My telegram reshares

Why I bought Palantir

Philip ( buy what you understand)
Publish date: Tue, 01 Dec 2020, 07:13 PM
Philip ( buy what you understand)
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Reposting my telegram musings here.

https://t.me/joinchat/TR4av30CaHKc9Rhe

For my telegram link
Following Message
The new Google for data.
17 year old company.
780 million revenue last year.
80% gross profit margin this year.
49% growth yoy.
US court forces government to buy from them. Orders soar since 2017.
TAM 119 billion. 56b commercial, 63b government. Russia and China not included, as government requirements.
 
Most of the 70% growth came from existing customer, 6 years plus. Meaning they start small around 5 million investment a year, and regularly increase in modular method for cross dimensional to 24 million a year.
Main business model: 3 apps.
Gotham: AI enabled mission command. ( The CPU in a sense).
Foundry: simulation and no code analytics. ( The GPU in a sense).
Apollo: Continuous delivery system for multiple system devices to submarines, satellites, computers mobile etc. ( The router in a sense).
 
Why government like it.
They can VERY QUICKLY deploy integrated systems: for example JPJ+Polis+Bomba+ Moh+ Mof+ JPS+ jabatan air+ hidrologi+ meteorology into a single system providing multiple dataset in multiple industry to get hyper fast results, for example catch criminals via jabatan air+Digi billing, track non paying customers via MOH hospital records, cover flood and drought data via bomba and hidrology together, where currently each jabatan is building their own standalone system... Which sometimes doesn't work.
 
Why I bought palantir? They can deploy these systems in WEEKS, while existing solutions in governments take years to deploy. Why buy myeg or heitech padu or datasonic. Once palantir comes in and tells them they can deploy entire system in two weeks? Jaws will drop.
 
A very good return on focused Investing. Sometimes you just have shut up and listen to your daughter scuttlebutt. People on the ground usually have a far better eye on it instead of "experts" like stock analysts
 
If they can get 10% of that 120 billion market, and earn 60% gross profits on 12 billion a year... It will be unheard of. At these prices the risk reward profile is very very cheap.
 
The big red flags like Qiang says to monitor is:
1. Stock compensation which drags down earnings.
2. Risk of a Cambridge analytica SNAFU.
3. George soros 1% ownership of palantir.
https://observer.com/2020/11/george-soros-regrets-palantir-investment-plans-sale/
 
These are headwinds... But temporary issues in my opinion on the business, as palantir has cleared up much in the way of controversy, and has shown themselves as simply the best data analytics company on the planet, which I personally believe is the next most important industry
 
While everyone is still looking at semiconductors players etc I don't see the growth there... Those will be a commodities field with low margins.
 
Data analysis I think will be the difference in the future for companies to perform, to give them a huge edge against smaller companies and peers in making the right decisions in steering big improvements in companies performance
 
Data analytics will be as big in the next 5- 10 years as the internet age (msft), the semiconductor age (intel), the petrochemical age (dow), the steel age (carnegie), the oil age (rockefeller), and the trading age (east india company)
 
Everything and everyone is starting to post the word AI in their business
 
Ai trading
 
Ai driving
 
Ai this and that
 
But what is AI really?
 
AI is simply the capability to process information at incredible speeds and provide clarity and simplicity.
 
Palantir is able to give users the ability to process data with incredible clarity unheard of in the market. The idea of a genius is the ability to break things down into simple to understand levels.
 
Looking at palantir application in covid-19 cluster tracking.
 
Having the ability to pull in billions of datasets to form a picture of who infects who and spreads to who is an excellent form of use in data processing.
 
I have sold my position in feihe to add palantir. Very sad to sell something to be something else, but none of us have enough money to buy everything. So we have to choose the best we can...
 
My position as of today for foreign market:
Palantir 20% bought 14.8, 16.5
Uniqlo 20% bought 42.4k
Stoneco 60% bought at 20, 52
 
Focused position which I can sleep well at night
 
How many companies do you know can help cdc track covid clusters and deploy in a few weeks?
 
How many companies do you know can help you win usa election?
 
How many companies do you know can help you track terrorists and criminals?
 
And sadly, how many companies do you know can help you track illegal immigrants?
 
Palantir offers a solution no one else on the planet can do at the moment with ease.
 
Reading homework:
 
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Discussions
1 person likes this. Showing 7 of 7 comments

Sslee

By the way why uniqlo?
https://www.retailresearch.org/whos-gone-bust-retail.html

2020-12-02 08:01

Sslee

Valuations and Forward Returns

Let’s get back to our thought experiment.

I recently wrote about Palantir. When I wrote that post just a few weeks ago, the shares were trading at $10, but the stock has promptly rocketed to $29/share. It now has a market cap of $50bn compared to sales of ~$1bn. Factset pegs their EV/forward Sales ratio at 45x. In the previous post, I used Google as a perhaps extremely bullish comparison for PLTR. What would have happened if you paid 45-50x sales for Google back when it IPO’d in 2004? 

In 2004 Google ended up with $3.1bn in sales and 272m shares outstanding, or roughly $11.39 sales/share. If you paid 50x that, you would have paid $569/share for the stock. The stock is now worth $1764, so you would have made a 7.3% CAGR in the shares, instead of the 20% CAGR you would have made if you paid $90 for the shares in 2004 (the actual trading price). The S&P 500 did 7.4% CAGR from 2005-2020, so you wouldn’t have even made the S&P return if you paid that much for Google way back then. This is precisely what it means to have a stocks odds handicapped in such a way that the payoff for being “right” on the company can . I can’t emphasize how much of a bull case is embedded in the current price for Palantir, Google was growing way faster than Palantir was at a similar stage of its life, even though Palantir is spending literally all of its profit on trying to grow their revenues. Alphabet is currently the 29th largest company in the world on a revenue basis. Does anyone expect Palantir to be as big as Alphabet/Google 15 years from now? That is the type of growth that the market is pricing in.

2020-12-02 23:29

Sslee

https://charioteerinvesting.com/staring-into-the-valuation-abyss/

2020-12-02 23:40

Archer

This is one of the US stocks Im eyeing to get back in. Up whole month and drop to 22.5x as i speak. Any idea about this stock?

2020-12-03 00:36

Philip ( buy what you understand)

Well, I started posting about it on my telegram group in November, some good insights from some of the software engineers in the group. I am just reposting some of the posts there.

You can discuss more with them there.

2020-12-04 08:25

Archer

I miss pltr but bought algm and amwl.

2020-12-09 11:23

Archer

Abnb ipo will be interesting.

2020-12-09 11:34

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