Week in Financial Education (April 5, 2021)

This week we had a interesting question about the definition of duration due to an apparent difference between GARP’s new material and Tuckman. It’s a good chance to understand the math that underlies this fundamental bond risk measure. In external news, Archegos is a dominant story (and likely future FRM case study). Finally, David mentions the latest trade in his equities portfolio: he purchased an initial position in Coursera ($COUR).

In the forum (beginners/new learners)

In the forum (practitioners or experienced candidates)

Curated links

Musings

Coursera ($COUR) went public last week (their S-1 is here). I bought a small, initial position without regard to valuation, simply as motivation to stay informed on the company. I also participate indirectly via a long position in SuRo Capital ($SSSS at https://investors.surocap.com/) which is a public BDC that has positions in Coursera, Nextdoor, Course Hero and Palantir; $SSSS OpEx is too high, but I’m attracted to their concentrated portfolio. One fellow SA investor (at Louis Steven’s excellent service–Beating he Market–which is ranked #1 in a very competitive marketplace) argues that Coursera pairs well with 2U (https://2u.com/); so I’m adding TWOU to my watchlist. Last year I switched over to Coursera Plus, their subscription service (https://www.coursera.org/courseraplus).

To work in EdTech is also to admire Coursera as an observer and a customer (does CeriFi compete with Coursera? As far as I can tell, not yet directly). At current market capitalization of almost $5.9 billion and TTM sales of almost $300 million, the trailing P/S is almost 20x. Although that’s a historically high multiple, I consider last week’s $50.00 price to offer a durable long-term margin of safety: given its massive TAM and moatish competitive advantages, I’d expect COUR to eventually breach $50.0 billion in market cap company (albeit at perhaps slower growth rates than are often expected by SaaS investors and their kinetically aggressive screens). Their consumer flywheel is formidable and their brand is excellent. This is a stock we can hold without worrying about interim volatility. Their flywheel includes active innovation on their sophisticated skills graph (77 million learners and >200 university partners); see their Skills Development Dashboard. In just the last 12 months, recent innovations include Career Learning PathsAcademies (for business customers) and Professional Certificates from Google (e.g., Data Analytics, Project Management, US Design). I will share much more in a future investment thesis write-up on $COUR.

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