Buy Hold Rant
What Makes a Company Worth Buying? Hamid Breaks Down His Investment Strategy Step-by-Step
9/25/2025, 5:25:05 PM
Economic Summary
- Investment approach prioritizes buying great companies at good prices; sometimes buying good companies at great prices (example: Bumble BMBL) when valuation is compelling.
- Valuation is assessed relative to industry peers and growth rates—faster growth and higher margins justify higher revenue multiples, especially in software/tech.
- A key screening question is whether a company can 10x revenue in 10 years; TAM and growth runway make a company materially more attractive if yes.
- Founder-led companies generally perform better because founders can move quickly and have organizational clout; exceptions exist (Satya Nadella at Microsoft MSFT).
- Market cap matters because it signals how much future growth is already priced in; Robinhood (HOOD) once had little baked in, but now much of near-term growth is reflected in price.
- Portfolio management emphasizes de-risking winners (trimming), holding substantial cash to avoid forced selling in crashes, and using cash to buy opportunities during downturns.
Bullish
- Founder-led companies tend to outperform due to decisiveness and founder clout.
- Buying out-of-favor companies after the market gives up can yield big returns.
- Target companies that can 10x revenue in 10 years if TAM supports it.
- Good companies purchased at great prices (contrarian buys) present the best opportunities.
Bearish
- Many stocks already have future growth baked into their price, limiting upside.
- Non-founder CEOs can struggle to move a company quickly or inspire employees.
- Trim winners to de-risk—realizing gains reduces exposure to reversals.
- Broad market overvaluation can make finding truly cheap opportunities harder.
Bullish tickers
BMBLNFLXMETAMSFT
Bearish tickers
HOODGMERKLB
BMBL
Bullish
Described as a good company bought at a great price, a compelling value opportunity.
HOOD
Bullish
Earlier, a low market cap meant little future growth was priced in, creating a strong upside opportunity.
Bearish
Speaker notes that much of Robinhood's near-term growth is already baked into its stock price, limiting upside.
RKLB
Bullish
Held as a strong performer but was trimmed as part of de-risking and harvesting gains.
META
Bullish
Bought when out of favor (contrarian), seen as a long-term opportunity despite negative sentiment toward leadership.
NFLX
Bullish
Cited twice as an example of being written off and then making a strong comeback after the market abandoned it.
MSFT
Bullish
Used as an example where a non-founder CEO (Satya Nadella) successfully turned the company around.
GME
Bearish
Associated with retail trading controversy and negative sentiment that created market friction.
People mentioned
Satya NadellaSteve BallmerBill GatesMark Zuckerberg