Benjamin Tan's avatar

$6.2M follower assets

Investor + Writer | Sharing ideas on consumer + tech | Ex-banker + buyside | 14yrs at CS, UBS, Oaktree | Not financial advice | Subscribe to my weekly Substack👇:
Benjamin Tan's avatar
$6.2m follower assets
New Website: Enneagram Investing + Free Personality Quiz
Dear all, I just launched a new website called Enneagram Investing to dive deeper into the intersection between personality types and investing behaviors. It comes with a free Enneagram quiz that I built from scratch. Accuracy is proven to be very high, having rigorously backtested the results with participants of known Enneagram types. And it takes less than 2 minutes, faster than most of the quizzes out there.

I used Wix and Involve.me for my website and quiz, respectively, and the process took less than a week. Years ago, I helped a friend build a photography website on GoDaddy and that experience required plenty of handholding. Perhaps it was also because I had to load plenty of pictures and it was a pain having to align everything for symmetry! In contrast, building www.enneagraminvesting.com on Wix was a more straightforward affair. I adopted their templates liberally to make it easier on myself.

Visit my website “Enneagram Investing” to check it out and try the free Enneagram quiz

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Taking the Quiz now! The animations of the boxes fading away when you select one is very calming 😃
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Here's the Personality Type I believe is Many of Us on Commonstock!
I am a Type Five (also known as an investigator) because I rely more on my head than emotions or instincts. Equally, I have a tendency to get rooted in my own mind, which can result in being detached from reality. This has led to many costly investment mistakes, including my ride with Peloton $PTON which I detailed in an earlier post as one of my worst investments.

Knowledge is power to Type Fives: there is no end to the learning journey, though subject matters can range from constructive pursuits to eccentric quirks. These investigators find everything they need in their own minds; hence they are seldom bored. Taken to the extreme, however, knowledge accumulation can become a hinderance to true learning. A simple illustration is a Type Five who tries to learn dancing by observing others boogie or watching YouTube videos at home. Everything but hitting the dance floor themselves.

Click on the article below to find out if you are a Type Five. Subscribe to my FREE weekly blog, Consume Your Own Tech Investing. This is Part V of a series of post that I will be writing on Enneagram x Stock Picking. Below are the links to Parts I - IV:

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When does a Company become "Too Big to Fail", therefore Safer to Invest?
Escape Velocity”: lowest velocity which a body must have in order to escape the gravitational attraction of a particular planet or other object.

Does the concept of “Escape Velocity” exist for companies?

The book “Crossing the Chasm” by Geoffrey A. Moore talks about high growth companies that have crossed into mainstream to become rock-solid enterprises. Costco ($COST) comes to mind as a modern day retail giant that continues to grow its largely bricks-and-mortar business in the face of competition from online shopping. I am a fan of Costco and count myself as one of the 123mn cardholders. Most of us renew our membership religiously every year, drawn to its low-priced (but curated) merchandise and motivated by the thrills of discovering new, unexpected bargains while shopping.

The stock, however, is no bargain. Despite slower revenue growth in the single digits and thin margins (albeit intentionally), Costco trades almost 20x forward EV/2023e EBITDA with a dividend yield of less than 1%. There are valid justifications for its valuation, and they are predicated on Costco’s almost intransigent place in the world of consumer retail. The company, currently the 6th largest global retailer in the world, grosses more than $200bn per year. It has a footprint of over 800 warehouses and counts 68mn households as members. Despite competition from online shopping, Costco has held its own and continues to grow its largely bricks-and-mortar business. In other words, Costco has more than crossed the chasm, and accordingly, its stock commands a high price. There is safety in numbers and a price to pay for that safety.

On the other end of the retail spectrum, emerging names are risky investments that may or may not work out. Take Allbirds ($BIRD) as an example: the company was recently in the news for reporting underwhelming financial results and guiding for first quarter 2023 topline to fall by 20% to 28%. The decline in sales is unexpected for a company so early on its expansion track, and a stark contrast to its high-flying days when revenue grew by 30% per annum (on average) between 2018 and 2021. For fiscal year 2022, Allbirds earned almost $300mn in revenue, but it is already looking like a late-stage Jenga. Survival odds are deemed to be low, as reflected in its current market valuation of less than $200mn.

Is there a revenue threshold that connotes “Escape Velocity”? That is, a company being large enough to free itself of existential crisis and cruise into the stratosphere? Click on the link below to read on, including a discussion of emerging SaaS player Snowflake ($SNOW) and technology stalwarts like Microsoft ($MSFT) and Salesforce ($CRM).

Do subscribe to my weekly blog, Consume Your Own Tech Investing too - I would appreciate your support.

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Fun read !
We're finally getting a Costco in our neck of the woods in the Gold Coast of Australia.
Opening date is set for June this year. We've never been to a Costco.
I'm sure we'll join the club and I'm sure it'll be just a sticky as our Amazon Prime membership.
There's plenty of expansion opportunities for Costco in Australia, it's definitely underserved here. For example, there's 6 million people in Sydney and only 4 Costcos. With the new Gold Coast warehouse, there'll be only be 3 in Queensland for a population of 5 million.
On the Allbirds front, I wonder if they'll be a target for acquisition? You could argue their footwear category doesn't really have much of a moat, but the goodwill on their branding definitely has value and stickability.
Maybe Lululemon? They mostly have an athletic shoe line. Allbirds are looking to get back to their roots with their casual, comfort line: "We haven’t had the selection, color or style enhancement on our core products" - Joey Zwillinger
A takeover/merger could be complimentary, and ensure survival at the same time.

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Rivian: Buying a Tried-and-Tested Tesla EV versus Taking a Bet on a Rivian?
Curiously, Tesla ($TSLA) does not really have a traditional SUV model. The closest thing might be a Model X, but its winged doors look a bit tricky; Model Y is a tad small.

Rivian ($RIVN), on the other hand, produces the R1S, a classic SUV. I wonder, however, if potential customers should be concerned with the challenges that the company is facing: high cash burn rate; increasingly expensive capital raise; delayed scaling. Will Rivian be able to provide good post-purchase servicing, which require further manpower and capital investment? Will the initial batch of R1S vehicles be well-made, or will they have a bunch of technical issues they can fix? Will Rivian even be around?

Personally, I would rather buy a tried-and-tested Tesla any day, especially when they are consistently refreshing all the S3XY models to make them better. My partner seems intent on buying the R1S, even placing a (refundable) deposit for it. Perhaps I am also too biased (Tesla fan) to want to take a chance on the R1S?

Rivian EVs - yay or nay?
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I love both Tesla and Rivian vehicles, but as a shareholder of Rivian I have to say go with the R1S!

Hope whichever you decide to go with treats you well though.
Can Emotions inform Investors when Picking Stocks?
We are all emotional creatures, and as much as we like to think we are led by our rationale, feelings always come into play when identifying investment opportunities. We may be drawn to a buying a house because of the way we feel when we step into the living room, or we may find ourselves turned off by Elon Musk when evaluating $TSLA.
Of the 9 Enneagram personality types, Type Fours are known to be the most inward-looking and emotionally charged. There is a lot of Four-ness in me, as much as I like to pride myself on being logical. On one hand, being attuned to emotions can be an asset in creativity and spotting early trends in consumer markets. On the flip side, a combination of “coulda, shoulda, woulda” and “if only” type of ruminations can suck Type Fours into a vortex of inaction.

Find out why I am using Taylor Swift to illustrate Type Fours, and her relevance to personal investing by reading the article. Subscribe to my FREE weekly blog, Consume Your Own Tech Investing. This is Part IV of a series of post that I will be writing on Enneagram x Stock Picking. Below are the links to Parts I - III:

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Found the takeaways from part 3 to be particularly relevant after learning of my personality type from truity
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Salesforce ($CRM): Benioff on a "No M&A" Diet?
Marc Benioff, founder of Salesforce ($CRM) is a big man - literally, at well over six feet tall - with a big appetite for everything. Dreamforce, an annual event held in San Francisco, is one of the largest technology conferences in the world, perhaps because he does not believe in doing anything on a small scale. Since inception in 1999, Salesforce has consummated some of the boldest acquisitions (like Tableau and Mulesoft) in software history. At one point, it even deliberated buying Twitter ($TWTR). The biggest purchase ever done by Salesforce was Slack Technologies ($WORK) in early 2021, a $27.7 billion dollar transaction funded by a mix of cash and $CRM stock.

So, on last evening's Q4 2023 earnings call, when the company announced the disbanding of its M&A committee, Wall Street was surprised. It was strongly suggested by management that Salesforce had been nudged by investors to refocus on profitability, hence the new "No M&A" diet. Below is a relevant quote from Q4 2023 transcript:

"On M&A, we are confident in our current portfolio and are focused on continued integration of current assets. Reflective of this, you have already heard from Marc that the
Board has decided to disband our M&A committee"

Do you think this "No M&A" diet will last for Marc Benioff?

I write on a weekly blog called Consume Your Own Tech Investing. Check it out and subscribe - it is free.

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In my opinion it's a prudent refocusing.

Have you read the book Trailblazer? Would be great to have your thoughts.
Block ($SQ) Bought Afterpay for $29bn: Will it Pay More Later?
Last week, Block ($SQ) reported Q4 2022 earnings that were largely well-received; both Cash App and Square surpassed Wall Street expectations on growth and gross margins. But the biggest highlight was Jack Dorsey's introduction of a new investment framework that took stock-based compensation fully into account when measuring profitability. In doing so, Dorsey may be signaling a new era for Block. After all, with 2022 gross profits of almost $6bn (more than double that of competitor $SHOP) it may be overdue for GAAP profitability. Current markets have switched from “growth at all costs” to “show me the money” since interest rates started skyrocketing.

However, as transparent as Dorsey was with cost discipline and stock-based compensation, he was quite silent on Afterpay, which was acquired by Block in January 2022 for $29bn. It is a popular Buy-Now-Pay-Later (BNPL) service that represents the largest pivot that Block has ever made in its corporate history. It was also an expensive acquisition made at the height of the technology bull market and BNPL fever, with $12bn of resultant goodwill sitting on Block’s balance sheet.

Going into Q4 2022 earnings, I was expecting Block to take a write-down on the goodwill, given higher interest rates, weaker consumer sentiment, and drastic drop in peer valuations, notably of Klarna and Affirm ($AFRM). It did not happen, but it remains a risk factor.

Click on the link below to get the highlights of Block's Q4 2022 earnings and a discussion of what Afterpay may mean under its new investment framework. Do subscribe to my weekly blog, Consume Your Own Tech Investing too - I would appreciate your support =)

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Didn’t they actually buy Afterpay for $14B? They announced $29B but it ultimately ended up being $14B when all was said and done.
Fiverr: 600 categories to choose from, and I have been an Active Buyer on their Marketplace
I have been invested in Fiverr ($FVRR) since pre-pandemic, but I only started using their services recently, and increasingly so. The first gig I bought on Fiverr was for a fashion sketch. Not quite what people would expect of a content creator on Commonstock, but that was what I did !

A friend of mine wanted to translate her idea of doing vegan shoes (yeah, welcome to the world of next-gen fashion consumption) so I offered to help sketch out her ideas. I did what I could with pencils, and then sent them over to a Fiverr artist to be reproduced professionally. The pictures shown below are the before (my rudimentary sketch) and after (one of the 3 final designs produced).

The artist was based in Pakistan, and what I paid for the 3 sketches (<$100) was much less than what we would have paid for someone in the US to do it. More importantly, it was fast, convenient, and moderated by Fiverr without needing to share personal information. All I did was take pictures of my sketches, sent them to the artist (chosen from reviews and price points) and all communication was done via the Fiverr platform. When the job was delivered, I made final payment plus tips. Fiverr took cuts from all of them, even tips which had to be grossed up.

The results were good enough for my friend's purposes. It was no Christian Louboutin but it was what she needed. My sketches were free of charge, in case you were wondering, and I paid Fiverr as a gift to her.

Fiverr's platform is broad, and the range of services (at varying price points) that one can find there is pretty wild. Their take rate has been consistently at 30%, mainly due to a combination of additional services utilized by Sellers (including Promoted Gigs) and stature as the go-to platform for small gigs. Fiverr continues to grow, albeit at a slower pace in 2022 as it tapers off pandemic driven demand.

Q4 2022 earnings just came out, and FY 2023 revenue is guided to grow by high single digits. With majority of its Active Buyers being SMEs, recovery is still not apparent and Fiverr is focusing more on cost discipline, which will yield much higher margins going forward. Since SMEs are not inclined to spend in this environment, marketing spend is pulled back. No more Superbowl adds - for now at least.

Below are some highlights from the Q4 2022 report:

  • Q4 revenue grew by 4%, partly due to tough comps; Active Buyers were sequentially up, but barely. Still losing pandemic era buyers and gross adds have been weaker due to macro conditions
  • Q1 2023 revenue projected to be flat, but growth rate is expected to reach double digits towards Q4 2023 as comps get easier. This does not assume macro recovery but normalization of buyer behaviors
  • Adjusted EBITDA margin for FY 2023 guided at 15%, which implies Q4 2023 levels approaching 20%, since Q1 adjusted EBITDA margins are estimated at 12%
  • Repeat buyers (myself included) contributed 63% of total revenue, up from 59% from a year ago
  • Buyers that spend >$10,000 annually (myself excluded) grew 29%% year-over-year, albeit slower than the 50% in Q3. They are still very small compared to other Active Buyers
  • Pace of spend per buyer growth moderated in the second half of 2022 – flat sequentially at $262 as the SMB spending crunch continued
  • >$500 per annum Active Buyer cohort contribute to 63% of revenue; the rest are tiny
  • >600 categories as of end Q4, up from 550+ from a year ago

Marketplace potential for gigs is pretty massive; Fiverr has the brand name to keep the flywheel moving with better economics as it continues to scale across more categories and countries. Current macro conditions may not be conducive to SME spend for now, but with a leaner organization from recent cost cuts, Fiverr may be positioned for a stronger rebound when SMEs pick up spending again.

I write on a weekly blog called Consume Your Own Tech Investing. Check it out and subscribe - it is free.

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I really enjoy reading personal experiences on companies' products. Thank you very much for sharing.
Type Three Investors: Emulating the Best Fund Managers or Doing the Minimum?
A Type Three personality is goal-oriented, competitive, and always in vogue. Known also as “Performers”, Threes want to be seen as successful and accomplished to garner admiration from others. Hence, they can be excellent investors, motivated to win. They are competitive (striving to beat the benchmarks), efficient (staying on top of disclosures and macro developments) and look the part (dressed to kill). Picture the likes of Ray Dalio, Seth Klarman, Sir John Templeton, and Catherine Wood – the most inspired Type Three investors will mold themselves to fit in with the greats to one up on Wall Street, plus everyone else while at it.

On the other hand, some Type Threes may choose to do the minimum or nothing at all when it comes to personal investing, for fear of potential failures. Those who do identify with retirement planning may veer more towards indices and reputable mutual funds to avoid market underperformance.

A potential pitfall to desiring admiration is jumping onto investment bandwagons just for the sake of being seen as part of the zeitgeist. If investing in seemingly cutting-edge electric vehicle makers was the trend, Threes might dive into the fray without thoughtful consideration. If holding Bitcoin will make them feel like they are part of the cool kids’ club, then partaking in cryptocurrency becomes likely.

Read more about Type Three via the article below and subscribe to my FREE weekly blog, Consume Your Own Tech Investing. This is Part Three of a series of post that I will be writing on Enneagram x Stock Picking. Below are the links to Part One (Type One Perfectionist) and Part Two (Type Two Giver)

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Really interesting to learn about the potential traps for type three investor . I am going to find out my own type using Truity now. What was your result?
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AMC Stock Phenomenon: What it Reveals about the "Superman" in Certain Types of Investors
Many movies glorify the most epic heroes as fearless warriors who are always prepared to die in service. Superman in Batman v Superman risks his own vulnerabilities by wielding a kryptonite spear to attack Zod, only to perish in battle to save the world. More memorably, Jack Dawson in Titanic freezes to death so that Rose DeWitt Bukater may live. Love is measured by loss, which further romanticizes ideations of needing to save others.

When Covid-19 hit, many retail businesses had to raise plenty of cash to tide through difficult times. Rising above all conventional methods of raising capital was AMC Entertainment Holdings ($AMC): it engineered an ingenious, large-scale meme stock phenomenon to rally individual investors. What AMC CEO Adam Aron did to position the business as a damsel in distress - unfairly attacked by short-sellers; abandoned by the likes of Disney ($DIS) and AT&T ($T) - somehow resonated, despite overarching fears of bankruptcy at the height of Covid. A large group of retail investors banded together to keep buying the stock, and the resultant price buoyancy allowed the company to raise significant equity capital. AMC was saved by everyday investors (fondly referred to as apes) who have since replaced institutional funds to become majority shareholders.

While I am not drawn to AMC as an investment, I am a big fan of going to movie theaters. Must be a generational thing. I would not, however, have invested in AMC just to help the business stay alive. Perhaps it is because I do not identify as an Enneagram Type Two, which I suspect to be the dominant personality of many AMC apes. Superman has a compulsion to save the world; by the same token, Type Two investors (and AMC investors) may be operating with the same script. Proposals like rescue financing – especially if they involve the kind of corporations that Type Twos feel sentimental towards – likely resonate much deeper with their emotions than for other investor types.

Read more about Type Two via the article below and subscribe to my FREE weekly blog, Consume Your Own Tech Investing. I explored Type One on January 31st already; the remaining seven will be featured in upcoming articles on my blog.

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