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Compound248 💰

@compound248

Apr 23

Capital One is a bellwether for the middle-class American consumer.

It sees who is spending what, where, and when.

$COF reported earnings today, providing early data that both supports and challenges the narratives around consumer behavior after Liberation Day.
🧵👇 1/x

2. Consumer Spending

Trends were stable through 3/31, but since then:

- iPhones: very modest consumer electronics "pull forward" $AAPL

- Autos: noteworthy spend uptick as consumers try to "get ahead of tariff impacts."

- Travel & Entertainment: T&E spend "growth" is easing, especially airlines (unclear if this means overall spend is down or it's growing slower)

3. Macro Forecast

Despite Q1 consumer credit performance being above previous expectations, $COF assumes a negative impact in its go-forward modeling and is watching "very very closely" to see if it's being conservative enough.

It chose to release less from allowances than it otherwise would have, due to "downside economic risks and greater uncertainty."

Read 10 tweets

Compound248 💰

@compound248

Mar 30

Tariffs are Beautiful

We were taught tariffs triggered a spiral into the Great Depression.

That tariffs are inherently inflationary.

But tariffs are just another tax.

As with any tax, it creates a set of incentives.

And, as far as taxes go, tariffs are beautiful.
🧵👇

2. Zoom Out

Governments need revenue to operate.

They overwhelmingly get their revenue by taking it from the people they serve, generally in the form of a tax.

There are better and worse taxes, ipso facto.

3. Avoid Punishing Healthy Behaviors

All taxes create incentives, intended or otherwise.

Incentives change behavior.

We should incentivize prosocial behavior - the actions that lead to a safer, healthier, and more prosperous nation.

What are the key choices?

Read 24 tweets

Compound248 💰

@compound248

Mar 28

It is hard to know what to make of xAI buying X.

My gut is it smacks of desperation.

On the surface, the deal values @X flat to Twitter’s 2022 takeout value, despite massive underperformance on financial metrics.

Sounds like a win of sorts for X shareholders… 🥇

…BUT
1/x 🧵👇

…it is a stock deal and X owners will now own 29% of combinedco, shifting from a near-pureplay social media bet in a HIGHLY strategic asset to an AI bet that’s very much on the cum plus a diluted share in Twitter.

Yes, xAI is a powerful model.

But not unusually so.
2/x

xAI has de minimis revenue, is hemorrhaging cash, & its prospective business opportunity seems VERY difficult given the relevant competition:

a) has a head start;
b) is murderers row; and
c) has existing business and GTM strategies to build on.
3/x

Read 6 tweets

Compound248 💰

@compound248

Dec 3, 2024

“Vox populi, vox dei.”

So goes one of Elon’s favorite quotes.

Today we learned while the voice of the people may be the voice of the gods, in Delaware there’s only one true god:

And her name is Chancellor Kathaleen McCormick.
1/x 🧵👇

Below is a brief thread breaking down her denial of Elon’s request for $55 billion in $TSLA stock.

2. Her original January 2024 ruling highlighted several flaws in the years old shareholder vote that was meant to award Elon massive stock compensation, if he delivered massive value to $TSLA shareholders.

Her determination wiped out Musk’s entire equity grant, stating Tesla failed to follow required procedures, which invalidated the original vote from years ago to grant the compensation package.

3. Tesla asked her to review her ruling.

Then, this past summer, Tesla held a new shareholder vote to (re)affirm the prior flawed compensation package.

Today’s 103 page decision responded to that request AND was meant to decide how much the plaintiffs’ lawyers should be paid.

Read 15 tweets

Compound248 💰

@compound248

Oct 31, 2024

1. $CVNA has 67x'd (!!) in less than 2 yrs, bottoming Dec '22 at $3.72 vs ~$253 today.

I'm sympathetic to the short-seller view, but also was at $10.

Praise Allah, I avoided this career-killer. Despite its sketchy history, it's short-seller death.

That said, inshallah.
🧵👇1/x

2. Last Q, Carvana sold 234k cars. while booking (heavily) Adjusted EBITDA of $429 million.

That's an EBITDA per unit sold of >$1,800, more than most used car retailers make in GROSS PROFIT per vehicle, much less EBITDA per unit.

A 12% Adj EBITDA margin for a used car retailer!

3. Compare Carvana's 12% Adj EBITDA margin to CarMax.

CarMax operates in the 3-4% range.

$KMX is the nation's largest used car retailer and is widely considered to be a well-run, direct competitor.

Read 14 tweets

Compound248 💰

@compound248

Nov 19, 2023

Rare footage of Mrs. B - Rose Blumkin.

Mrs. B founded Nebraska Furniture Mart in 1937 with $500 of savings, selling 90% to Warren Buffett’s $BRK 50 years later for $55 million.

Even at 94-years old, she continued to work 70 hour weeks, pricing rugs and carpets from memory. 🧵👇

“We like managers who are in love with their business…who feel like I do - I want to tap dance when I get to the office,” is how Buffett answered Adam Smith’s question about the Berkshire Hathaway culture.
1/x

Mrs B barely spoke English when she started NFM; she sought a $75 business loan and was denied.

50 years later, what did she think of the doubters?

“I still hate them. Anybody who does you dirty, you should never forgive and forget.” ☠️

- Rose Blumkin at 94 years young

Mrs. B had uncommon sense:

“God blessed me: anything I do, I make money.”

Mrs. B’s daughter on growing up:

“The customer was God - that came first and we came next,” she laughingly shared.

Read 11 tweets

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