4:11 1. Strip an earnings beat down to its organic core
The repeatable method
- Subtract acquired revenue from reported growth (use the company's own disclosure of the acquisition's contribution).
- Separate guidance raises into organic vs acquisition-driven.
- Remove non-operating gains (equity-stake mark-ups) from EPS before comparing to estimates.
Here: CRM: +11% revenue became ~8–9% ex-Informatica; the guide raise was $100M organically; $5.06 of the $5.90 EPS was equity gains, largely Anthropic.
Watch for
- Companies with big private stakes or recent acquisitions whose "beat" rides on either.
8:04 2. Test a debt-funded buyback per share, not in total
The repeatable method
- Start from underlying (unlevered) earnings.
- Subtract new debt × its weighted interest rate to get levered net income.
- Divide each case by its share count (before vs after the buyback) and compare EPS.
- Then weigh the durable part — interest is fixed while earnings grow — against lost balance-sheet flexibility.
Here: CRM: $12B earnings; $25B at ~5% = $1.06B interest → $10.94B net income, but on 831M instead of 960M shares EPS rises from ~$12.50 to ~$13.16.
Watch for
- Buybacks done at high valuations or with floating-rate debt; an acquisitive company losing its acquisition capacity.
13:28 3. Grade your sells as a basket, not by the one that ran
The repeatable method
- List every stock sold over a period with realized P&L.
- Ask whether the sold basket still performs well (evidence of good selection) and whether the replacements did better (evidence of good high-grading).
- Don't read a sold stock's rally as a mistake unless the replacement underperformed on the same thesis.
Here: Sold BKNG, CMG, AAPL, INTU, CRM, EFX for +$100k net; CRM now above his sale price, but DASH +33%, TXRH +35% and a META growing 3× faster.
Watch for
- Replacements lagging the sold names over 2–3 years.
24:04 4. Screen for big drawdowns with intact growth — then read both cases
The repeatable method
- Filter for stocks far off their highs whose TTM revenue, net income and FCF are still growing fast with modest dilution.
- Read an up-to-date bull and bear case written after the latest earnings.
- Isolate the bear's specific mechanism (here, sequential growth) and chart it before forming a view.
Here: APP: −60% ($733→$300) against +47% revenue, +81% net income, +58% FCF; bear case = sequential growth slowed to 4% and depends on model breakthroughs.
Watch for
- Sequential (quarter-on-quarter) growth, not the smoothed TTM line.
42:09 5. When a company can't be modelled, size it as a bet
The repeatable method
- Check whether you can estimate a stable P/E or P/S a few years out.
- If not, admit the position is a thesis on optionality/management rather than valuation.
- Cap it as a small satellite and balance it with companies whose growth can be modelled.
Here: SPCX at $1.84T with two public quarters and capex dominated by AI compute and Starship: "very unpredictable" — acceptable as "a couple bets like this" beside an ETF of profitable compounders.
Watch for
- Several quarters of segment data that finally allow a multiple to be anchored.
Methods distilled from the login-gated Qualtrim Studio video for personal study. Not investment advice.