course starts in May! Click here for details.

🎬 Want a review of popular company earnings? Check out our YouTube channel! Last week, Brian Stoffel reviewed Crowdstrike's stellar results and covered why Sea Limited is investable again.


Long-Term Mindset

by Brian Feroldi

I teach you how to invest with a long-term mindset. Each Wednesday, I share six pieces of timeless content that can be read in less than 2 minutes. Read by 100,000+ investors from a16z, Amazon, Google, Microsoft, and more.

Read more from Long-Term Mindset

View Online | Sign Up | Advertise Welcome to Long-Term Mindset, the Wednesday newsletter that helps you invest better. Today's Issue Read Time: <3 minutes Lesson: Why SaaS stocks plunged last week? Timeless Content: Buffett's advice to his wife Thread: Philip Fischer's checklist for buying a stock Resource: Stock-based compensation explainer And more! Together With Sidebar Sidebar is a leadership program that accelerates your career. It’s where people at the top of their field grow through a...

about 6 hours agoΒ β€’Β 2 min read

View Online | Sign Up | Advertise Welcome to Long-Term Mindset, the Wednesday newsletter that helps you invest better. Today's Issue Read Time: <3 minutes Lesson: Your biggest advantage over Wall Street Timeless Content: Investing in an election year Thread: Traits of multi-baggers Resource: Should you sell in May and go away? And more! Sponsored By: The Flyover The Flyover offers a refreshing alternative. Delivering quick-to-read, informative content across sports, business, tech, science,...

7 days agoΒ β€’Β 2 min read

View Online | Sign Up | Advertise Welcome to Long-Term Mindset, the Wednesday newsletter that helps you invest better. Today's Issue Read Time: <3 minutes Lesson: NVIDIA's not-so-crazy valuation Timeless Content: Why company swag should matter to investors Thread: Looking at Crowdstrike's valuation Resource: A 401(k) primer And more! Together with Finchat Brian Feroldi using Finchat I (Feroldi here) am a huge fan of visuals. A good chart can relay information 10x faster than numbers or text...

14 days agoΒ β€’Β 3 min read
Share this post