What's your take on the competitive landscape in LATAM e-commerce and the implications for MELI given that a lot of Asian players have been (Shopee/SEA) or are currently entering (Temu, Shein, Meituan) the market? Especially SEA Ltd. seems to have a similar value proposition, offering also a whole platform (payments, very competitive logistics, e-commerce). Moreover the possibility, that they re-enter LATAM markets other than Brazil is quite high.
I have not followed sea closely except their collapse in 2022 - so please inform me. What i could say is that it takes time to build a e commerce platform which includes logistics warehouse and so on - $meli has made the logistics pivot 12 years ago. Margin was bursting initially it is painful- now that meli has solve the logistics nightmare in brazil and Mexico Gross volume is accelarating at 34% last quarter
They retained cross-border operations in Chile, Colombia and Mexico. Some see this as indication that they plan to re-enter these lucrative markets in the years to come. We will see. I think MELI is still an exceptional business, but I am just wondering if the market is pricing them as if they "won" in LATAM markets. (Disclosure: Not long $SE)
Thank you for the valuable insights. I really admire your work. I am curious about one thing, as I try to learn from your thought process. From earlier notes this year, I perceived that you are quite bullish on FISERV, knowing that is a legacy processor. What exactly turned you so bearish in a very short time frame, as you recently wrote you wouldn't touch this at any price?
I dont have anything much to add from my previous comment, except that $FI was using its processing volume (TPV) growth to finance its buy back which I liked. Growing TPV creates a float - almost like insurance - where the processor gets to hold the transaction fund for 48 hours or so... This float was why FI was generating higher free cash flow than operating income. Since Q2 I realize - this summer - that legacy volume of TPV (excl. Clover) had been in decline for a while and clover was slowing sharply. As such there is a risk that TPV goes in reverse... IF TPV goes in reverse that the float actually reduces.. thus operating income must be used to finance the drop in float due to TPV reduction. Adyen has a stockpile of 10B euro because it never used that float. With Q3 there is a higher risk that TPV starts to decline. Anyway for me was a good lesson to dig further before moving into a stock even if FCFyield is good and to dig into all moving parts. I sold at a small loss in the summer.
Thank you, for your patient answer. This is great, absolutely makes sense to me. Haven’t thought of it like this, so far. Once again congrats to your work!
Dodging that FI fallout before the 47% crater was definitely smart timing. Sometimes cutting losses quickly on a position that doesn't feel right is the best move even if the rationale isn't fully clear at the time. The whole fintech payment processor space seems to be going through a majr reevaluation right now with increased competition and margin pressure. Better to be on the sidelines than catching that falling knife.
I am keeping my $ADYEN that I bought during the 50% drawdown in 2023, as this one might be different. Fintech (stripe, adyen, toast) seems to be winning over legacy but there could be something more profound than that. The USA middle class is really challenged. Discretionary spending like in restaurant is down (traffic wise). This will be though. $TOST is tomorrow - Nov4 - so we might get a better feel of the restaurant business as a whole.
also when something like fiserv fall 50% in one shot... patience is warranted. Typically need to wait 2 weeks minimum before a rotation from garp or fast growth to value fund occur. Often it takes a few months. Look at Netflix chart. It took a full 2 month from the break from 415 to 215$ to end up around 175$. I bought most of my shares mistakenly at 215-210$.. But if I had waited 2 more month it was 175$.. I bought some at 180$ but I had build already a full positions. The same happen to me for Adyen. It took about 2month to stabilize.
Selling a stock after so long is something I aspire to do one day.
I really love your call here, you would never buy it at p/e 100, so you should sell it, even after holding for so long.
I personally would really love a whole write up on this:
"I went all in in Net Net Kikukawa thinking I could take a few % of the stocks and start convincing the management to do massive buyback. I decided to exit as this is not my cup of tea."
What about it is not for you, how does one even go about it?
https://www.wintergems.com/p/a-net-cash-kikukawa-enterprise-2025 I wrote about this company - I took a large position on this one... I thought since its market cap is smaller than the cash level I could go activist by buying a few %.. Then sending a letter to management which does not have control of the company to initiate a large buyback. I may still proceed on that. For now I am not sure I have the skill nor the energy to do that fight. This is a foreign country.
What's your take on the competitive landscape in LATAM e-commerce and the implications for MELI given that a lot of Asian players have been (Shopee/SEA) or are currently entering (Temu, Shein, Meituan) the market? Especially SEA Ltd. seems to have a similar value proposition, offering also a whole platform (payments, very competitive logistics, e-commerce). Moreover the possibility, that they re-enter LATAM markets other than Brazil is quite high.
I have not followed sea closely except their collapse in 2022 - so please inform me. What i could say is that it takes time to build a e commerce platform which includes logistics warehouse and so on - $meli has made the logistics pivot 12 years ago. Margin was bursting initially it is painful- now that meli has solve the logistics nightmare in brazil and Mexico Gross volume is accelarating at 34% last quarter
On logistics I found that:
https://valorinternational.globo.com/business/news/2025/11/12/shopee-pushing-for-shorter-delivery-times-in-brazil.ghtml
https://www.atlanteti.com/en-us/insights/shopees-logistics-expansion-in-brazil
$SE had retreated from SA in 2022 except Brazil. It seems they are there to stay in Brazil. Formidable competitor it seems
They retained cross-border operations in Chile, Colombia and Mexico. Some see this as indication that they plan to re-enter these lucrative markets in the years to come. We will see. I think MELI is still an exceptional business, but I am just wondering if the market is pricing them as if they "won" in LATAM markets. (Disclosure: Not long $SE)
Thank you for the valuable insights. I really admire your work. I am curious about one thing, as I try to learn from your thought process. From earlier notes this year, I perceived that you are quite bullish on FISERV, knowing that is a legacy processor. What exactly turned you so bearish in a very short time frame, as you recently wrote you wouldn't touch this at any price?
I dont have anything much to add from my previous comment, except that $FI was using its processing volume (TPV) growth to finance its buy back which I liked. Growing TPV creates a float - almost like insurance - where the processor gets to hold the transaction fund for 48 hours or so... This float was why FI was generating higher free cash flow than operating income. Since Q2 I realize - this summer - that legacy volume of TPV (excl. Clover) had been in decline for a while and clover was slowing sharply. As such there is a risk that TPV goes in reverse... IF TPV goes in reverse that the float actually reduces.. thus operating income must be used to finance the drop in float due to TPV reduction. Adyen has a stockpile of 10B euro because it never used that float. With Q3 there is a higher risk that TPV starts to decline. Anyway for me was a good lesson to dig further before moving into a stock even if FCFyield is good and to dig into all moving parts. I sold at a small loss in the summer.
Thank you, for your patient answer. This is great, absolutely makes sense to me. Haven’t thought of it like this, so far. Once again congrats to your work!
Bold moves to sell good winners like this
Always a great read. Been a pretty good year for bombardier so far.
Bombardier had so many scars from the past - misconceptions can be rewarding. Is it your largest positions ?
Yes, big position, my cost was like 55 but I should have bought more.
Dodging that FI fallout before the 47% crater was definitely smart timing. Sometimes cutting losses quickly on a position that doesn't feel right is the best move even if the rationale isn't fully clear at the time. The whole fintech payment processor space seems to be going through a majr reevaluation right now with increased competition and margin pressure. Better to be on the sidelines than catching that falling knife.
I am keeping my $ADYEN that I bought during the 50% drawdown in 2023, as this one might be different. Fintech (stripe, adyen, toast) seems to be winning over legacy but there could be something more profound than that. The USA middle class is really challenged. Discretionary spending like in restaurant is down (traffic wise). This will be though. $TOST is tomorrow - Nov4 - so we might get a better feel of the restaurant business as a whole.
also when something like fiserv fall 50% in one shot... patience is warranted. Typically need to wait 2 weeks minimum before a rotation from garp or fast growth to value fund occur. Often it takes a few months. Look at Netflix chart. It took a full 2 month from the break from 415 to 215$ to end up around 175$. I bought most of my shares mistakenly at 215-210$.. But if I had waited 2 more month it was 175$.. I bought some at 180$ but I had build already a full positions. The same happen to me for Adyen. It took about 2month to stabilize.
Wow, great write up.
Selling a stock after so long is something I aspire to do one day.
I really love your call here, you would never buy it at p/e 100, so you should sell it, even after holding for so long.
I personally would really love a whole write up on this:
"I went all in in Net Net Kikukawa thinking I could take a few % of the stocks and start convincing the management to do massive buyback. I decided to exit as this is not my cup of tea."
What about it is not for you, how does one even go about it?
Do you know people that have experience in that.
Thanks.
And many thanks for the kind words
https://www.wintergems.com/p/a-net-cash-kikukawa-enterprise-2025 I wrote about this company - I took a large position on this one... I thought since its market cap is smaller than the cash level I could go activist by buying a few %.. Then sending a letter to management which does not have control of the company to initiate a large buyback. I may still proceed on that. For now I am not sure I have the skill nor the energy to do that fight. This is a foreign country.