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$133.1M follower assets

Doing deep research of individual companies in the chase of alpha.

Main contributor at Best Anchor Stocks. There's a two week free-trial.

Founder of The Global Investor
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$133.1m follower assets
First Substack post
The first publication of the Best Anchor Stock's new public blog is the transcript of a conversation I had with Chris Mayer some weeks ago.

Chris shared his background, investment philosophy and thoughts on $CPRT

I chose my 5 favorite quotes below!

(1) On his investment philosophy:

(2) On his transformation from a traditional value investor to a quality investor:

(3) Buying quality during market downturns:

(4) On matching your temperament to your investment style:

(5) Investing is about people:

You can read the full text in the link below!
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$133.1m follower assets
My new Substack!
I have decided to launch a Substack for Best Anchor Stocks!

I explain what Best Anchor Stocks is and what you can expect from this blog in the article linked below. Just summarizing here, you can expect the following:

1) Articles on general investing topics
2) Episode transcripts from my public podcast
3) Company-specific articles from time to time

Hope you join me in this journey!

Welcome to substack, looking forward to read more from you :)
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Focus on the business, not too much on multiples
A perfect market timer who bought the market at its lowest PE in 1920 (4.8x) and sold at peak PE (44.2x) in 1999 would've realized a 14.5% 79-year CAGR.

From this 14.5%...

  • 2.8%/year was attributable to multiple expansion
  • 11.7%/year was attributable to biz performance

This is an extreme example where even a 9x multiple expansion "only" accounted for 19% of total returns.

Even if you are timing the market to perfection, it's the business' performance that matters the most over long periods.

Investors have to allocate their time accordingly.

If you are a long term investor, you are better off getting a grasp of the LT opportunity than focusing on what the right multiple is (extremes aside).

Will your LT returns differ much if you buy something for 21x instead of 19x? Seems pretty unlikely.

Valuation should never be disregarded, but it should be given the necessary context. What matters most depending on your investment horizon? Find out and focus on that.

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Amazon's long-term opportunities and the importance of retails
I wrote an article on some of $AMZN's long-term opportunities (AWS, Ads, Prime...) and why retail is important for the company despite its apparently poor unit economics.

Hope you enjoy it.
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Is Amazon Ads the next AWS?
I recently read an expert call with some interesting insights into $AMZN Ads.

The expert call can be found on Alphasense, where there's a library of more than 20k calls to give you insight about a wide variety of publicly traded companies. You can enjoy a 2-week free trial (no credit card required) during which you can download as many calls as you want. Sign up with the link below!

Let's go over some highlights!

Ads help launches in Amazon be successful. This expert said that within 3 months they managed to scale their business to $10 million. It was all thanks to Amazon Ads.

Ad reliance went down once they gained reputation

There's a lot of innovation going on on Amazon Ads

3 years ago, Amazon Ads was 10 years behind Google Ads in terms of functionality

Today, Amazon Ads is 3 years behind Google Ads

In 1-2 years, Amazon Ads will probably catch up with Google Ads

The first component where Amazon is behind Google is marketing capabilities.

According to the expert, it'll take Amazon around a year or two to come out with a close comparable:

Ads in Amazon have gotten increasingly expensive but intent is what drives this cost and why it makes it "cheap"

"If someone's searching for a winter coat on Google, they probably want to buy a winter coat, but on Amazon, if they're searching, they really want to buy a winter coat."

"Best seller" badges can be influenced with Ads, but they are given out based on sales velocity

If your conversion rate and your sales are very high you might end up with a Best Seller badge which will boost your sales further

Digital Ads are somewhat cyclical because advertisers are trying to protect ROAS, which is calculated at sales per click / cost per click.

If sales per click goes down during a recession, you have to lower CPC to stay even in ROAS

The expert also believes there will be a shakeout of smaller sellers at some point because Amazon is getting increasingly competitive as a marketplace

As long as the company keeps launching innovations, Ad spend will most likely go up
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Great content on quality investing alert!
François Rochon, founder of Giverny Capital, has achieved a 30-year 15.7% CAGR.

His annual letters are a must read for any LT quality investor.

I compiled them all in one PDF (+350 pgs). You can download it from the link below!

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Topicus Q3 Earnings
I wrote an article on Topicus' Q3 earnings.

Some investors were disappointed with the low organic growth, especially when compared to Constellation Software's, but one must take into account the economic environment when making comparisons.

Hope you enjoy it.

Great article! Loved the deeper look into the maintenance revenues and the impact of the European struggles, good context. As for expenses, as the add more businesses its natural to expect employee costs to rise. Do you think the acquisitions impacts have a lagging effect? In other words does it take a bit longer for the impacts to come online relative to the quarterly/annual releases. Maybe it's a dumb question??
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Constellation Software's Q3
I wrote an article on Constellation Software's Q3 which I decided to make public.

Some highlights:

  • Altera doing better than expected
  • Expenses growing in part due to higher contingent consideration expense which was higher in the Q than the three prior years combined

Contingent consideration is incurred when acquisitions do better than expected, and they have skyrocketed in Q3

Full article below!
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One of the things I admire about Constellation is the impeccable balance sheet. Do you happen to know how effectively they have historically used debt?
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$AMZN with or without retail?
Might be rare, but I prefer to own $AMZN with retail

It's not high margin (although it's improving with the shift from 1P to 3P), but what about optionality? Retail is the bedrock of several growth opportunities such as:

  • Ads
  • Prime
  • Buy w/ Prime...

Who know what will be next.

I prepared the following graph so you can understand why retail is so important to Amazon, hope it helps!
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$AMZN Prime's undermonetization
The undermonetization of the Prime membership will be an important growth lever for $AMZN

The price/value gap is evident in the US, but more so in international markets.

Let's see some numbers for Spain.

$NFLX costs a minimum of €7.99/month and $SPOT costs €9.99/month

I pay €36/year for my Amazon prime membership and I could get Amazon Music unlimited for an additional €9.99/month, bringing the yearly total to €156 for both subscriptions.

By paying €156 euros I would have access to:

  • Fast delivery
  • Amazon Music Unlimited
  • Amazon Prime Video

On the other hand, it would cost me €215/year (39% more) to enjoy Netflix (the low tier) and Spotify and I would forfeit fast shipping.

Yes, Spotify might be better than Amazon Music today, but the gap is closing

Yes, Netflix might be better than Prime Video today, but the gap is also closing

Ps: I'm not a typical Netflix user because I don't watch a lot of shows
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Amazon Music Unlimited with Prime is pretty useless to me as you‘re only able to play songs in shuffle mode. And I rarely use prime video. That said, i would pay for prime membership only with the delivery benefits 😅
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