Mostly Borrowed Ideas Deep Dives, MBI Deep Dives

MBI Deep Dives

MBI is the abbreviation for “Mostly Borrowed Ideas”. 

Why “Mostly Borrowed Ideas?”

As a generalist, I do not have a background in any particular sector. I enjoy navigating across industries, businesses, and countries to learn, understand, and connect the dots. In any case, most ideas and innovations are incremental in nature. Very few of us are smart enough to come up with truly original or groundbreaking ideas.

I am Abdullah Al-Rezwan. I was born and brought up in Bangladesh. I went to University of Dhaka for my undergrad and majored in Finance. After working three and half years in Equity Research (Sell-side) covering Financial Sector in Bangladesh, I left Bangladesh to pursue my MBA in the US. I graduated within top 10% of the class from Cornell University's two-year MBA program and worked on the buy-side following my graduation. During my time at Cornell, I won two stock pitch competitions and also became finalists in four other competitions. I thoroughly enjoyed my stint as a generalist in the US large cap team at Madison Investments and covered a wide range of companies from UnitedHealth to Amazon and Boeing before US immigration reality paused my career in investment management. As my work authorization expired, I moved to Canada in January, 2021. Then in early 2022, I was able to return to the US.

Mostly Borrowed Ideas Deep Dives

MBI is the abbreviation for “Mostly Borrowed Ideas”. Why “Mostly Borrowed Ideas?” As a generalist, I do not have a background in any particular sector. I enjoy navigating across industries, businesses, and countries to learn, understand, and connect the dots. In any case, most ideas and innovations are incremental in nature. Very few of us are smart enough to come up with truly original or groundbreaking ideas. I am Abdullah Al-Rezwan. I was born and brought up in Bangladesh. I went to University of Dhaka for my undergrad and majored in Finance. After working three and half years in Equity Research (Sell-side) covering Financial Sector in Bangladesh, I left Bangladesh to pursue my MBA in the US. I graduated within top 10% of the class from Cornell University's two-year MBA program and worked on the buy-side following my graduation. During my time at Cornell, I won two stock pitch competitions and also became finalists in four other competitions. I thoroughly enjoyed my stint as a generalist in the US large cap team at Madison Investments and covered a wide range of companies from UnitedHealth to Amazon and Boeing before US immigration reality paused my career in investment management. As my work authorization expired, I moved to Canada in January, 2021. Then in early 2022, I was able to return to the US.

Equity Bottom-Up

<ul><li>Admittedly, I was confused looking at the initial reaction of Meta’s earnings when the stock went down. Mr. Market promptly corrected its “mistake” later.</li><li>One of the reasons I think some may have reacted negatively is the ever burgeoning capex outlook by Meta which inevitably exerts pressure on FCF.</li><li>I suspect a good fraction of investor base has a very mechanical understanding of FCF i.e. they understand that more FCF is better, but what many seem to find relatively harder to internalize is if a company has rich reinvestment opportunity, the optimal FCF should be as low as possible, especially if you have a strong balance sheet.</li></ul>

Admittedly, I was confused looking at the initial reaction of Meta’s earnings when the stock went down. Mr. Market promptly corrected its “mistake” later.One of the reasons I think some may have reacted negatively is the ever burgeoning capex outlook by Meta which inevitably exerts pressure on FCF.I suspect a good fraction of investor base has a very mechanical understanding of FCF i.e. they understand that more FCF is better, but what many seem to find relatively harder to internalize is if a company has rich reinvestment opportunity, the optimal FCF should be as low as possible, especially if you have a strong balance sheet.

Meta

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