Tag Archives: #CashFlow

Life at Frontier Minus One

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Sanity prevails…

…at frontier minus one.

Rat race is within the underlying’s…

control.

Virtual / quasi / substantial / semi debt-free-ness…

exists.

Free cash-flow generation on the balance sheet is…

…common.

At frontier minus one, the narrative is …

…under control…

…as proven by self-determination of speed of change…

…and by exhibition of substantial growth.

Not at breakneck speeds.

Not by borrowing to the hilt.

Not by greedy behaviour.

Not by indigestible trajectory.

Not by a reckless ‘not giving a damn too bad if you’re not so fast’ attitude.

Life at frontier minus one…

…is somewhat balanced, with a flow.

Innovation at frontier minus one is achieved much faster

…than at frontier minus two, but much slower than at…

…frontier zero zero.

No tech company that wishes to thrive well into the future is currently functioning at…

…frontier minus two.

Either the transition to minus one has been made, or, it’s in the process.

Why not go for the jugular? Straight to zero zero.

Everyone has their role in this puzzle.

Imagine an older civilization going into battle.

There was a front line, paving the way, at immense cost.

There was a reserve support line, with artillery, first-aid, communication, and what have you.

There was a third line with supply, reinforcements, semi-trainees doing other stuff normally, etc.

There was aerial support, naval support, intelligence, research and analysis staff etc.

All combined to create an ensemble of actions.

Cut to now.

Warfare has changed.

Immense cost is still there, but immense cost to the front line, as in cost of life, has been reduced greatly, speak drone and missile warfare, supported by AI backed intelligence and analysis.

Point is, innovation, a different way of thinking, disruption and all their cousins will find a way to make things affordable, implementable.

That’s the way civilizations move forward.

Not for you or me to change. It’s the way of the world.

And that is what frontier minus one banks upon.

Meaning, to keep functioning at sustainable levels, slowly, painstakingly, in the process, simultaneously, finding a way, a connect, to frontier zero zero.

The connect can be of co-work. Amicable. Win-Win. You earn, we earn.

At frontier minus one, the world view is not to annihilate, but to…

…accommodate.

To win…

…together…

…in…

symbiosis.

Symbiosis

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Imagine…

…the most value you can imagine.

That’s what this word is worth.

Especially now.

What’s the truth?

Existential question.

First we had everyone and their aunties proclaim the death of core Tech companies.

Hmmm.

Core Tech companies, and their chief protagonists, thought otherwise.

Number of believers kept waning though.

Until recently.

Something started to reverse in belief systems.

AI was behaving fantastically utilitarian with a human holding the reins.

Meaning, there needed to be a human there, for practical purposes.

Frontier AI deployed engineers to be the human face. Or so one was told.

Came the trust issue.

Do we double up on our trust in this no track record magician who just showed up out of nowhere?

Do we entrust privileged client data to the unknown?

Do we strip ourselves naked, TWICE?

NO.

Everyone and their uncles have answered with an emphatic NO.

Who is the human handler – the go-between – the trusted face – the rein holder?

Someone with a track record.

Proven.

Tried, and…

trusted.

Self-propelling.

With no liabilities. Spell ZERO DEBT.

With copious FREE CASH FLOW to INNOVATE FREELY…

…to navigate the reins successfully and as per the requirements of an enterprise.

Who is this entity?

None other than…

…our own very well known…

CORE TECH.

Leaner.

Hungry to prove its point.

To have its raison d’être acknowledged, and paid for.

To earn and compound steadily.

Forget about dying. Let’s talk about long term thriving.

Then, we had the captains of frontier AI admitting, that yes, ‘we do need core tech handholding to be implemented successfully’.

Gone was the initial hubris, that ‘we had come to wipe out old thought patterns, and all old systems’.

Reality had dawned, and these captains at least had the decency to admit it.

Actually, they had realized that their existence now depended upon how much their infrastructure would seep through. And…

…that no one was trusting them enough to hand over the job of seeping through to them, but much rather, to trusted old compatriots, to Core Tech.

So they came forward to shake hands.

Good.

Symbiosis.

We want to move forward on the back of this symbiosis.

There will be gigantic and fast development on the back of this symbiosis.

We are looking at space travel, space colonization, disease control, climate change, cheap solar, cheap desalination, perhaps even alien integration and partnership – unimaginable perhaps a few months ago, but possibly conceivable on the back of this symbiosis.

There’s new talk which has recently emerged, from the other extreme, and needs to be discarded, like its mirror image on the opposite side of the bell curve. This is the talk of frontier AI dying out because of becoming unaffordable.

Well, in whatever shape it exists currently, frontier AI does have tremendous capacity to solve problems.

Let it do just that on the back of this symbiosis, and earnings will start to flow.

Core Tech won’t let it wither, frontier AI has now become their raison d’être too.

Don’t you see it?

Two universes are converging, each needing the other to survive.

In the end, they become one universe.

Companies will merge. Synergies will multiply. Mega projects will be achieved, faster, more bombastically.

Earnings will flow.

Where do you want to be?

Remaining a doomsdayer will not help you.

Get into the flow.

Invest into debt-free, free cash-flow generating core tech as value deepens.

Look for debt-free, frontier minus one, free cash-flow generating semi AI companies, research these thoroughly for any red flags, and if those found are manageable, put in some funds.

If you find a frontier tech with manageable debt and a reasonable balance sheet, with a PEG ratio (price to earnings ratio divided by earnings per share growth percentage for the fiscal) somewhat under control. ok, put in some money there too.

Get out of the doomsday mindset.

Put your money to work, and then lock it in for another twenty years. Leave the compounded proceeds to your children.

Now.

Let the crashes come. There will be compounding post crashes too. Just look at the monthly chart of an IT index from 1995 to today. Dot-com peak looks miniscule and low compared to the levels of the monthly chart today.

Enough talking. Do the recce and then let’s talk.

Sometimes, you don’t like it

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Sure.

Like now.

Bloodbath in small-caps.

Alleged suicide.

NPAs.

Witch-hunt.

Did you choose Equity as an area of expertise?

Ok, then deal with it.

First up, India’s History is laden with scams.

We are where we are despite these.

Secondly, there’s growth. In other parts of the world, there is not much growth.

India is an emotionally volatile nation.

So are its markets.

Since this is where we act, let’s get used to things.

If you’ve been following the small entry quantum strategy, well, then you’ve got ammunition…

…at a time, when the value of this ammunition is immense…

…because lots of stuff has started to go for a song.

You do feel the pinch though…

… because whatever’s already in, is bleeding.

You don’t like it.

It’s normal.

Going in at a time like this, you will feel pathetic.

However, for your money, you are getting quality at cheap multiples. This will translate into immense long term wealth. Quality at cheap multiples multiplies fast.

Here are a few reasons you should feel ok about going in.

The small entry quantum strategy has rendered you liquid…

…after sorting out your basic family life, income-planning and what have you.

You are going in with money you don’t require for a longish time.

Muster up the courage.

Get over your pinch.

Engage.

Buy quality.

Debt-free-ness.

Shareholder-friendliness.

Generated free cashflow.

Transparency.

Diligent managements.

Product-profile that’s going to be around.

Less dependency on water.

Versatility.

Adaptibility.

Make your own list.

Use the stuff above.

Wishing you lucrative investing with no tears and with lots of smiles.

Try retaining one-off Wealth

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Easy come, easy go…

…am sure you heard that one before…!

When you come into something too easily, you sure do want to spend it, right?

Well, why not?

However, do take that one step back.

Let’s explore the possibilities here. 

You can spend it all. Have a blast. Blow it up. Yeah. We’ve touched upon that. Know many people like that. 

Or, you can save some and spend some. 

How about that?

Who’s asking you to save it all?

No one. 

You like spending?

Fine. Spend. A bit. Gratify your most burning desires without injuring anyone’s fundamental rights. 

Then, save the rest. Pickle it. Look away. Move on with your life. 

Why?

Lady Luck smiled. You got your one-off dose of wealth. Use some of it to make wealth a permanent feature in your life. 

For that to happen you’ll need to invest, be patient, compound, reinvest and what have you, till many many cash flows take care of all your needs. 

From which point did it start?

From the moment you decided to save some of your corpus and provide it with the necessary environment to grow.

It’s a basic decision…

…, yeah, a real simple one…

…that’s tough to implement. 

Try retaining wealth. 

You’ll then know exactly what I’m talking about. 

Inflammation Anyone? 

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Inflammation… 

… needs a reason to be… 

… and a reason to go. 

Let’s talk about the most common inflammation afflicting mankind. 

Sugar induced obesity. 

Human body recognizes Glucose and metabolizes it. 

However, the same human body treats isolated Fructose as poison. 

HFCS, short for high fructose corn syrup, is therefore full of poison. 

HFCS is much cheaper than table sugar. 

HFCS is used in big volumes by the food industry. It’s replacing normal sugar. Everywhere. It’s sheer… poison. And it’s cheap. Very cheap. 

It’s in cola, it’s in ketchup, it’s in almost all processed foods.

What happens to it in the body? 

Well, what happens to poison?

It goes straight to the liver. This wonderful and magnanimous organ tries to break it down. 

One big side-effect of the breakdown mechanism is the triggering of inflammatory enzymes. Body cells then start to swell up to protect themselves from poison. To and fro is impaired. They don’t want poison coming in. Unfortunately, good stuff, like insulin that throws out excess sugar, is also not allowed to enter.  Mankind is poisoning itself to obesity. 

Cut out the HFCS. 

Exercise to shake out inflammatory mechanism. 

See how your inflammation vanishes. 

Now let’s talk about the most common financial ailment afflicting mankind. 

Debt. 

We are in debt. 

We take more debt. 

We surround ourselves with useless paraphernalia, to ward off reality. 

Inflammation, again, disguised, but inflammation. 

Ultimately,  the mountain of due interest buries us under it. It chokes off our air-supply, just as obese cells produce “bad” lipids that deposit as mountains of plaque in our arteries, and choke off our blood supply. 

Let’s nip the problem in the bud. 

Like no HFCS – no debt. 

Craving for sugar? Fine. Control. To a point. Still craving. Fine. Have. But have normal sugar, along with fibre. Don’t have anything that contains HFCS. Shake off the relatively minor inflammation caused by normal sugar with exercise. You’re good. 

Longing to spend money? Control. To a point. Still longing to possess that something? Fine. Save. Consolidate. Accumulate cashflow. Only use debt when upcoming cashflow nullifies it in very foreseeable future. You’ve gotten your something, and you’re either debt-free already, or are going to be debt-free very soon. 

You’re good. 

🙂