Finding Moats Investment Research

Collector of Unique Businesses | In-Depth Company Research & Portfolio Updates at

[Finding Moats Investment Research @Finding_Moats]

"Ferrari CEO Says First EV Is Racking Up Orders Despite Criticism" $RACE https://t.co/dQG6RURyIR

[Finding Moats Investment Research @Finding_Moats]

Most takes on the new $RACE Ferrari Luce feel wrong to me — and I say this as someone who also finds it hard to look at. But I wonder how much of the criticism comes from the fact that 99.9% of us will never afford one, which probably makes our opinion on it the least useful thing in the room. Ferrari's real customer is a collector. Someone for whom €550k is not a stretch, who already owns several Ferraris, and who regularly pays multiples of that for limited editions they haven't even seen in full. I also find it interesting that you almost never see fintwit tear apart a new Hermès collection or a L'Oréal perfume launch. But a car drops and suddenly everyone's a critic. Cars seem to trigger something — particularly among men — that other products don't. My read is that Ferrari isn't planning to flood the market with these. Scarcity is the whole logic. Investing well means seeing through the customer's eyes, not our own. I'm still figuring that out. What I find particularly striking is that a lot of the loudest criticism seems to come from the $TSLA investing community — which is a strange place for it to originate. Because if there's one group that should understand that a product doesn't need to appeal to you personally to sell well, it's them. The Cybertruck is probably the ugliest pickup ever built, IMO. Any European or Asian observer would have written it off immediately. And yet it sold. You'd think that experience would make people a little more humble about predicting what other people's customers will or won't buy.

[Finding Moats Investment Research @Finding_Moats]

Apparently Montezemolo weighed in on the Luce today. It reminded me of when Jane Birkin publicly asked $RMS.PA Hermès to remove her name from the Birkin bag over the crocodile farm controversy. It was a big deal at the time. Hermès is still Hermès and most people don't remember it happened. People have short memories, which honestly makes this whole game a lot more interesting to play. Businesses evolve, make mistakes, adapt and come out stronger. Not saying anything new here, I know.

[Finding Moats Investment Research @Finding_Moats]

Most takes on the new $RACE Ferrari Luce feel wrong to me — and I say this as someone who also finds it hard to look at. But I wonder how much of the criticism comes from the fact that 99.9% of us will never afford one, which probably makes our opinion on it the least useful thing in the room. Ferrari's real customer is a collector. Someone for whom €550k is not a stretch, who already owns several Ferraris, and who regularly pays multiples of that for limited editions they haven't even seen in full. I also find it interesting that you almost never see fintwit tear apart a new Hermès collection or a L'Oréal perfume launch. But a car drops and suddenly everyone's a critic. Cars seem to trigger something — particularly among men — that other products don't. My read is that Ferrari isn't planning to flood the market with these. Scarcity is the whole logic. Investing well means seeing through the customer's eyes, not our own. I'm still figuring that out. What I find particularly striking is that a lot of the loudest criticism seems to come from the $TSLA investing community — which is a strange place for it to originate. Because if there's one group that should understand that a product doesn't need to appeal to you personally to sell well, it's them. The Cybertruck is probably the ugliest pickup ever built, IMO. Any European or Asian observer would have written it off immediately. And yet it sold. You'd think that experience would make people a little more humble about predicting what other people's customers will or won't buy.

[Finding Moats Investment Research @Finding_Moats]

One thing I'm not seeing much of in the Ferrari Luce conversation is the more boring but maybe more relevant question. How many are they actually going to make? Do we really think they walked into this blind on demand? And if it sells poorly, is that something a brand with a century behind it can't quietly absorb? I'd guess it can. Ferrari has had underwhelming launches before, some on the primary market, some on the secondary, and the brand is still here. Legacy buys you some room for error. Not infinite room, and it runs out faster than people think if you start consistently disappointing the people who actually write the checks. But I haven't seen evidence that's where this is heading. Could be wrong.

[Finding Moats Investment Research @Finding_Moats]

Wrote up some thoughts on a few changes I'm making to the portfolio ($):

[Finding Moats Investment Research @Finding_Moats]

@TheOwnersEquity And what about scale?

[Finding Moats Investment Research @Finding_Moats]

What's the competitive advantage investors most consistently overestimate?

[Finding Moats Investment Research @Finding_Moats]

Not exactly my point though. What I was trying to say is that every time a stock drops, people suddenly remember valuation mattered — as if it was obvious all along. You understand the business first, then you worry about the numbers. Using a ratio on accounting earnings as the main filter for cheap vs expensive is, at least the way I see it, where things get a bit too simple. Same goes for DCFs on businesses with high barriers to entry and assets that are nearly impossible to replicate — the spreadsheet will never fully capture what makes those businesses special.

[Finding Moats Investment Research @Finding_Moats]

The problem — at least the way I see it — is reducing investing, with all its complexity, to a mathematical formula, however sophisticated it may be. How do you put in a DCF that $AMZN selling books would end up building AWS? That $DHR would go from an industrial asset play to a pure diagnostics and life science business? That $NFLX would disrupt Blockbuster and build a dominant global streaming service? That $TSLA would go from selling cars to selling autonomous humanoid robots? That $GOOG would acquire YouTube and turn it into one of the most profitable assets on the planet? The hard part is everything the formula can't see, IMO.

[Gerhard Visagie 🇿🇦🇷🇼 @Gerhard_Paladin]

Best way to avoid overvaluation is to do a DCF valuation and IRR calculation. Even with simple assumptions .

[Finding Moats Investment Research @Finding_Moats]

Not going to pretend valuation doesn't matter — it does, especially if you run a fund or manage other people's money and your performance gets measured quarterly. But there's a pattern I keep seeing: every time a stock drops meaningfully, a wave of people show up saying 'valuation always mattered.' As if they knew. As if it was obvious.

Hermès $RMS.PA is the first example that comes to mind, but there are plenty of others. Back in 2008 it traded around 40x earnings — similar multiple to where it was not long ago, the one many are now pointing at as 'clearly excessive.' The stock was at €80. It's at €1,600 today.

Not making a case that valuation is irrelevant. Making a case against lazy retrospective analysis dressed up as insight. There's a quote I can't attribute precisely but goes something like: 'I don't hire an analyst to explain why a business at 12x is cheap. I hire them to explain why one at 40x still is'. I've always thought investing is a bit more complex than dividing a stock price by its earnings.

[Finding Moats Investment Research @Finding_Moats]

@dipinvest Thank you so much 🤝

[Finding Moats Investment Research @Finding_Moats]

Researching a great €8B European name with no mentions on VIC. Genuinely don't know if that's a good sign or not. Though it probably says more about VIC these days than about the company, which is a pity.

[Finding Moats Investment Research @Finding_Moats]

"This time is different."

[Finding Moats Investment Research @Finding_Moats]

I didn’t even know there were people blindly putting money into stocks based on what Claude tells them. Are we already back to the “million-dollar monkey JPEGs” era, or not quite yet?

[Finding Moats Investment Research @Finding_Moats]

Possibly the strongest example of operating leverage I've seen is $NFLX. Since 2016, revenues are up ~4x. EBIT is up ~35x. Fixed costs spread over a massive subscriber base

[Finding Moats Investment Research @Finding_Moats]

There's plenty to criticize about Tesla, and I'm on board with some of it (especially anything CEO-related). But two things are hard to argue with: almost no company has this level of vertical integration, and almost no company has a retail investor base that asks better questions than many of the professional analysts covering it. $TSLA

[Sawyer Merritt @SawyerMerritt]

Here are the top 7 voted for questions by investors so far for @Tesla's Q1 earnings call next week:

1) When will we have the Optimus v3 reveal? When will Optimus production start since we ended the Model X and S production earlier than midyear? What's the expected Optimus production rate exiting this year? What are the initial targeted skills?

2) What milestones are you targeting for unsupervised FSD and Robotaxi expansion beyond Austin this year, and how will that drive recurring revenue?

3) How will hardware 3 cars reach unsupervised FSD?

4) When you do expect FSD Unsupervised to reach customer cars?

5) When will robotaxi expand past its current limited rollout?

6) Is v14.3 still the last piece of the puzzle to enable large scale unsupervised FSD and Robotaxi or do we now have to wait until v15?

7) What is Tesla doing to scale the energy generation business with solar? Residential roof deployments have stalled. Will Tesla move to regional solar and battery farms perhaps coupled to superchargers? Deploy solar through utilities?

[Finding Moats Investment Research @Finding_Moats]

@mmachcew @Substack A monthly subscription unlocks 50+ analyses, investment ideas and a full portfolio. It wouldn't be fair to my work or to the subscribers who have been supporting it for years.

[Finding Moats Investment Research @Finding_Moats]

If all goes well, tomorrow I will publish issue #51 — my deep-dive on Aena. $AENA.MC

It has been a genuinely interesting business to research, and I hope the write-up reflects that.

For those who want to follow along, the subscription link is in my bio or in the next tweet. Thank you for the support — it means a lot.

[Finding Moats Investment Research @Finding_Moats]

@mmachcew Honestly, I've never thought about it. @Substack is there a way to set up pay-per-article access, without requiring a full subscription?

[Finding Moats Investment Research @Finding_Moats]

@MDBBolsa Conoces algunos 😉

[Finding Moats Investment Research @Finding_Moats]

Took me years to fully appreciate these businesses — the ones that control the supply of a good or service that is critical or essential to human life, and where demand only goes one way. Once you've done that work and own them with a long horizon, the rest is, honestly, just noise. The last 12 months have been the loudest I can remember. My take: investing is as simple or as complex as you allow it to be.

[Finding Moats Investment Research @Finding_Moats]

Think about a family business owner pouring everything into building something that lasts generations. That person wouldn't even understand the question if you asked whether next quarter's EPS beats a handful of analysts by 5%. There are some truly strange things that only exist in the world of public markets.