Behind the Balance Sheet
Our objective is to remove some of the mystique around investing and improve our understanding of what makes a successful investment, or indeed an unsuccessful one. We meet leading investors and commentators and educate ourselves not just about the world of investing but also about the world. Our goal is to inform, educate, entertain and make you a better investor. We feature famous guests and some you may not know. But we can learn from them all, whether you are one of our core audience of professional investors, a student looking to enter the industry or a private investor.
Total Ideas
2
With Returns
2
Equal-Weighted Return
+11.34%
All Ideas (2)
2 Total
Trim Overweight Tesla Exposure for Diversification
"We trimmed our Tesla position last year when it reached about a third of some client portfolios. We first bought Tesla in February 2020 at an average of $41.66 a share and it appreciated seven to eight times, eventually leading to an overweight position of roughly 33% in some accounts. Trimming this position enabled us to free up capital for attractive new opportunities like QXO and helped rebalance our portfolio."
The speaker provides an actionable portfolio management insight for investors holding Tesla (TSLA). When Tesla positions grow too large—around 33% of a portfolio—investors should consider trimming their exposure to mitigate concentration risk. This decision, supported by quantitative details including purchase price and subsequent growth multipliers, serves as a rebalancing measure to unlock capital for future high-conviction trades.
Buy QXO for Building a Consolidation Play in Building Products
"We sold some Tesla to buy QXO. We paid about $11 a share when QXO became tradable after Silver Sun Technologies was converted into a public company. With the stock now roughly double at $22 a share, and with a forecast to boost EBITDA from about $1 billion today to nearly $2 billion in three and a half years, the catalyst lies in harvesting operational synergies via the Beacon acquisition and redeploying free cash flow at an internal rate of return between 17% and 23%, with parts of the business targeting even higher returns in the 30% to 35% range."
The speaker outlines an actionable trade call for public market investors to reallocate part of their portfolio by buying QXO. The trade is based on QXO’s consolidation strategy in the building products distribution industry, quantitative trade details including an entry price of $11 with the stock having doubled to $22, and future EBITDA growth prospects, making it a compelling consolidation play with targeted high internal rates of return.