Just published my Deep Dive on $VEEV

read the full Deep Dive here: mbi-deepdives.com/veev/

Notes from $TXN Capital Management Call today

"Market environment remains weak, with shipments below 2019 levels." growth opportunities in industrial and automotive

I received a couple of DMs asking about "hey, what's going on in Bangladesh"

While I left Bangladesh in 2017, my almost entire family still lives there. So I'm keenly aware of what's going on. I'll briefly cover what happened and the implications. let's start with the end result. The Prime Minister (PM) Sheikh Hasina or SH (who's the Head of State in Bangladesh) fled the country after facing intense protest from Bangladeshi students. Her exact location doesn't seem to be confirmed yet (rumored to be India or EU).

Incredibly lucky to have bought these puts exactly a month ago. +130%.

Made several (but slight) changes in the portfolio today. More below.

https://twitter.com/borrowed_ideas/status/1809331456961106122

closed my $AMZN Jan 2025 $160 calls that I wrote. 43% gain in this trade, but feels like just another lucky trade as I now think AMZN is undervalued (and I was likely too cautious to hedge it at $160 back then). Kept the $55 calls unhedged now.

https://x.com/borrowed_ideas/status/1750915863551881420?s=46&t=0KJOzhgI13qxA_GGFlVxrw

Going through insurance brokers earnings now. $AON and $MMC finally growing in tandem after AON lagged MMC consistently since 2Q'21.

$BRO is the clear winner in organic growth for this quarter. (disc: long $BRO and $AON) Looking closer between MMC and AON.

Notes on $TXN 2Q'24 Call

After sequential revenue decline in China for 7 consecutive quarters, this quarter experienced ~15-20% growth across all segments in China. Europe and Japan are also in early phase of the upcycle. More commentary on China:

"the market is more competitive in China, but we can compete and we can win business in very attractive margins"

Some thoughts on Bioprocessing after listening to $DHR and $SRT calls I received some push back after mentioning in my $SRT Deep Dive that DHR/SRT have pricing power.

Despite destocking and overcapacity concerns, DHR is saying they aren't seeing significant pricing pressure

Imagine you're building a portfolio of stocks for the next 10 years. Let's assume ~30% stocks in S&P 500 will outperform and the rest ~70% will underperform the $SPY total return after 10 years. Assume, when you stumble onto an outperformer, you correctly pick it 70% of the time. And when you come across an underperformer, you're also right 70% of the time to avoid it.

So, here's what the decision tree looks like:

another great interview of @danielgross and @natfriedman by @benthompson

Some notes from the interview:

on Japan:

"...We’ve been puzzled by why TSMC’s margins aren’t better for a little while. Why are they not taking more of the margin? And I think you just said it, they’ve been through so many rounds of boom and bust and they’ve outlived a lot of people who made the wrong moves."

...I find a really interesting mispriced thing in the world might be Japan, the entire country.

...if you’re trying to consolidate all your bets on semiconductors, Japan’s a pretty interesting geography, because I think they’re going to have all these components at the end of the day, in basically one single country.

...What I sort of wonder is in a world where, if AI really happens, maybe the 2030s are the decade of Japan, if they really are able to manufacture all of these components that have to get offshore from Taiwan for various reasons." "Don't bet against Zuck"

So I got my Ray-Ban Meta Smart glasses today. Based on my first impressions, here’s what I think about it.



By far the best aspect of the glass is integration with Spotify and audio quality.

Unless you stand really close to each other, sound is not quite perceptible to others even though it is quite crisp to you.

90% probability that I have already bought my last AirPods.

$AMZN 3Q'23 Update

Imagine opening Amazon’s earnings report 5 years from now and what do you think you might hope you paid more attention to? It’s very unlikely to be AWS topline growth rate this (or any) quarter. If I have to guess, it’s the shipping+ fulfillment costs related developments that you would find more consequential 5 years from now.

I’ll explain why but let’s first take a look at some numbers quickly before going back to that discussion.

Thread on $META follow-up call and some more thoughts on the quarter Meta's DAU/MAU is at all-time high. Consumers vote with their time whereas "Intellectual Yet Idiot" class remains busy dissecting "surveillance capitalism"

chart h/t @east_cap

$META 3Q'23 Update

Meta had a terrific third quarter which makes the after-hours reaction (down ~3%) tad bit surprising, but perhaps understandable given the wider range of scenarios for advertising going forward.

Here are my highlights from tonight’s call. Since 4Q’19, Meta added 880 Mn Daily Active Users/People (DAU/DAP) to its Family of Apps (FOA) properties.

Given Snap currently has 406 mn DAU, this means Meta added two “Snap” (and then some) in less than four years!!

$GOOG 3Q'23 Update

While Google Service segment did just fine, Google Cloud’s pace of deceleration in topline was a bit disappointing.

Here are my highlights from the call tonight. After four consecutive quarters of single digit growth, Google returned to double digit growth this quarter.

Both Search and YouTube grew by double digit, but Google cloud’s topline growth came down from ~28% last quarter to 22.5% this quarter.

1/4 Last year, I lamented how even if you knew in 2017 that Meta's aggregated revenue and FCF for the "next" 5 years were underestimated by analysts by $50 Bn and $40 Bn respectively, you would actually make 0% over 5 years. 2/4 What I didn't know when I posted this in June 2022 was the stock would go down another 50% before it bottomed.

I knew almost anything is possible in the market, but I had a much more visceral understanding of that when Meta hit $90.

Thread on $ADYEN/ $ADYEY

Lots of pushback on my back-of-the-envelope math on Adyen. While I don't expect those pushbacks to evaporate, here's my more detailed and granular math on Adyen. Let's start with TPV.

To keep things simple, I looked at $V and $MA reported txn volume and assumed it as Adyen's "TAM". It's a pretty good approximation although obviously not perfect.

"perfect is the enemy of good"

If personalized ads is simply banned in the EU, it may not be worth showing any ads at all.

Given such context, it is hard to rule out that Meta may go full subscription mode in the EU in not-so-distant future.

Let's imagine Meta's Armageddon scenario: behavioral ad is banned. The bad news is building world class digital ad infrastructure, especially post-ATT and GDPR was one of the key moats for Meta.

Isn't it also bad for Meta because people will simply not pay to use social media? I'm little skeptical about this claim.

$AMZN 2Q'23

This was perhaps the best Amazon earnings call from my recent memory, especially on Amazon Retail. Not surprising that the stock was +8% in after hours.

Here are my highlights from tonight’s call. Revenue

3P, subscription, and AWS grew by mid to high teen while ad segment increased by 20%+

The mix-shift from product to services in Amazon continues as services mix increased from ~40% in 2018 to ~60% in 2023.

Let’s start more segment level discussion with AWS.

One of my counterintuitive beliefs is *almost* every active investor deeply underestimates how challenging active investing is. Almost nobody is immune from this.

Why? because there is a profound dichotomy between an active investors' lived reality and the actual reality. Let me explain both qualitatively and quantitatively.

$GOOG 2Q'23 Update

“With 15 products that each serve half billion people and 6 that serve over 2 billion each, we have so many opportunities to deliver on our mission.”

Here are my highlights from Alphabet’s call tonight. Topline grew +9% FXN. While Google Services revenue growth was flat in 1Q’23, it was +5.5% in 2Q’23, with growth re-accelerating in every component of Google Services.

Google Cloud maintained its momentum with ~28% YoY growth (same as it was in 1Q’23).

$PYPL thread

I received quite a few questions on my assumptions related to PYPL's numbers, along with some decent pushbacks. In this thread, I will elaborate my numbers in more granular detail.

Let's start. I initially segmented PYPL in two segments: a) button, and b) ex-button

Many suggested it's a bit simplistic and runs the risk of missing important nuances. I agree. I just wanted to do some quick and dirty math, but let's get into the weeds here.