1/14
Alibaba is mis-priced because the market still thinks “e-commerce”, but the real story is its cloud arm. Think AWS in 2015—only trading at a fraction of the parent’s value. Here’s why Alibaba Cloud is the clearest near-term catalyst and the biggest long-term driver of $BABA. 2/14
China's cloud market is catching up with massive potential:
• Gen-AI boom drives GPU demand for enterprises
• "New Infrastructure" & SOE digitization push by 2027
• Shift from on-prem to public cloud accelerates Growth curve steepening, but challenges remain.

IWG: A Wonderful Company at a Wonderful Price

- Why old IWG is already a good business at a great price
- Why IWG’s transformation to capital light growth is making it a wonderful business
- What it takes for a 10 bagger over 10ys

I believe my best work so far (link in bio). Spoiler: I’m addressing in depth the power dynamics between IWG and office owners and draw parallels with the hotel industry, where value creation at management companies (Hilton/ Marriott) has far outpaced returns to hotel owners or hotel REITs.

Marriott is a 31x without dividends since IPO in 1995

Once in a life A Once in a Lifetime Opportunity in German Residential Real Estate Stocks🏘️💰🇩🇪

1/ Vonovia, $LEG, $TAG, $GCP currently trade at a 67% discount to NAV, with a potential 200% mid term upside. It's a rare opportunity to buy into this market at a bargain price. 2/ Key stocks to watch: Vonovia, LEG Immobilien, TAG Immobilien, and Grand City Properties. They're trading at deep discounts to NAV, providing an attractive entry point for investors.

First Republic bank down 26% today. New low.

FED still fighting symptoms without any success.

How many more banks have to die until the @federalreserve grows a brain? This banking crisis will not end before the FED pivots hard

https://twitter.com/value_invest12/status/1635017815727181824

Deep Dive:
US Banking System Destabilized After Unprecedented Rate Hike Cycle -
The failure of Silicon Valley Bank is exposing systematic vulnerabilities that will likely force the FED to pivot.
modernvalueinvesting.substack.com/p/the-fed-has-… Banks borrow short term to lend out long term. This transformation of maturities relies on the stickiness of customer deposits.
While short term interest rates have increased above 4.5%, the average annual percentage on deposits is 0.23%.
What is going on?

AI Investments by $META are finally paying off in a big way. „Significantly boosting performance“

Great Meta writeup:
$META

wedgewoodpartners.com/_files/ugd/d2a… WhatsApp Penetration Rate

„In the last twelve months, Facebook spent $32.6 billion on R&D, making it one of the largest corporate spenders on research and development in the world“

$META aswathdamodaran.blogspot.com/2022/11/meta-l… Profitability:

„…the online advertising business remains a money machine, generating sky-high margins.“

Carvana is extremely path dependent at this point. Imo, could be anything from zero to 10 bagger next 12 months.

I believe with the surprise inflation data from yesterday, it’s now the short sellers that are sitting on the hot seat…at least until Q4 numbers in Feb 23.
$CVNA
1/7 Until yesterday, Carvana was quickly approaching $6 and less - an implied market cap that would have made any equity raise pointless.

But that path has potentially changed yesterday.
2/7

Pleased to share my $META write-up is out!

Why Meta is a great business with a long growth runway and a growing moat.

Bear case: 15% CAGR next 10 years with 4% growth
Base case: 11x next 10 years, still writing off metaverse

Details below:
modernvalueinvesting.substack.com/p/meta-platfor… Meta should return to significant revenue growth next year, overcoming temporary macro-, IDFA-, and short video challenges.

Long term investors to benefit from multiple expansion: In 10 years, metaverse overhang will be gone either due to success, or Zuckerberg giving up

Meta's Project Cambria Headset Might Work Like A Wearable Chromebook

“The headset, known as project Cambria, will have a color pass-through, allowing high-quality augmented reality effects. This will be compelling for AR developers.”
$META filmsnewsfeed.com/article/metas-… “However, the real breakthrough will come in the form of smart glasses that are easier to wear for long periods in daily life.”

“…big step up from the Quest 2, running the same apps and games more smoothly and at a higher resolution.”

Rob Vinall's H1 letter is out:

„The tech sector is very much out of favour today, but it strikes me as one of the best places to park your cash if inflation is your biggest concern.“ Is the business owner fund over-indexed to tech?

„If “tech” is defined as the modern incarnation of old industries, then frankly, I would insist on 100% exposure.“

Carvana short & mid term goals - including implications for valuation

Gross profit per unit (GPU):

• Q2: $3,453
• Guidance 2023: >$4000
• Mid term: clear roadmap back to $4,500 SG&A

Q4 goal of ~$4,000 SG&A per unit

Mid term goal of ~$3,000 SG&A

Opendoor Q2 Notes:
• revenue up 254% to $4.2b
• adjusted Ebitda $218m
• Ebitda margin of 5.2% from 2.2%
• Inventory of 17k homes, up 143%
• Adress coverage up 50%
• Offer requests up 69% Exclusive partnership with Zillow

"Opendoor offers will be available on Zillow. Potential sellers on Zillow apps and sites may request and view an offer directly from Opendoor and easily compare it to an open-market sale using a real estate agent."

-> customer acquisition!

$Meta Q2:

• Revenue up 4% (constant currencies)
• Family active people up 4%
• Even Facebook DAU up 3%
• Ad impressions up 15%(!)
• Price per ad down 14%(!!)

-> IMO not that bad given IDFA/Apple changes plus macro environment

Effectively ad pricing was the only problem. I think brighter days are ahead for ad pricing for 2 reasons:

1) much increased ad supply was meeting a very difficult demand environment in Q2, due to macro. This will pass.

2) Effectiveness of ads was reduced by IDFA/Apple changes. I consider this a one time reset.

Some thoughts on offline to online transition -

In Food delivery Doordah, Meituan are at ~0.6x 2022 GMV; Delivery Hero now at 0.3x a bit cheaper.

The space is very competitive, vouchers are around galore. Seems a bit of a stretch to pull even more of that online. While eating out is a nice experience, especially as the world reopens Post Covid. Delivery costs will never go away.

Regarding online home buying and selling, Opendoor is also available at ~0.6x gmv

In used cars, Auto1 in Europe is also at ~0.6x 2022 GMV.

Growing importance of independent artists on Spotify’s revenue. $SPOT

Upstart $UPST
• AI-based lending platform in hyper growth mode
• approves 71% of loans instantly
• allows fairer rates for borrowers, more profitability for banks 💥
• doesn’t take credit risk themselves
• CEO was formerly president of Google cloud cnbc.com/video/2021/08/… • 25 banks and credit unions on platform today, up from 10 at IPO a few months ago.
• CEO would be shocked if they wouldn’t have hundreds in a few years
• currently expanding from consumer loans to auto loans

Portfolio as of August 27:

10% $SFTBY
10% $AMZN
10% $CRM
10% $FB
10% $NFLX
10% $HFG
10% $CELH
5% $KAHOT
5% $UPST
5% $PTON
5% $TDOC
5% $Z
5% $SPOT 1) The current portfolio is clearly leaned towards continued digitalization and growth. It is constructed for the long term. I’d love to ride all these names for the decade. This would be tax efficient.

Israel study finds antibodies from natural infection with Covid decrease 5% per month vs 40% per month with biontech.

Quite the significant news IMO and well explains the very concerning data from Israel (huge wave with almost as many deaths as in prior waves)

$BNTX 😬

New position in Zillow (5%) $Z:
• I believe iBuying is the future of real estate, similar to how Carvana digitalizes used car transactions.
• the massive Zillow.com platform provides $Z with a unique advantage over competitors. Not only does Zillow’s (traditional) IMT segment throw off substantial free cash flow, it also brings them closer to the transaction in terms of finding potential buyers and sellers.