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Mostly Borrowed Ideas

30 Oct, 13 tweets, 4 min read

1/ Thread: $FB 3Q'20 update

2.5 Billion people use one of the $FB apps everyday
200 Million businesses use free FB tools
10 Million advertisers

Every time I read these data, the scale still astounds me.

2/

DAU/MAU both +12% YoY
Revenue +22% YoY
APAC and Europe +30% and 25% respectively
North America +20%
RoW +12%
# of impressions +35%, avg price/ad declined 9%

3/ Operating Margin ~37%. FCF $5.9 Bn (FCF Margin ~28%)

Outlook: NA market likely to experience decline in DAU/MAU

Q4 YoY revenue growth likely to be higher than Q3 YoY growth

Some headwinds remain.

No slowdown in sight for $FB’s capex.

4/ Election: Between March and September, 2.2 mn times political/social issue ads were rejected.

No political ads one week before and after the election.

Some interesting measures related to election result too.

5/ Interoperability between Messenger and IG inbox has been launched in the US. It will also be there in phases in other countries.

WhatsApp will also be included in future.

Why is Zuck so focused on interoperability? He dreams about making Messenger the primary messaging app

6/ If you come to the US from another country, it is indeed confusing.

In b-school, I remember we started with WhatsApp. Then we switched to Groupme, and finally moved to Slack. Of course, none of us liked to move platform every quarter.

7/ Zuck sounds excited with AR/VR hardware prospects.

8/ Big milestone Zuck is eyeing for VR is 10 mn unit sales by which the platform will be large enough for independent developers to prioritize Oculus.

9/ If these things pan out, I wonder how much pain brick-and-mortar stores are yet to feel.

10/ The bad blood between $AAPL and $FB continues. Looks like the feud between these behemoths will continue.

11/ WhatsApp looks ripe for a ramp up in monetization. Lots of golden goose available for $FB, so important to do it right rather than hastily monetizing it.

12/ $FB, YouTube, and $TWTR joined hands to define hate speech.

Good luck. They will probably need it.

End/ All my twitter threads here: mbi-deepdives.com/twitter-thread…

$GOOG earnings update tomorrow morning.

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@borrowed_ideas

30 Oct

1/ Thread: $AMZN 3Q'20 Update

Another quarter of mind-boggling numbers, but since it’s AMZN, that’s expected.

Let’s dive in.

2/ Few things stand out.

Most people understandably rave about AWS, especially given its high margin. But I was always amazed by AMZN’s 3P numbers.

Although we cannot “see” it, it’s highly profitable too (not as much as AWS though).

3/ International segment was again profitable for two consecutive quarters.

Strong volume in Europe and Japan.

AMZN is still in pretty early days in international markets. Launched AMZN Sweden yesterday. Also, launched Prime in Turkey.

Read 9 tweets

Mostly Borrowed Ideas

@borrowed_ideas

29 Oct

1/ Thread: $ETSY 3Q’2020 update

A month ago, I published a deep dive on $ETSY.

At that time, I hoped ETSY will make a complete mockery of my reverse DCF, and guess what, they are doing exactly that!

mbi-deepdives.com/etsy-a-handmad…

2/ Assuming mid-point of their GMS guidance for Q4, its GMS this year will be ~3% higher than my 2021 GMS estimates. This year’s FCF will be close to my 2023 estimates.

LOL.

Here’s snapshot of this quarter+ YTD numbers.

3/ Lots of interesting data points of buyers.

75% of current quarter’s GMS was from pre-covid buyer cohorts.

Non-mask GMS is +93%, but bit of a downer is people whose first buy was a mask are primarily buying only masks.

Mask is ~11% of total GMS and decelerating fast.

Read 12 tweets

Mostly Borrowed Ideas

@borrowed_ideas

23 Oct

1/ Thread: The Superpowers in Investing

Investing has been dubbed as the last liberal art.

Unless your name is Jim Simons, raw intelligence or brain power is perhaps not a sure-fire way to be successful investors.

2/ The more I think about it, the more convinced I am on just three superpowers in investing.

I. A bias for optimism
II. A better grip on time
III. The ability to imagine turbulent times

Let me elaborate.

3/ I. “Pessimists sound smart, optimists make money”.

Pessimism not only appears more rational, but it can also sound seductive to many.

Compared to pessimists' elaborate and complex theories, optimists often come up with very naïve sounding thesis.

Read 11 tweets

Mostly Borrowed Ideas

@borrowed_ideas

20 Oct

1/5 Thread: $AMZN vs The World

Last year, I started tracking America's top 15 brick-and-mortar retailers' sales vs $AMZN retail sales.

I just updated the chart. It's an astounding chart.

Please see below how I calculated this.

2/5 This is how incremental market share was calculated:

$AMZN conso sales-AWS Yr 1- Yr 0 divided by top 15 brick-and-mortar retailers' sales Yr1-Yr 0

The columns show $AMZN conso sales-AWS divided by top 15 brick-and-mortar retailers' sales

*AWS rev was available from 2012

3/5 These brick-and-mortar retailers generated ~$1.2 Trillion sales in 2019. The following companies were taken for the calculation:

$HD
$LOW
$WMT
$COST
$TJX
$DG
$ROST
$DLTR
$LB
$JWN
$BBY
$KSS
$GPS
$M
$TGT

Read 6 tweets

Mostly Borrowed Ideas

@borrowed_ideas

19 Oct

@jnovogratz

1/ Thoughts on @jnovogratz episode at @InvestLikeBest

As I'm originally from Bangladesh, this one really touched me, and would share my own experiences of growing up in Bangladesh while simultaneously sharing notes from the episode.

2/ First, let's start with this beautiful "Blue Sweater" story.

Yes, today we are much more connected. One thing I have seen Americans consistently underestimate is how closely America is followed by the majority of the world.

3/ I have Bangladeshi friends who never came to the US (and may never will) and yet their knowledge/interest on 2020 election would be among top 10 percentile in the US.

Of course, Hollywood has incredible influence as well. One thing that surprises me how America failed...

Read 13 tweets

Mostly Borrowed Ideas

@borrowed_ideas

12 Oct

@Jesse_Livermore

1/ Notes from @Jesse_Livermore episode at @InvestLikeBest

If you are yet to listen to this episode, here's a friendly suggestion: Do not put the audio speed more than 1x. The guest in this episode already talks at 2x speed.

Perhaps that's by design to fit in all his insights.

@Jesse_Livermore

2/ A few weeks ago, @Jesse_Livermore wrote an intriguing paper on "upside-down markets".

Here he explains what exactly an upside-down market is.

3/ Fiscal response materially differs from monetary response. Fiscal response increases people's unencumbered spending power.

Read 11 tweets

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