W - Wayfair

[valueinvestor]

It's insane to think I could have retired if 7 weeks ago I had backed up the truck.

 

I was okay with missing the opportunity because I thought hindsight is 20/20 and the world was practically melting seven weeks ago to the point that the Chinese Government was apparently preparing a possible armed confrontation with the US.

 

However, reading that made me feel that it's not alright to miss it because I did not have to back up the truck and my truck would be still full after all of it. I was really looking for another GGP, and this could've been it. I clearly remember that this will go up at least 300-500% if the capital markets still allowed Wayfair to operate, so I'm going to remember this painful experience. Especially when I invested in Valeant near the highs on information way less concrete.

 

It goes to show that it makes no sense to time the market and buy when you see an opportunity, even with all the uncertainty. What did you have to lose? Only the capital you put up and even if you had a paper loss of 99%, you could always buy up more if you think the prospects are good.

 

WOW

 

It’s a fun ay statement they timing doesn’t matter with this “investment” when timing obviously needed to be perfect to get that multibagger return.

 

What do you mean? :-\

 

It wasn't about timing but rather pricing because at $30 you are getting the company for almost as much as they invested to build it with paying customers.  Even if you had the foresight to buy it at $30 - it went to $20. Therefore, one would've lost 33% of their investment in under a week.

 

I did not look at it as a trade, but rather a commitment to see it through. For whatever reason Wayfair was not able to raise cash, it would've gone a lot lower than $20. As mentioned, one did not have to back up the truck on this investment.

[chompsterama]

It's insane to think I could have retired if 7 weeks ago I had backed up the truck.

 

I was okay with missing the opportunity because I thought hindsight is 20/20 and the world was practically melting seven weeks ago to the point that the Chinese Government was apparently preparing a possible armed confrontation with the US.

 

However, reading that made me feel that it's not alright to miss it because I did not have to back up the truck and my truck would be still full after all of it. I was really looking for another GGP, and this could've been it. I clearly remember that this will go up at least 300-500% if the capital markets still allowed Wayfair to operate, so I'm going to remember this painful experience. Especially when I invested in Valeant near the highs on information way less concrete.

 

It goes to show that it makes no sense to time the market and buy when you see an opportunity, even with all the uncertainty. What did you have to lose? Only the capital you put up and even if you had a paper loss of 99%, you could always buy up more if you think the prospects are good.

 

WOW

 

It’s a fun ay statement they timing doesn’t matter with this “investment” when timing obviously needed to be perfect to get that multibagger return.

 

What do you mean? :-\

 

It wasn't about timing but rather pricing because at $30 you are getting the company for almost as much as they invested to build it with paying customers.  Even if you had the foresight to buy it at $30 - it went to $20. Therefore, one would've lost 33% of their investment in under a week.

 

I did not look at it as a trade, but rather a commitment to see it through. For whatever reason Wayfair was not able to raise cash, it would've gone a lot lower than $20. As mentioned, one did not have to back up the truck on this investment.

 

 

You literally told me this on a PM re: Wayfair:  "Wayfair is one of those companies that I'm not comfortably owning for decades on end, but as a trade, I was happy to oblige ... As an investment, I wouldn't touch with a ten-foot pole, not because Wayfair is a cesspool, but rather I do understand the business as much as I want or rather figure out how to topple Wayfair's competitive position (if any).

 

As a trade, the price was way too low on a technical and relative valuation basis."

[valueinvestor]

It's insane to think I could have retired if 7 weeks ago I had backed up the truck.

 

I was okay with missing the opportunity because I thought hindsight is 20/20 and the world was practically melting seven weeks ago to the point that the Chinese Government was apparently preparing a possible armed confrontation with the US.

 

However, reading that made me feel that it's not alright to miss it because I did not have to back up the truck and my truck would be still full after all of it. I was really looking for another GGP, and this could've been it. I clearly remember that this will go up at least 300-500% if the capital markets still allowed Wayfair to operate, so I'm going to remember this painful experience. Especially when I invested in Valeant near the highs on information way less concrete.

 

It goes to show that it makes no sense to time the market and buy when you see an opportunity, even with all the uncertainty. What did you have to lose? Only the capital you put up and even if you had a paper loss of 99%, you could always buy up more if you think the prospects are good.

 

WOW

 

It’s a fun ay statement they timing doesn’t matter with this “investment” when timing obviously needed to be perfect to get that multibagger return.

 

What do you mean? :-\

 

It wasn't about timing but rather pricing because at $30 you are getting the company for almost as much as they invested to build it with paying customers.  Even if you had the foresight to buy it at $30 - it went to $20. Therefore, one would've lost 33% of their investment in under a week.

 

I did not look at it as a trade, but rather a commitment to see it through. For whatever reason Wayfair was not able to raise cash, it would've gone a lot lower than $20. As mentioned, one did not have to back up the truck on this investment.

 

 

You literally told me this on a PM re: Wayfair:  "Wayfair is one of those companies that I'm not comfortably owning for decades on end, but as a trade, I was happy to oblige ... As an investment, I wouldn't touch with a ten-foot pole, not because Wayfair is a cesspool, but rather I do understand the business as much as I want or rather figure out how to topple Wayfair's competitive position (if any).

 

As a trade, the price was way too low on a technical and relative valuation basis."

 

What's your point?

 

It still in line with the PM I've sent you. Unless I remember this wrong, this is the second half of the PM I've sent you. In the first half, I mentioned why I thought @ $30 would be good, when you reached out to me.

[Spekulatius]

It's insane to think I could have retired if 7 weeks ago I had backed up the truck.

 

I was okay with missing the opportunity because I thought hindsight is 20/20 and the world was practically melting seven weeks ago to the point that the Chinese Government was apparently preparing a possible armed confrontation with the US.

 

However, reading that made me feel that it's not alright to miss it because I did not have to back up the truck and my truck would be still full after all of it. I was really looking for another GGP, and this could've been it. I clearly remember that this will go up at least 300-500% if the capital markets still allowed Wayfair to operate, so I'm going to remember this painful experience. Especially when I invested in Valeant near the highs on information way less concrete.

 

It goes to show that it makes no sense to time the market and buy when you see an opportunity, even with all the uncertainty. What did you have to lose? Only the capital you put up and even if you had a paper loss of 99%, you could always buy up more if you think the prospects are good.

 

WOW

 

It’s a fun ay statement they timing doesn’t matter with this “investment” when timing obviously needed to be perfect to get that multibagger return.

 

What do you mean? :-\

 

It wasn't about timing but rather pricing because at $30 you are getting the company for almost as much as they invested to build it with paying customers.  Even if you had the foresight to buy it at $30 - it went to $20. Therefore, one would've lost 33% of their investment in under a week.

 

I did not look at it as a trade, but rather a commitment to see it through. For whatever reason Wayfair was not able to raise cash, it would've gone a lot lower than $20. As mentioned, one did not have to back up the truck on this investment.

 

 

You literally told me this on a PM re: Wayfair:  "Wayfair is one of those companies that I'm not comfortably owning for decades on end, but as a trade, I was happy to oblige ... As an investment, I wouldn't touch with a ten-foot pole, not because Wayfair is a cesspool, but rather I do understand the business as much as I want or rather figure out how to topple Wayfair's competitive position (if any).

 

As a trade, the price was way too low on a technical and relative valuation basis."

 

I do t disagree that it can be a good trade. But fundamentally I am not sure of it matter show much money they invested in their customer acquisition, if they keep losing money on every one of them.  So I don’t know what Wayfair is worth, but something like this can be a good trade, I agree. Same with CVNA actually.

 

If Mr Market decides to never let this companies raise a dime they are both done for. However,  the optionality they the market keeps funding it is certainly there and in this side it worked out.

[ScottHall]

Markets be lulzy sometimes.

[undervalued]

What's avoiding Amazon to eat their lunch?

[jschembs]

What's avoiding Amazon to eat their lunch?

 

Fulfilling orders for heavy, bulky goods with high damage and returns rates at a 25% gross margin doesn't seem like an attractive business model?

[fareastwarriors]

As a customer, I have been very happy with my orders. The prices were cheaper / comparable to Amazon and no issues to note.

 

 

[Spekulatius]

As a customer, I have been very happy with my orders. The prices were cheaper / comparable to Amazon and no issues to note.

 

Same here. IKEA would also work, but they don’t subsidize shipping.

[jschembs]

As a customer, I have been very happy with my orders. The prices were cheaper / comparable to Amazon and no issues to note.

 

Same here. IKEA would also work, but they don’t subsidize shipping.

 

Anecdotally, I've experienced firsthand and read other instances that certainly justify the positive customer experience but call into question their ability to ever generate meaningful profits.

 

We ordered a ~$800 vanity on Wayfair. It arrived, and while there wasn't anything wrong with the product, my wife didn't like the coloration of the counter - she felt like it looked too fake. I didn't think it was much of a deal, but she called them and asked if they could swap it out for another? Instead they offered $200 discount to induce her to keep the vanity. Mind you, nothing wrong with the product itself, but with that discount they've effectively wiped out their gross profit.

 

Other anecdotes:

 

[review on their website] Overall I give the shelf 3 stars but I give Wayfairs customer service 5 stars. The item was delivered broken and Wayfair sent a second one out right away without making me repackage and return the broken item. The second one also arrived damaged but my husband was able to hammer the metal back into shape. The damage had to be the delivery service since both boxes were destroyed upon delivery to our front porch.

 

[Reader's Digest article] "Many furniture companies typically require you to ship any damaged furniture back to the store in order to get a full replacement, but not Wayfair. Their return policy states that, “If an item does arrive damaged or with parts missing, please notify us within 30 days.” But if Wayfair can’t replace the parts, they will have a carrier pick up the original package and send you a full replacement free of charge. These other retailers also have amazing return policies, too." https://www.rd.com/culture/wayfair-perk-can-save-big-bucks/

 

I think this all gets to the heart of their ultimate struggle to generate meaningful profits. The big ticket items, which drive the bulk of their revenue growth and gross profits (in $s, not necessarily %), are (a) hard to ship and deliver and (b) often a meaningful purchase that warrants, in the purchaser's mind, a higher degree of scrutiny and willingness to ask for returns when it isn't just right. Given the customer hasn't had a chance to see and feel the product in person, I'm guessing they get plenty of return requests just because a couch or table just doesn't look the same as it did on that rendered 3-D image.