A Man of the Markets

I’ve been quiet, but I’m a man of the markets. I might not be posting, but I’m studying the markets.

• Snapchat – The newest meme stock, thanks Professor. I don’t get the point though, the balance sheet isn’t clean. They aren’t profitable. DAUs in the US are shrinking. They aren’t growing. What’s the bull case? Well, as Professor Galloway so eloquently stated… it’s that their founder wakes up from a 10-year delusion. That doesn’t meet my (admittedly low) standards. To me, the real bull case is: 1. Acquisition, 2. Meme Nonsense. Ultimately, it’s a clown car that drove into a goldmine.
• Roku – Sometimes you are saved by the acquisition. I overthought my way into Roku, but ultimately it led to a decent return because I was very conservative on my entry point. I think that’s a theme, find interesting companies, with strong execution, at reasonable prices. What’s the difference between Snapchat and Roku? Execution. Yet, the returns could be similar if acquisition is the end result for Snapchat.
• AI – long story short, intelligence is here and we are all fucked. Whether it’s Fable or open source models, we are at the point that the models are smarter than us, they just need the context. Building context will take a few years, but it’s just a matter of time before the robots take us all.
• Duolingo – Maybe I’m a hypocrite, what’s the difference between Snapchat and Duolingo? Well, Duolingo has a better proven track record of growth. Duolingo has already been proven profitable (albeit sort of by accident). I see the bull case for Duolingo a lot clearer. Duolingo trades at a higher Price to Sales ratio than Snapchat, but on Price to Earnings (far more important), Duolingo is trading at a very reasonable valuation of 16x.
• Spotify – Not a lot to say here, the thesis is intact. Just keep buying.
• DoorDash – An interesting company, with strong execution. Is it at a reasonable price? Imma keep thinking.

That’s all for now, let’s study the markets, learn from our mistakes and make some money.