The Rational Cloning: Weekly Ideas #84

Just Tweets/Ideas That Make You Go… Hmm 🤔

Welcome to the 84th edition of the Rational Cloning Newsletter (Weekly Ideas Series).

Helping you discover the best ideas of others.

Happy cloning.

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Tweets That Make You Go… Hmm 🤔

• Keep seeing people say small caps are cheap. What are some of your best high-quality small cap ideas trading say, below 15x?

• What is your best asymmetric investment today? I'm not looking for hero or zero stuff, but a business with a decent balance sheet situation and generating cash flow.

• Waste management companies when they achieve national scale, they become 1-stop-shops for their enterprise customers, elimination the need of a broker. Cumulation of local scale leads to national scale. $WM Akin to how large insurance companies prefer to deal with $CPRT & $IAA.

• #Bitcoin is an urgent US national strategic priority. Here's a thread which explains my reasoning (this is a very short summary of my research as an active-duty officer & US National Defense Fellow).

• This paper by He decomposes currency returns into continuous and jump returns. "The jump-only strategies more than double the Sharpe ratios of traditional momentum and reversal strategies...".

• On royalties as an asset class.

• Distribution of IPO Returns post-IPO (9,000 deals seems like a decent sample size…)

• Wrapped up this book on $JKHY. These lessons stuck:

  • Exceptional companies often ride big waves, in this case the adoption of technology by banks and other financial institutions.

  • Even the best operators make mistakes. But they cut bait early, keeping them small. -Great things happen when you set a high bar and give good people the opportunity to succeed. The people who contributed the most to Jack Henry’s success came from Monett, MO and surrounding areas, not big financial centers.

  • While the business changed throughout the years, the culture kept it grounded and allowed it to navigate adversity.

• Here is a classic interview with Connor Haley and Garrett Finn of

  @AltaFoxCapital on their research project - “The Makings of a Multibagger: An Analysis of the Best Performing Stocks over the Past 5 years”.

• Jim Simons has just been trend following this entire time!!

• Why Singapore succeeded. Two examples:

  • Govt builds infrastructure, provides legal and economic institutions conducive to private investments to thrive

  • Salaries for ministers and public servants indexed to the private sector.

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Check out previous issues of Weekly Ideas👇 

• The Rational Cloning: Weekly Ideas #83

• The Rational Cloning: Weekly Ideas #82

• The Rational Cloning: Weekly Ideas #81

• The Rational Cloning: Weekly Ideas #80

• The Rational Cloning: Weekly Ideas #79

The Rational Cloner’s Library

• The 2023 Game Plan

• Table of Contents

• Fertilizers

• Royalty Companies

• Tobacco

• Black Stone Minerals (BSM)

• Mosaic Musings #1: Tin [Molecule Crisis Series]

• Mosaic Musings #2: Disinflation → Inflation Inflection Point?

• Mosaic Musings #3: Royalty Companies: Inflation, I win; Disinflation, I Don’t Lose Much.

Authored Books

• Nick and Zak's Adventures in Capitalism: Words of Wisdom from the Nomad Partnership Letters

• The Little Book of Investing Ideas: A Curated Collection of Investing Wisdom