That’s what makes a market [Members]

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• 

  Mogul

  1 Daz May 25, 2026, 9:48 pm

  This active investing thing is hard, even for the omnipotent:

  https://alphaarchitect.com/wp-content/uploads/2021/08/Even_God_Would_Get_Fired_as_an_Active_Investor.pdf
• 

  Maven

  2 The Investor May 25, 2026, 9:55 pm

  @Daz — Yes, one of the all-time greats that.

  @all — Sorry for the delay with this one. I got floored with some medical-related stuff on Friday that basically lost me 36 hours, and it knocked everything out of sync. (Okay now!)
• 

  Mogul

  3 Delta Hedge May 25, 2026, 11:14 pm

  Hope you’re feeling better @TI. Nothing comes before health. Least of all money! 😉

  Concur with @Daz. There’s a similar one to AlphaArchitect out there on the Web for the scenario of ‘if you had access to the next day’s headline’ (but not the next day’s stock prices), i.e. you’d still lose money because, even if you knew what happens next, you just can’t know how Mr Market reacts to it.

  It’s the Keynesian Beauty Competition (I think it was JMK who noted the phenomenon), where you don’t actually judge the most attractive contestant (i.e. the actual best business here), but try instead to guess how the other judges will themselves guess how their co judges will vote (or some third, fourth or fifth order derivations of this).

  I just think it’s way too complicated (stock picking as a way of life) and unrepeatable from first principles. 55,000 listed companies globally is 220,000 quarterly reports annually. And what combination of which to hold in what amounts? We’re into factorials now (multi thousand digit sized combinational landscapes). When do you decide the thesis is validated or falsified? Why those criteria and not others? The questions never end. Firm answers are elusive. I just never could build the conviction even if I could stomach the drawdowns (which I think I perhaps could but only *if* I had enough conviction) and the complexity (life’s too short, sadly – if I lived 10,000 years and had no full time job then, maybe, I might feel differently, but I’ve got most likely only 1,500 to 2,000 weeks left, and, unfortunately, I am for now still very much encumbered by employment).

  I do dabble in individual names but in it’s totality it sub-sub 5% territory overall which means I don’t lose sleep or even miss a heartbeat if any one pick goes south. It’s a bizarre mix. Overall doing Ok with PLTR leading the multi bangers. Then again, there’s plenty of losers. KR1 down over 80% on purchase price (urgh), and it was massively off its ATH when I dabbled in it (but only to tune of hundreds of pounds in a seven figure overall portfolio now). Jet2 crucified off of the Iran war kerosene squeeze. Some sh** involving US rare earth companies earlier this year which I wish now I’d never touched, and somehow managed to buy just as the began to collapse after going parabolic before I clicked on ‘buy’ (couple of grand incinerated on those 🙁 ).

  I’ve seen MELI come up a lot in the growth stock / Southern Cone quality value community (confluence?) on investing Substack. I’ve signed up to north of 1,000 free Substacks now (95% investment and macroecon), so you get to see every name tipped sooner or later (I’ve switched the email notifications off for my own sanity).

  Don’t hold any MELI though. Probably won’t be doing so in the future, notwithstanding the truly superb article above (for which thank you). But I am overweight both the wider South America market, and specifically Brazil; via trackers, a specialist Investment Trust and with PBR (I also hold Columbia’s EcoPetrol. Whatever else, it’s hard to argue that LatAm is not cheap and Brazil especially both relatively and absolutely cheap. That doesn’t mean they’ll be good returns of course. Just I feel more comfortable buying Brazil on around 10x to 11x Forward and Trailing PEs than the US large caps on low 20x to 29x. Each to their own.

  Incidentally, Rebound Capital (on Substack) have a whole system for buying what they’d call quality growth on 50% to 75% drawdowns from ATHs. META in 2022. AMZN in 2002. That sort of thing.
• 

  Maven

  4 The Investor May 26, 2026, 9:14 am

  @DH — You write:

  Hope you’re feeling better @TI. Nothing comes before health. Least of all money!

  Indeed, this was from the side effects of a vaccine (Shingrix) which serves that bigger health picture. (Preventative against Shingles, also very encouraging evidence it meaningfully reduces dementia risk). They recommend from 50 in the US but you can’t get it until 65 on the NHS, despite a large proportion of Shingles (a horrid disease when you’re unlucky) happening before then, so I paid up. No regrets / conversion to the anti-vax ranks — my side effects are within known bands and I’ve already scheduled the follow-up shot — but I could have done without it timing wise!

  Thanks for the nice words about the article. Not going to argue anyone needs to pick stocks obviously. I do it as much for the intellectual appreciation of business and the love of the game as for chasing higher returns. 🙂
• 

  Mogul

  5 Owl May 26, 2026, 3:04 pm

  Thank you, this is the kind of stuff I subscribe for. More please!
  MELI has been on my radar since Fundsmith’s now-defunct FEET bought it. It has always looked to me like a great company and has always looked to me to be expensive, so have never owned it. I must run my slide rule over it again to see whether I think tomorrow’s jam is going cheap enough here now.
• 

  Maven

  6 The Investor May 27, 2026, 10:44 am

  @Owl — Thanks for the comment! I’ve had a couple off-site too and it’s always reassuring to hear there is an audience out there for these articles. (Especially when one applies the ‘tip of the iceberg’ theory of Internet comment / emails vs actual readers etc).

  I guess people are still wary of admitting their love of stock picking, even in what should be a safe space on Moguls 😉

  MELI is still expensive, IMHO you have to weigh it against the potential as you know, which if it weren’t for these existential AI issues I think would still be obviously vast. I deliberately didn’t get into the competition in this piece bar a couple of asides, but as far as I can tell they are holding their own or better, even versus Amazon. And the latter has other pressing things to do with its free cashflow now!

  In a world where MELI continued to grow its own share and with LatAm GDP as the dominant player indefinitely, there’s a lot of value still to be captured I’d argue. It’s becoming pretty clear that barring regulation (or, again, AI disruption) these mega platforms seem to naturally become extremely embedded in the territories they manage to win as far as I can see.

  (As ever, have to disclaim as the blog owner that this is not investing advice, do your own research etc. 🙂 )