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116 - Learning from mistakes you narrowly avoid $MCLDF

The DIY Investing Podcast

Release Date: 04/27/2021

133 - How to Solve the Dead Money Problem? show art 133 - How to Solve the Dead Money Problem?

The DIY Investing Podcast

Mental Models discussed in this podcast: Dead Money Opportunity Cost Time is Money Intrinsic Value Compounding Please review and rate the podcast If you enjoyed this podcast and found it helpful, please consider leaving me a rating and review. Your feedback helps me to improve the podcast and grow the show's audience.  Follow me on Twitter and YouTube Twitter Handle:  YouTube Channel:  Show Outline The Dead Money Problem and Solution “If you remember only one thing today: Time is Money”  What is Dead Money?  Any asset you own that is not growing intrinsic value...

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The DIY Investing Podcast

Mental Models discussed in this podcast: Incentives Skin-in-the-Game Accredited vs non-Accredited Investors Please review and rate the podcast If you enjoyed this podcast and found it helpful, please consider leaving me a rating and review. Your feedback helps me to improve the podcast and grow the show's audience.  Follow me on Twitter and YouTube Twitter Handle:  YouTube Channel:  Show Outline Key Concepts for thinking about compensating a Portfolio Manager Management Fees  Management Fees are priced a percentage of the assets under management.  A 1% management...

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Mental Models discussed in this podcast: Stress Testing Time Horizon Stoicism Please review and rate the podcast If you enjoyed this podcast and found it helpful, please consider leaving me a rating and review. Your feedback helps me to improve the podcast and grow the show's audience.  Follow me on Twitter and YouTube Twitter Handle:  YouTube Channel:  Show Outline The full show notes for this episode are available at  Key Concepts for Investing during a Crisis Stress Testing - Bankruptcy Risk? Goal: Survive Stress test businesses not stocks Focus on Fundamentals ...

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Mental Models discussed in this podcast: Catalyst Activation Energy Please review and rate the podcast If you enjoyed this podcast and found it helpful, please consider leaving me a rating and review. Your feedback helps me to improve the podcast and grow the show's audience.  Follow me on Twitter and YouTube Twitter Handle:  YouTube Channel:  Support the Podcast on Patreon This is a podcast supported by listeners like you. If you’d like to support this podcast and help me to continue creating great investing content, please consider becoming a Patron at . Show Outline...

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128 - Key Investing Ratios: P/E, P/S, ROA, ROE, Gross Margin show art 128 - Key Investing Ratios: P/E, P/S, ROA, ROE, Gross Margin

The DIY Investing Podcast

Mental Models discussed in this podcast: Investing Ratios Break Points Please review and rate the podcast If you enjoyed this podcast and found it helpful, please consider leaving me a rating and review. Your feedback helps me to improve the podcast and grow the show's audience.  Follow me on Twitter and YouTube Twitter Handle:  YouTube Channel:  Support the Podcast on Patreon This is a podcast supported by listeners like you. If you’d like to support this podcast and help me to continue creating great investing content, please consider becoming a Patron at . Show...

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The DIY Investing Podcast

Mental Models discussed in this podcast: Scuttlebutt Quality Investing Capital Stack Dark Stocks Please review and rate the podcast If you enjoyed this podcast and found it helpful, please consider leaving me a rating and review. Your feedback helps me to improve the podcast and grow the show's audience.  Follow me on Twitter and YouTube Twitter Handle:  YouTube Channel:  Support the Podcast on Patreon This is a podcast supported by listeners like you. If you’d like to support this podcast and help me to continue creating great investing content, please consider becoming a...

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126 - Series I Bonds: My Inflation Protected Emergency Fund show art 126 - Series I Bonds: My Inflation Protected Emergency Fund

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Mental Models discussed in this podcast: Inflation Emergency Fund Please review and rate the podcast If you enjoyed this podcast and found it helpful, please consider leaving me a rating and review. Your feedback helps me to improve the podcast and grow the show's audience.  Follow me on Twitter and YouTube Twitter Handle:  YouTube Channel:  Support the Podcast on Patreon This is a podcast supported by listeners like you. If you’d like to support this podcast and help me to continue creating great investing content, please consider becoming a Patron at . Show Outline...

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125 - Phase Change Investing show art 125 - Phase Change Investing

The DIY Investing Podcast

Mental Models discussed in this podcast: Phase Change (Chemistry) Earnings Power Consolidation Period Please review and rate the podcast If you enjoyed this podcast and found it helpful, please consider leaving me a rating and review. Your feedback helps me to improve the podcast and grow the show's audience.  Follow me on Twitter and YouTube Twitter Handle:  YouTube Channel:  Support the Podcast on Patreon This is a podcast supported by listeners like you. If you’d like to support this podcast and help me to continue creating great investing content, please consider...

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124 - How I Value Trade Stocks show art 124 - How I Value Trade Stocks

The DIY Investing Podcast

Value Trading is the process of rebalancing a portfolio using valuation specifically to adjust the weightings of your individual stocks. I value trade to optimize the performance of my portfolio, increase returns, and reduce risk.

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More Episodes

Mental Models discussed in this podcast:

  • Confirmation Bias
  • Skin in the Game

Please review and rate the podcast

If you enjoyed this podcast and found it helpful, please consider leaving me a rating and review. Your feedback helps me to improve the podcast and grow the show's audience. 

Follow me on Twitter and YouTube

Twitter Handle: @TreyHenninger

YouTube Channel: DIY Investing

Support the Podcast on Patreon

This is a podcast supported by listeners like you. If you’d like to support this podcast and help me to continue creating great investing content, please consider becoming a Patron at DIYInvesting.org/Patron.

Show Outline

The full show notes for this episode are available at https://www.diyinvesting.org/Episode116

mCloud Technologies - $MCLDF

  • SaaS company
    • Trading at just 1x expected revenue
  • Energy efficiency (Oil and Gas Plant efficiency)
  • Green Energy (Wind Turbines, HVAC efficiency)
  • Uses AI

Problems:

  • Cash flow negative (Presumably in the name of growth)
  • Regular ongoing stock issuance and dilution
    • Both shares and warrants
    • "An assumption that this is the last time."
  • Very promotional management (with skin-in-the-game?!?)
  • "Uplisting to the NASDAQ" talk
    • A lot of examples of SaaS names going from 1-2x revenue while on the Canadian TSX market to 10x+ revenue on the NASDAQ in the US
    • Still hasn't occurred many years later
  • Mergers and acquisitions using stock (Not cash, because they don't have any)
  • Growth targets include non-organic growth (REALLY BAD)
    • Dilution is required, but it makes it impossible to model per share returns
  • Exit: Liquidity event needed for the payoff (Either sell to another company or an uplisting)

Lessons Learned:

  • Don't buy promotional companies
  • Don't buy companies that dilute
  • Don't buy companies that can't self-fund growth
  • Insider ownership does not equal skin-in-the-game
  • Be wary of 'uplisting' as a catalyst

Summary:

Investors need to constantly be wary of confirmation bias and stay alert for possible red flags. mCloud Technologies stock $MCLDF taught me this lesson. Don't buy promotional companies that dilute shareholders and can't self-fund growth.