Offshore
Video
The All-In Podcast
Chamath and Larry Summers Debate the Market Reaction to Trump's Tariffs
@LHSummers:
"If this is such a terrific thing, why do markets think it's so terrible for the American economy?"
"Maybe the market's just completely wrong ... but the job of markets is to look forward."
"It's to look passed the immediate."
"It's to see what the long run consequences are going to be."
"And markets are making a pretty devastatingly negative judgment on this step."
@chamath:
" Larry, that's not true."
" So let's just establish a couple facts about 'the markets.'"
"Number one, there are two markets and they behave totally differently, and sometimes inversely to each other."
"There's the stock market and there's the bond market."
1) Stocks: mean reversion
"With respect to the stock market, what they are debating, and you're right Larry, is what is the effective long-term rate of return a dollar needs to generate in order to pay me back that dollar?"
"That is what the fundamental stock market does."
"And what we've seen for many years with trade imbalances, trade deficits, and close-to-zero interest rates, of which more of that happened under Democrats than Republicans, we have allowed the stock market to inflate past historical averages."
" What we've actually seen happen in the last week is what most people would call mean reversion."
"The stock market is still way above where it was last year, two years ago, three years ago."
"What has happened is that the forward multiples have compressed. So that's number one. That's a fact."
2) Bonds: it's possible a major trade blew up
"And then with respect to bonds, what we are seeing now is there are two very complicated issues."
"In the last two days, we saw one part of the bond market totally get out of whack."
"And what we know is that the yields changed materially in a very acute way, which is atypical of how the bond market typically digests a philosophical change in approach to policy."
" What we heard in the last 24 hours is a lot of this move may have been attributed to an enormous levered bet on US treasuries by a Japanese hedge fund."
" It will take three, and four, and five, and six weeks for us to really know."
3) Private credit: something to watch closely
" Separately, what we do know, though, where the structural complexity of the market — and this is where, Larry, I agree with you — is acute and important to observe is in the credit markets for private companies."
"And that is where you have to pay a lot of attention."
tweet
Chamath and Larry Summers Debate the Market Reaction to Trump's Tariffs
@LHSummers:
"If this is such a terrific thing, why do markets think it's so terrible for the American economy?"
"Maybe the market's just completely wrong ... but the job of markets is to look forward."
"It's to look passed the immediate."
"It's to see what the long run consequences are going to be."
"And markets are making a pretty devastatingly negative judgment on this step."
@chamath:
" Larry, that's not true."
" So let's just establish a couple facts about 'the markets.'"
"Number one, there are two markets and they behave totally differently, and sometimes inversely to each other."
"There's the stock market and there's the bond market."
1) Stocks: mean reversion
"With respect to the stock market, what they are debating, and you're right Larry, is what is the effective long-term rate of return a dollar needs to generate in order to pay me back that dollar?"
"That is what the fundamental stock market does."
"And what we've seen for many years with trade imbalances, trade deficits, and close-to-zero interest rates, of which more of that happened under Democrats than Republicans, we have allowed the stock market to inflate past historical averages."
" What we've actually seen happen in the last week is what most people would call mean reversion."
"The stock market is still way above where it was last year, two years ago, three years ago."
"What has happened is that the forward multiples have compressed. So that's number one. That's a fact."
2) Bonds: it's possible a major trade blew up
"And then with respect to bonds, what we are seeing now is there are two very complicated issues."
"In the last two days, we saw one part of the bond market totally get out of whack."
"And what we know is that the yields changed materially in a very acute way, which is atypical of how the bond market typically digests a philosophical change in approach to policy."
" What we heard in the last 24 hours is a lot of this move may have been attributed to an enormous levered bet on US treasuries by a Japanese hedge fund."
" It will take three, and four, and five, and six weeks for us to really know."
3) Private credit: something to watch closely
" Separately, what we do know, though, where the structural complexity of the market — and this is where, Larry, I agree with you — is acute and important to observe is in the credit markets for private companies."
"And that is where you have to pay a lot of attention."
tweet
Dimitry Nakhla | Babylon Capital®
10 High-Quality Stocks on Sale 💵
1. MercadoLibre $MELI | NTM P/E 43x 🤝
2. MSCI Inc $MSCI | NTM P/E 32x 🌐
3. Mastercard $MA | NTM P/E 32x 💳
4. Amazon $AMZN | NTM P/E 29x 📦
5. S&P Global $SPGI | NTM P/E 27x 📈
6. Synopsys $SNPS | NTM P/E 27x 👾
7. ASML Holding $ASML | NTM P/E 25x ☀️
8. Google $GOOG | NTM P/E 18x ☁️
9. Lam Research $LRCX | NTM P/E 18x 🖨️
10. Novo Nordisk $NVO | NTM P/E 17x 🧬
tweet
10 High-Quality Stocks on Sale 💵
1. MercadoLibre $MELI | NTM P/E 43x 🤝
2. MSCI Inc $MSCI | NTM P/E 32x 🌐
3. Mastercard $MA | NTM P/E 32x 💳
4. Amazon $AMZN | NTM P/E 29x 📦
5. S&P Global $SPGI | NTM P/E 27x 📈
6. Synopsys $SNPS | NTM P/E 27x 👾
7. ASML Holding $ASML | NTM P/E 25x ☀️
8. Google $GOOG | NTM P/E 18x ☁️
9. Lam Research $LRCX | NTM P/E 18x 🖨️
10. Novo Nordisk $NVO | NTM P/E 17x 🧬
tweet
Offshore
Photo
Quiver Quantitative
Wow.
In May, we noticed a US politician buying stock in a German arms manufacturer.
The stock has now risen 195% since we posted this report.
195%
tweet
Wow.
In May, we noticed a US politician buying stock in a German arms manufacturer.
The stock has now risen 195% since we posted this report.
195%
BREAKING: Representative Susie Lee just bought stock in the German arms manufacturer Rheinmetall, $RNMBY.
She is the first U.S. politician we have seen buy Rheinmetall stock.
Lee sits on the House Appropriations Subcommittee on Military Construction. https://t.co/hiNwf8AsRK tweet
Offshore
Photo
The Kobeissi Letter
Volatility in US Treasuries has been truly historic:
The 10-year note yield surged over 50 basis points in one week, marking the largest weekly increase since 2001.
Over the last 40 years, there have been just a few other occurrences when the 10-year note saw such a significant rise.
The 30-year Treasury yield has experienced daily swings of up to 32 basis points, the largest since 2020.
Keep watching the bond market.
tweet
Volatility in US Treasuries has been truly historic:
The 10-year note yield surged over 50 basis points in one week, marking the largest weekly increase since 2001.
Over the last 40 years, there have been just a few other occurrences when the 10-year note saw such a significant rise.
The 30-year Treasury yield has experienced daily swings of up to 32 basis points, the largest since 2020.
Keep watching the bond market.
tweet
Offshore
Photo
Dimitry Nakhla | Babylon Capital®
RT @DimitryNakhla: A quality valuation analysis on $MELI 🧘🏽♂️
•NTM P/E Ratio: 42.45x
•1-Year Mean: 47.73x
As you can see, $MELI appears to be trading below fair value
Going forward, investors can receive ~12% MORE in earnings per share 🧠***
Before we get into valuation, let’s take a look at why $MELI is a great business
BALANCE SHEET✅
•Cash & Short-Term Inv: $3.70B
•Long-Term Debt: $2.82B
$MELI has a strong balance sheet, an ok BB+ S&P Credit Rating & 48x FFO Interest Coverage
RETURN ON CAPITAL🆗➡️✅
•2019: (4.8%)
•2020: 3.7%
•2021: 8.1%
•2022: 14.7%
•2023: 25.7%
•2024: 23.0%
RETURN ON EQUITY🆗➡️✅
•2019: (14.2%)
•2020: (0.1%)
•2021: 5.2%
•2022: 28.7%
•2023: 40.3%
•2024: 51.5%
$MELI has strong and improved return metrics, highlighting the financial efficiency of the business
REVENUES✅
•2019: $2.30B
•2024: $20.78B
•CAGR: 55.30%
FREE CASH FLOW✅
•2019: $314.29M
•2024: $7.05B
•CAGR: 86.32%
NORMALIZED EPS✅
•2019: ($3.71)
•2024: $37.69
SHARE BUYBACKS❌
•2019 Shares Outstanding: 48.69M
•LTM Shares Outstanding: 50.70M
MARGINS🆗➡️✅
•LTM Gross Margins: 52.7%
•LTM Operating Margins: 12.7%
•LTM Net Income Margins: 9.2%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~12% MORE in EPS
Using Benjamin Graham’s 2G rule of thumb, $MELI has to grow earnings at a 21.23% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2025 - 2027 EPS growth over the next few years to be more than the (21.23%) required growth rate:
2025E: $47.04 (24.8% YoY)
2026E: $65.23 (38.7% YoY)
2027E: $85.38 (30.9% YoY)
$MELI has an ok track record of meeting analyst estimates ~2 years out, but let’s assume $MELI ends 2027 with $85.38 in EPS & see its CAGR potential assuming different multiples
38x P/E: $3244💵 … ~19.5% CAGR
36x P/E: $3073💵 … ~17.2% CAGR
34x P/E: $2902💵 … ~14.7% CAGR
32x P/E: $2732💵 … ~12.2% CAGR
30x P/E: $2561💵 … ~9.6% CAGR
As you can see, $MELI appears to have attractive return potential IF we assume >32 earnings (a multiple well-justified by its growth rate & moat)
$MELI boasts an expansive growth trajectory, fueled by powerful network effects that should drive sustained momentum
Key factors contributing to its promising outlook include 🔑
1. Margin expansion
2. Unparalleled access to Latin America's burgeoning economy
3. Network effects that produce self-reinforcing dynamics ensuring long-term competitiveness, among other things
Those buying $MELI today at $1996💵 are buying a great business for a great price, with a decent margin of safety — these growth rates have to be revised down substantially for $MELI to miss the mark, even if the company grows earnings at 22% CAGR over the next 5 years, shareholders will likely end up with a great result
I consider $MELI a steal closer to $1790💵 (~10% below today’s price) where I can reasonably expect ~11% CAGR while assuming a very conservative 26x end multiple, ensuring a large margin of safety
#stocks #investing
___
𝐃𝐈𝐒𝐂𝐋𝐎𝐒𝐔𝐑𝐄‼️: 𝐓𝐡𝐢𝐬 𝐢𝐬 𝐍𝐎𝐓 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐀𝐝𝐯𝐢𝐜𝐞. 𝐁𝐚𝐛𝐲𝐥𝐨𝐧 𝐂𝐚𝐩𝐢𝐭𝐚𝐥® 𝐚𝐧𝐝 𝐢𝐭𝐬 𝐫𝐞𝐩𝐫𝐞𝐬𝐞𝐧𝐭𝐚𝐭𝐢𝐯𝐞𝐬 𝐦𝐚𝐲 𝐡𝐚𝐯𝐞 𝐩𝐨𝐬𝐢𝐭𝐢𝐨𝐧𝐬 𝐢𝐧 𝐭𝐡𝐞 𝐬𝐞𝐜𝐮𝐫𝐢𝐭𝐢𝐞𝐬 𝐝𝐢𝐬𝐜𝐮𝐬𝐬𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭.
𝐓𝐡𝐞 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐜𝐨𝐧𝐭𝐚𝐢𝐧𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭 𝐢𝐬 𝐢𝐧𝐭𝐞𝐧𝐝𝐞𝐝 𝐟𝐨𝐫 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐩𝐮𝐫𝐩𝐨𝐬𝐞𝐬 𝐨𝐧𝐥𝐲 𝐚𝐧𝐝 𝐬𝐡𝐨𝐮𝐥𝐝 𝐧𝐨𝐭 𝐛𝐞 𝐜𝐨𝐧𝐬𝐭𝐫𝐮𝐞𝐝 𝐚𝐬 𝐢𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐚𝐝𝐯𝐢𝐜𝐞 𝐭𝐨 𝐦𝐞𝐞𝐭 𝐭𝐡𝐞 𝐬𝐩𝐞𝐜𝐢𝐟𝐢𝐜 𝐧𝐞𝐞𝐝𝐬 𝐨𝐟 𝐚𝐧𝐲 𝐢𝐧𝐝𝐢𝐯𝐢𝐝𝐮𝐚𝐥 𝐨𝐫 𝐬𝐢𝐭𝐮𝐚𝐭𝐢𝐨𝐧. 𝐏𝐚𝐬𝐭 𝐩𝐞𝐫𝐟𝐨𝐫𝐦𝐚𝐧𝐜𝐞 𝐢𝐬 𝐧𝐨 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞 𝐨𝐟 𝐟𝐮𝐭𝐮𝐫𝐞 𝐫𝐞𝐬𝐮𝐥𝐭𝐬.[...]
RT @DimitryNakhla: A quality valuation analysis on $MELI 🧘🏽♂️
•NTM P/E Ratio: 42.45x
•1-Year Mean: 47.73x
As you can see, $MELI appears to be trading below fair value
Going forward, investors can receive ~12% MORE in earnings per share 🧠***
Before we get into valuation, let’s take a look at why $MELI is a great business
BALANCE SHEET✅
•Cash & Short-Term Inv: $3.70B
•Long-Term Debt: $2.82B
$MELI has a strong balance sheet, an ok BB+ S&P Credit Rating & 48x FFO Interest Coverage
RETURN ON CAPITAL🆗➡️✅
•2019: (4.8%)
•2020: 3.7%
•2021: 8.1%
•2022: 14.7%
•2023: 25.7%
•2024: 23.0%
RETURN ON EQUITY🆗➡️✅
•2019: (14.2%)
•2020: (0.1%)
•2021: 5.2%
•2022: 28.7%
•2023: 40.3%
•2024: 51.5%
$MELI has strong and improved return metrics, highlighting the financial efficiency of the business
REVENUES✅
•2019: $2.30B
•2024: $20.78B
•CAGR: 55.30%
FREE CASH FLOW✅
•2019: $314.29M
•2024: $7.05B
•CAGR: 86.32%
NORMALIZED EPS✅
•2019: ($3.71)
•2024: $37.69
SHARE BUYBACKS❌
•2019 Shares Outstanding: 48.69M
•LTM Shares Outstanding: 50.70M
MARGINS🆗➡️✅
•LTM Gross Margins: 52.7%
•LTM Operating Margins: 12.7%
•LTM Net Income Margins: 9.2%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~12% MORE in EPS
Using Benjamin Graham’s 2G rule of thumb, $MELI has to grow earnings at a 21.23% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2025 - 2027 EPS growth over the next few years to be more than the (21.23%) required growth rate:
2025E: $47.04 (24.8% YoY)
2026E: $65.23 (38.7% YoY)
2027E: $85.38 (30.9% YoY)
$MELI has an ok track record of meeting analyst estimates ~2 years out, but let’s assume $MELI ends 2027 with $85.38 in EPS & see its CAGR potential assuming different multiples
38x P/E: $3244💵 … ~19.5% CAGR
36x P/E: $3073💵 … ~17.2% CAGR
34x P/E: $2902💵 … ~14.7% CAGR
32x P/E: $2732💵 … ~12.2% CAGR
30x P/E: $2561💵 … ~9.6% CAGR
As you can see, $MELI appears to have attractive return potential IF we assume >32 earnings (a multiple well-justified by its growth rate & moat)
$MELI boasts an expansive growth trajectory, fueled by powerful network effects that should drive sustained momentum
Key factors contributing to its promising outlook include 🔑
1. Margin expansion
2. Unparalleled access to Latin America's burgeoning economy
3. Network effects that produce self-reinforcing dynamics ensuring long-term competitiveness, among other things
Those buying $MELI today at $1996💵 are buying a great business for a great price, with a decent margin of safety — these growth rates have to be revised down substantially for $MELI to miss the mark, even if the company grows earnings at 22% CAGR over the next 5 years, shareholders will likely end up with a great result
I consider $MELI a steal closer to $1790💵 (~10% below today’s price) where I can reasonably expect ~11% CAGR while assuming a very conservative 26x end multiple, ensuring a large margin of safety
#stocks #investing
___
𝐃𝐈𝐒𝐂𝐋𝐎𝐒𝐔𝐑𝐄‼️: 𝐓𝐡𝐢𝐬 𝐢𝐬 𝐍𝐎𝐓 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐀𝐝𝐯𝐢𝐜𝐞. 𝐁𝐚𝐛𝐲𝐥𝐨𝐧 𝐂𝐚𝐩𝐢𝐭𝐚𝐥® 𝐚𝐧𝐝 𝐢𝐭𝐬 𝐫𝐞𝐩𝐫𝐞𝐬𝐞𝐧𝐭𝐚𝐭𝐢𝐯𝐞𝐬 𝐦𝐚𝐲 𝐡𝐚𝐯𝐞 𝐩𝐨𝐬𝐢𝐭𝐢𝐨𝐧𝐬 𝐢𝐧 𝐭𝐡𝐞 𝐬𝐞𝐜𝐮𝐫𝐢𝐭𝐢𝐞𝐬 𝐝𝐢𝐬𝐜𝐮𝐬𝐬𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭.
𝐓𝐡𝐞 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐜𝐨𝐧𝐭𝐚𝐢𝐧𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭 𝐢𝐬 𝐢𝐧𝐭𝐞𝐧𝐝𝐞𝐝 𝐟𝐨𝐫 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐩𝐮𝐫𝐩𝐨𝐬𝐞𝐬 𝐨𝐧𝐥𝐲 𝐚𝐧𝐝 𝐬𝐡𝐨𝐮𝐥𝐝 𝐧𝐨𝐭 𝐛𝐞 𝐜𝐨𝐧𝐬𝐭𝐫𝐮𝐞𝐝 𝐚𝐬 𝐢𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐚𝐝𝐯𝐢𝐜𝐞 𝐭𝐨 𝐦𝐞𝐞𝐭 𝐭𝐡𝐞 𝐬𝐩𝐞𝐜𝐢𝐟𝐢𝐜 𝐧𝐞𝐞𝐝𝐬 𝐨𝐟 𝐚𝐧𝐲 𝐢𝐧𝐝𝐢𝐯𝐢𝐝𝐮𝐚𝐥 𝐨𝐫 𝐬𝐢𝐭𝐮𝐚𝐭𝐢𝐨𝐧. 𝐏𝐚𝐬𝐭 𝐩𝐞𝐫𝐟𝐨𝐫𝐦𝐚𝐧𝐜𝐞 𝐢𝐬 𝐧𝐨 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞 𝐨𝐟 𝐟𝐮𝐭𝐮𝐫𝐞 𝐫𝐞𝐬𝐮𝐥𝐭𝐬.[...]
Offshore
Dimitry Nakhla | Babylon Capital® RT @DimitryNakhla: A quality valuation analysis on $MELI 🧘🏽♂️ •NTM P/E Ratio: 42.45x •1-Year Mean: 47.73x As you can see, $MELI appears to be trading below fair value Going forward, investors can receive ~12% MORE in…
𝐈𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐜𝐨𝐧𝐭𝐚𝐢𝐧𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭 𝐡𝐚𝐬 𝐛𝐞𝐞𝐧 𝐨𝐛𝐭𝐚𝐢𝐧𝐞𝐝 𝐟𝐫𝐨𝐦 𝐬𝐨𝐮𝐫𝐜𝐞𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞𝐝 𝐭𝐨 𝐛𝐞 𝐫𝐞𝐥𝐢𝐚𝐛𝐥𝐞, 𝐛𝐮𝐭 𝐢𝐬 𝐧𝐨𝐭 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞𝐝 𝐚𝐬 𝐭𝐨 𝐜𝐨𝐦𝐩𝐥𝐞𝐭𝐞𝐧𝐞𝐬𝐬 𝐨𝐫 𝐚𝐜𝐜𝐮𝐫𝐚𝐜𝐲.
tweet
tweet
Offshore
Photo
Finding Compounders
Asked whether he considers himself a superinvestor, Schloss demurs: "Well, I don't like to lose money."
A Forbes article on Walter Schloss https://t.co/abPlbfkPzg
tweet
Asked whether he considers himself a superinvestor, Schloss demurs: "Well, I don't like to lose money."
A Forbes article on Walter Schloss https://t.co/abPlbfkPzg
tweet