Investment Writings

  • Industry analyses
  • Macroeconomic outlooks
  • Other portfolio thoughts

The Lease to Own Industry

The BNPL industry has caught a lot of attention recently with firms like Afterpay and Affirm commanding nose bleed valuations. What hasn’t got as much attention is BPNL’s lesser-known cousin, Lease to Own (LTO). This industry is geared towards sub/non-prime customers who typically have a credit score below 650 or have no credit score at all. This is about 40% of the US population with an industry TAM of around 50B. Historically the industry was dominated by brick and mortar Rent to Own (RTO) players such as RCII and Aarons, who bought furniture/other items wholesale and then leased those items from their stores...

Trends, Cycles, and Beanie Babies

We wrote about why macro is important for stock pickers in our last post. Part of this involves an understanding of the forces that drive demand for the product or service of an underlying firm in our portfolio-- this is a necessary ingredient for us to form conviction. In this discussion, we share with you how we define a trend, other forces that are often confused with trends, and finally how this knowledge translates into portfolio positioning. Webster defines the word “trend” as a “general direction in which something is developing or changing.” Since this definition is far too vague for any practical use in the investing world...

The Online Luxury Marketplace Industry

Although the luxury goods industry has not yet reached that stage in online maturity, that could be a reality sooner than people expect. Chances are none of our readers have ever bought from or even heard of the luxury good platforms Farfetch, MyTheresa, Cettire, and TheRealReal (if you have please reach out). These companies are taking the luxury goods market online. This is a peculiar industry as the luxury goods market is designed for the personal tailor-made experience. Walking into a high-end boutique store, one gets the ten-star experience from personal customer service to incredibly ornate wrapping etc. Over the last ten years...

Stock Picking & Macro

If you invested in Amazon in 2001 with this opinion and remained steadfast in your ownership, we are guessing you probably did okay. Even then, we would argue that for you to have maintained conviction in Amazon, you must have had at least a partial macro-opinion. Maybe not of where interest rates are headed but perhaps of how the internet would change the world and how the penetration rate of e-commerce would evolve in the decades ahead. In this piece, we will define what we mean by macro and explain the two dimensions of our macro view: the “inside view” & portfolio positioning. We will conclude...

Traditional IPO, SPAC, or Direct List?

The amount of companies coming public towards the second half of 2020 has been a bit insane to say the least. According to SEC regulatory filings, Q3 2020 has seen 81 IPOs (ex-SPACs) making it the busiest Q3 by deal count since 2000. The average IPO first-day pop has been 37%. The actions from government organizations to shut down economies have devastated industries such as hotels and leisure but have been a boon to sectors such as Healthcare and Tech. As society pushes for a vaccine, more people than ever are now working from home evidenced by screen time on our favorite devices up almost 60% since...