lucasnascimento

How do you think about the voting rights being in control of Ernie's father? How can I sleep well as the owner of the company was once guilty in relation to fraud? I really like the company and Ernie (the CEO), but that ownership structure is frightening. I am more inclined to believe that the father's past story can be a potential source of alpha given that lots of funds just skip looking at this company because of his track record, so I am looking for compelling arguments on why the structure may not be a problem on this case. Thanks

Honest question: why doesn't Square try to make their own accounting software to compete with Quickbooks? It seems to be a very high margin business, and it appears to be easy to cross-sell it to their platform's customers. Maybe I don`t really understand the moat around accounting software or how painful it can be to develop this kind of software. Does anybody have a clue?

Honest question: why don't Shopify try to make their own accounting software to compete with Quickbooks? It seems to be a very high margin business, and it appears to be easy to cross-sell it to their platform's customers. Maybe I don`t really understand the moat around accounting software or how painful it can be to develop this kind of software. Does anybody have a clue?

+210% since the last post here. Ultra-high ROIC, good growth, but not much operating leverage. What's priced in today?

Hey, How do you guys translate Annual Reports of Chinese equities that do not offer English versions? Thanks

Anyone knows why Palo Alto's margins are so low relative to other firewall peers (Fortinet, Juniper, Cisco)? Having a hard time here on understanding PANW profitability.

JD story turned into a disaster this year because of the unexpected depth of Logistics losses and the much higher than expected R&D investments, which are masking the underlying margin improvement of the business. IMO, it was a execution flaw within JDL (management clearly didn't anticipate the struggle they would have in the first years of operation in convincing sellers to adopt their solution) and also there was a serious communication error, as they could have better communicated the rapid R&D ramp-up and most importantly the insane CAPEX ramp-up for this year. Core business thesis is intact (shift to 3P/Ad which are growing faster, is really driving higher margins), but JDL/R&D led to significant earnings revisions for the next 1-3 years. Those who invested late 2017/early 2018 with the core margin improvement thesis were not wrong. Those unexpected losses, the consumption slowdown and moreover Liu's arrest (!!) have come at the same time. Really really unfortunate. On the flipside, seems like JDL will turn profitable on a gross basis next year (from ~ -20% GM this year - bizarre margin take off) and R&D will stabilize and bear fruit in the coming quarters. Logistics moat seems mostly intact. JDL monetization fund will also begin to yield returns. From a macro level also, the only way for China is up. Consumption rebound will help 3C/electronics. SOTP, P/Sales and P/FCF also point to significant misprice. If JD delivers 80% of FCF they did in 2017 (w/ some capex normalization and no one-offs in CFO like this year), you have a FCF Yield of 8% 2019E. Worth taking a look.

Good points. However I think you cannot assume that they were still married in the moment he was in Minnesota. You can see that his wife hasnt been posting on Instagram about them since June. A marriage can end overnight and people can get to know it long time later. This whole story is confusing AF

Imagine if she reports it... extreme downside risk

How can anyone know what the margins for EV cars are going to look like? FWIW, Daimler also has a very good truck business. Management said in a conference call. 4Q17 maybe, have to confirm.

Margins will go down because they will build a lot of EVs with HALF the gross margin of ICEs. First point. Second point: EV ecosystem risk. Too much competition and uncertainties around adoption (high dependancy on government incentive and technology to make it really cheaper than ICEs). The bright side is that it is a wonderfully run company. But I'm ok, don't wanna pick sides in that EV battle.

I don't have an opinion on BABA for a variety of reasons but one doesn't preclude the other. Duopolies can be very profitable. I think of JD.com as an asset play -- the longer their revenue grows at a rapid pace, the larger, more ingrained and more valuable the infrastructure related to the distribution of merchandise. That is to say, I view their revenue growth as fueling the growth of physical infrastructure and the margins will work them selves out overtime if that revenue basis is sufficiently large. It's hard to see economies of scale for things like fulfillment, as this is pretty labor intensive, but marketing, technology and general administration should require less as a percentage of revenue as revenue grows. There is also an argument to be made about gross margins as well. There is a big argument on gross margins: 3P and Advertising mix improving (70/80% GM growing at ~30/40%)

After reading the attorneys opinions, common outcomes of rape allegations and Liu's/JD approach to the story, I feel confused. I think if it the allegation was a nonsense, Richard Liu should have already talked about it publicly or showed to the public that he is confident that nothing will happen. The worst part for me is that even if police don't charge him, there will always be uncertainty regarding to what really happened that night and therefore the trust on him will never be the same (assuming he remains silent about the case, which is probable). Also, the reflexitivity regarding the stock price on the business can be relevant. For those who don`t know, all the management (12 people) receives USD1.8mn in cash bonuses altogether. This is just 150k per individual per year. The remaining is share-based. Liu receives no cash bonus. I mean, this is a serious incentive problem (when share prices fall abruptely in one year; the structure itself is very good).

Do you guys remember some cases in which big investors dumped positions but stock trended higher monhts/years later? Peter Thiel on Facebook is the only that came in my mind.

Do you know if the Base hit investing membership is worth it?