This is an inspiration from Warren Buffett in his bibliography The Snowball.
In summary, the books states most people treat stocks as luxury meaning that they are willing to pay premium price for interested stocks, however, Warren Buffett see stock as commodity, which means he only purchase stock for it pure underline value.
Therefore, there is a simple formula Mr. Buffett use, (Buy stock when: company underline value > stock price), (Sell stock when: company underline value < stock price). This simple idea is not only Mr. Buffett' but a lot of other famous value investors' long term investment strategy.
However, the idea that what is the pure underline of a company is so different and hard to master,
it takes Mr. Buffett lifetime to master it. The most crucial part of that equation is how to calculate pure value of a company.
Please feel free to read The Snowball and get your own inspiration, this is my version of applying everything i learn from the book to the specific sectors of public consumer tech companies.
Any business can be generalized as an operation that have a group of people working together with limited internal resources to create products or services which they can sell to customers for profit. The consumer based technology business is no different under the hood.
- a group of people (founders, managers, engineers, etc)
- limited internal resources (company assets, cash, data center, etc )
- products or services ( software, hardware, etc)
- customers (the end users who use the product everyday)