The Good, The Bad & The Ugly — EOS Energy misses massively, Oddity Tech loses 49% in a day, and Mercado Libre goes nowhere for five years. We dig into three portfolio battle scars and what every investor can learn from them. Plus: WSW hits #19 on Pod Ranker’s Top 25 investing podcasts, and an Alex Honnold-inspired lesson on managing fear as an investor.
📉 The Good, The Bad & The Ugly — EOS Energy misses massively, Oddity Tech loses 49% in a day, and Mercado Libre goes nowhere for five years. Luke and Krzysztof dig into three portfolio battle scars and what every investor can learn from them.
💥 EOS Energy: Betrayal or Gray Area? — Monkey breaks down the emotional rollercoaster after EOS missed guidance by 30-40%, supply failures, yield problems, and insider selling. Was this management fraud, or an ethical gray area? Should you stay or sell?
📊 Mercado Libre: 5 Years, Zero Gains — MELI has delivered great fundamentals — revenue up 400%+ — but the stock price is down ~6% over five years. Luke defends the long-term thesis while Krzysztof challenges whether “feeling good” about a company is enough when the price says otherwise.
💄 Oddity Tech: Black Swan or Fat Pitch? — A Meta algorithm shift wrecked Oddity’s customer acquisition model overnight, sending the stock down nearly 70% from its highs. Krzysztof makes the case that a company trading near its cash balance, with 25% revenue growth and 70% repeat customers, might be a rare, asymmetric opportunity.
🧠 Managing Fear Like a Free Climber — a powerful insight from Alex Honnold’s interview on Diary of a CEO: the goal isn’t to eliminate fear — it’s to develop a relationship with it so you can act rationally when it creeps in. A must-listen for any investor navigating volatility.
⚖️ Portfolio Allocation: The Bear Trap You Set for Yourself — Luke delivers some tough love: if a single stock’s earnings can leave you emotionally wrecked, your allocation is too high. Hard limits, tax tail, and house money fallacies all get unpacked.
🏆 We Made the Top 25! — Wall Street Wildlife lands at #19 on Pod Ranker’s list of the best investing podcasts in the world, alongside We Study Billionaires, Motley Fool Money, and Invest Like the Best. The jungle is growing.
Segments:
00:00 Cold Open — The Bear Trap
00:49 Welcome & Episode Overview
03:06 The Good: Top 25 Investing Podcast
07:16 EOS Energy: Setting the Scene
10:32 The Miss — Guidance vs. Reality
13:27 Supply Failures, Yield Issues & Insider Selling
17:00 Lie by Omission? The PayPal Analogy
20:05 Should You Sell If You Distrust Management?
27:29 Luke’s Psychiatrist Moment: Portfolio Allocation
33:20 Mercado Libre: 5 Years, No Returns
36:26 The Fundamentals vs. Price Action Debate
40:05 Squeezing Luke’s Shoes
46:41 Oddity Tech: Record Results Meet Technical Storm
50:00 Meta’s Algorithm Dislocation Explained
54:17 Is Oddity a Fat Pitch or a Black Box?
57:21 Warren Buffett on Fear & Cheap Stocks
01:04:00 Patreon Update
01:04:55 King of the Jungle Portfolio — The Ugly Chart
01:07:40 Climbing Without Fear: Alex Honnold & Investing Psychology
01:11:39 Wrapping Up — Three Investing Ideas: EOSE, ODD, MELI
WSW – EP122 –
[00:00:00] Luke: here’s like the bear trap you set for yourself. Because no matter what a company in your portfolio does, you should not as an investor feel like emotional and distraught
[00:00:11] Krys: this is the hard part for all our listeners. This is really the gray area and what makes investing such a challenge.
[00:00:18] Krys: I, because I follow these guys for so long, I actually like them
[00:00:22] Luke: I dunno what your number is, but you should have a hard limit and you’re like, I will never let any stock get above X percent.
[00:00:30] Krys: if I let the fear right now overwhelm what I think is a clear, huge opportunity to invest in this market
[00:00:37]
[00:00:37]
[00:00:49] Luke: Welcome to the Deep Investing Jungle with your hosts, Luke the Badger, Hallard and Christophe the Monkey pki. This week, what the hell happened to Eos? What the hell happened to Oddity? And why the hell has Mercado Libre gone nowhere for five years? This is a good, the bad, and the ugly episode.
[00:01:10] Krys: Badge, uh, uh, just reading those headlines, it feels like we’ve got the ugly, the ugly and the ugly. So we got, we got our work cut off for us to at least find something that’s not outright ugly and then hopefully, you know, pivot to, you know, some silver linings and, uh, find some good amidst the rubble.
[00:01:30] Krys: I’ve been thinking. Hard over the last, what, uh, five days I guess. Uh, EO earnings came out on the Thursday. Oddity had their complete disaster earlier in the week, so I couldn’t wait to record this episode to down offload. You know, a lot of, a lot of whatever’s going on up in here and
[00:01:53] Luke: look, I’m your, I’m your podcast co-host. I’m not your psychiatrist.
[00:01:58] Krys: you are today, buddy. You are today. You have a box of Kleenex for me.
[00:02:04] Luke: I do.
[00:02:04] Krys: So in fact, in fact, a lot of people, you know, have been asking me for, for what’s my take on the, uh, eos especially, and I have fra ref refused to saying things so as not to dilute all my thinking. So yes, you’re gonna get it all and I think this is what’s gonna be interesting. I legitimately have decisions that I’m thinking through that I have not acted on. And this is why I love it when we do it this way. I’m gonna tell you my choice points, what I’m considering. You’re gonna give me some, hopefully useful feedback to consider and see how I end up navigating some stuff,
[00:02:44] Luke: And I did. I’m going to, I’m gonna give you a hard time on eos because I, you know, you did post a, uh, a pretty big missive to the Patreon the other day, telling us about your thoughts as the news was dropping. I haven’t fully absorbed the news, but I’ve got some concerns about. The way you are thinking about the company, but we will get to that.
[00:03:06] Luke: Before we do any of that, shall we at least do a tiny bit of the good?
[00:03:11] Krys: A tiny bit of the good upfront to not scare, to not terrify, to not not terrify our listeners. Sure. Give us, give, give us a taste of some honey before we Yeah, sure.
[00:03:23] Luke: yeah. There you go. Perfect. So, uh, we made a list of the top 20, top 25 best investing podcasts in the world, and we’re number
[00:03:34] Luke: 19,
[00:03:34] Krys: what kind of, what kind of mom and pop shop has us in the top 25? How much do we pay these guys?
[00:03:44] Luke: Yeah, so, um, pod Ranker who, like, there are a bunch of these podcast outfits out there, and to be honest, you know, they might be a little bit self-serving in trying to drive traffic to their own site. But nonetheless, we made number 19 on the list of the top 25 best investing podcasts in the world.
[00:04:05] Luke: And it is actually a pretty legit list, to be honest. Apart from us, you know, randos at number 19, you’ve got, like, we study billionaires, which is 180 million downloads. They’ve been going for like well over a decade. Motley Fool Money, invest like the best Animal Spirits. Um, and then there’s us in position 19.
[00:04:28] Luke: So, uh, so we are, we are now legit.
[00:04:31] Krys: Yeah. We’re a thing. You, you know. Right. I was looking right. I was looking at this list skeptically at, at first, but because of the company we’re in, that alleviated some of my concerns. You know, what else is exciting about this badge in the world of finance? I imagine? Uh, it’s not a, it’s not a niche field.
[00:04:53] Krys: This is, I mean, who, I mean this is a massive market, so to speak, because it helps people make money. It’s not about knitting, you know, or crocheting. No disrespect to the knitters and crocheters among us. So to even, so I don’t know. In my own head I’m like, there must be like, I mean now, like the proliferation of Substack and you know, individual analysts on XI mean, there are thousands, right?
[00:05:21] Krys: I mean, there’s no shortage. So even to make a list like this is legitimizing. So that is excellent news.
[00:05:29] Luke: Yes. Well done, well done, Christophe, for being part of the team that made number 19 on Pod Rankers list.
[00:05:35] Krys: Excellent. Well done badge. And as we were talking a little bit before the show, I think this is more incentive for us to get even better, right? I mean, when we, I mean on YouTube we’re at like, what, 5,000 something, uh, subscribers. I think when, when I listen, maybe this is a little bit of a tangent, but. As far as inspiration goes, there’s many incredibly wonderful shows or podcasts where for several years, right, they’re trucking along, giving value, so their, their audience finds them little by little.
[00:06:13] Krys: That’s been our pace, right? And then all of a sudden there’s a massive inflection point because they kept trying to get better and kept, you know, and it was already in the wall that we had enough. That’s where we’re at, right?
[00:06:27] Luke: Right. Yeah. We can, you know, just getting 1% better. Every episode makes a massive difference in the long run, right? It’s compounding applied to our podcast process.
[00:06:38] Krys: Yeah. So I’m excited. I’ve never been more motivated, to be honest. Uh, not only there’s lots of forces aligning for us, the Wall Street Wildlife University, we have the community portfolio. Uh, our Patreons are alive and bushy tailed. I mean, you know, we’re killing the market despite all the ugly nonsense that happened, uh, for a lot of our holdings this week.
[00:07:05] Krys: So through thick and thin, right? I’m, I’m excited to keep going and, and keep getting better.
[00:07:11] Luke: yeah.
[00:07:12] Luke: Alright, That was the good. That was the good. Now let’s start the bad.
[00:07:16] Krys: So let me offload to you the facts. Let me paint the picture. This deserves, I think this deserves a full background, so only it’s, I guess, only 95 days ago where the November earnings call, where EOS had their November earnings call. And on that call, 30 days into the quarter. They were basically as bullish as I had ever seen a company be, including not just the CEO, but the chief operating officer, who is a world class operationalist.
[00:07:56] Krys: They brought in to basically make their battery lines even better. And they were talking about how quickly they could expand. Okay, so then you have that bullish call on top of every last tailwind imaginable in the age of AI tax credits and tariff protection and data center demand. And they’re linking up partnerships.
[00:08:24] Krys: So all the issues around demand, basically were being more or less put to bed. the thought of selling. You know, as a long-term investor, the thought of selling in this moment would only have been for portfolio management reasons. And if you remember, I actually sold one of my calls at a very big profit for that reason.
[00:08:46] Krys: But it was not, because, you know, I wasn’t trying to be cute. I was trying to manage an oversized portfolio. So that was a correct decision.
[00:08:54] Luke: Yep.
[00:08:56] Krys: But, and mind you, in hindsight, everything else is obvious. But that’s why I’m trying to reiterate this, this narrative, there was zero reason really in that moment from what was known to, to get funny and cute. Also, let me add another point. Uh, one of the powers of X, the EOS community, especially the OGs that I’ve been on this journey with for years, got really sophisticated in the kind of analysis they were bringing to the table. And one of the data points was how much felt shipment EOS was receiving weekly.
[00:09:30] Krys: That was another data point to track, and they were, they were increasing their shipment. So you don’t keep buying more and more product if all, you know, if you have nothing to do with it. So basically, all of which is to say all the data available was to the upside. Lo and behold, we get earnings on Thursday morning and, oh, sorry, I left out the most important, uh, piece.
[00:10:01] Krys: So they reiterate guidance 30 days into the quarter. You, I mean, the, the thinking on, on, on the investor standpoint was you don’t, unless you’re an outright idiot, you don’t, you don’t say you’re gonna meet lofty guidance unless you’re very confident you could meet it. Fast forward to the earnings call. They miss massively guidance was expected to be 92 million.
[00:10:32] Krys: They came in, I believe, 58.
[00:10:35] Luke: Oh.
[00:10:36] Krys: Uh, whatever the number was, it was 30 or 40%. The, the point is they missed by a lot.
[00:10:42] Luke: Yep.
[00:10:43] Krys: So here’s where we’re, so in that moment on Thursday morning, I’ll speak for myself, I felt incredible anger and I felt betrayed and I was left with, what the hell, like, how could this be? So as an emotional animal, one of the first things I went to was they’re liars, borderline, potentially criminal. I’m sure they’re gonna have lawsuits that there’s no doubt, I don’t know how many will be effective because, you know, but. The, the law industry will no doubt have their turn at this kind of thing, but I also noticed that yes, that’s my initial, you know, reaction from massive losses that probably could happen avoided.
[00:11:36] Krys: So I’m naming it to you. Management, it felt like yes, a betrayal of management. How could, how could you lie to us? Right.
[00:11:45] Luke: And you use, I’m, I’m gonna be your psychiatrist a bit because you are using like dangerous emotional language and obviously, you know, that’s like a reflection of what you’re feeling inside. But even irrespective of what the management team allegedly did or did not do, like to feel those emotions is probably unhelpful for you as the investor.
[00:12:10] Luke: And that probably tells you, you are probably too overexposed.
[00:12:14] Krys: Oh yeah, yeah. Well, let me continue my narrative. Yes. I’m just narrating this, you know, from the point of one, truthful vulnerability as this is what my process has been over the last five days. That was my animal reaction. That’s why I’m naming it. Uh, to your point, if this was only a 2% position, I would never have those feelings. Right. But my style was go big in the things I’m confident in,
[00:12:42] Luke: Huh? Mm-hmm.
[00:12:43] Krys: right? So that, right. That’s why when I feel betrayal, um, and there’s a lot at stake, anger, betrayal, all those things come up naturally. However, here’s the important point, I think as I continue narrating this, uh, over the next four days. I want to bring in some color, some, some granular details here and ask you whether it was management, betrayal, or even criminal activity, or whether this is, call it, uh, a, a, a, a really awful gray area.
[00:13:27] Krys: So here’s the facts. What is it that seems to have happened? Three, that on the call, they named three things. One is that they ran out of supplies and so they could not make the batteries because there was a supply issue. It obviously seems to me that happened after the call. Earnings call, so call it wild Card number one shows up two as the line is now running at full capacity.
[00:14:02] Krys: They have an issue with bipolar yield translated. That means the batteries ain’t coming out so good and they have to make adjustment to some of the tooling technology. So that reduces the yield and ultimately that ends up with a 30% downtime of that one line. So they were not making the batteries fast enough. They, they did not know this. Well, here’s the thing, they could not have known this on that call otherwise, if they actually still re, re reiterated guidance, that would have been absolutely just insane. So we, we, we could reasonably deduce, this all happened basically sometime in November and December.
[00:14:51] Luke: And let me, sorry, because I’m a bit fuzzy on the timeline. So, uh, we’re in start of March, so the earnings call was the end of February. So the, so they first, the first, the prior earnings call was what? The end of
[00:15:06] Krys: Uh, November.
[00:15:07] Krys: uh, be, uh, November. November, yeah. Early November, I believe.
[00:15:12] Luke: Okay. Early November. And then they reiterate guidance like early December. And then February they dropped the bomb.
[00:15:18] Krys: Well, no, the, the guidance was re in in November. So,
[00:15:22] Krys: um, so they had October’s data. So everything’s going fine in October, but something happens basically in November and December. Right? Now here’s, here’s the thing. Uh, this is a ramping operation, right? This is trying to, this is doing a very difficult, manufacturing is hard.
[00:15:42] Krys: That’s why there’s no battery makers in the United States, outside of Tesla, right? That’s succeeding. That’s why there’s such huge stakes here. That’s not necessarily the issue. What I was left wondering all weekend long was how management could have, what, what ought to have done Instead. What they chose to do essentially is, I’m calling it lie by a mission, right?
[00:16:08] Krys: Like I’m not doubting that they already knew this stuff was bad and then they outright lied on the call. That seems implausible. But what they did not do is issue a kind of, I guess, warning mid-quarter and they more or less went along as though nothing is happening. And, and the bad taste in a lot of investors’ mouths is that we also saw some insiders selling in late December.
[00:16:34] Krys: Uh, one of the main holders sold massive amounts of shares,
[00:16:38] Luke: Yeah, beaver, uh, beaver picked that up and tweeted about it a few days ago. That seemed kind of ugly to me.
[00:16:44] Luke: Which, who and who, who was that? Like of all the insiders, who was the main seller
[00:16:49] Krys: I, I believe I’m going off memory, I believe he’s a board member, uh, 10% owner.
[00:16:55] Luke: Okay. Alright. So, but not the CEO? Not the COO.
[00:16:58] Krys: Correct?
[00:16:59] Luke: Okay. Okay. Fair enough.
[00:17:00] Krys: So I’m trying to now be reasonable here, and I thought about what happened with PayPal as a, as an analog, because PayPal was beaten down badly. There was talk of things recovering, and then the CFO goes to some conferences and says, this ain’t gonna be a good quarter. And the stock goes down further.
[00:17:23] Krys: And I’m thinking, okay, that’s one way of handling it. Your stock still goes down, but at least they’re being upfront. Right? The issue here now for a lot of investors is, is in a difficult moment like this, it was gonna be bad. Excuse me. Bad news either way, right? Whether you give a warning or you wait till the earnings call, the stock’s gonna drop.
[00:17:50] Krys: But by not saying anything, then going to Davos and talking about all the future products, now we’re left with the inarguable point that when they issued guidance of 300 to 400 million for the full year, in what world do we believe anything they say,
[00:18:11] Luke: Yeah.
[00:18:11] Krys: right? Knowing that they might be lying by a mission now for, you know, to be honest, I, my take, and maybe this is what listeners want to hear, is that I think this was the whole throw all the bad news out there as fast and directly as possible in, into the earnings call.
[00:18:35] Krys: Now they start low balling things and they flip the place. You know, they flip the script. Trying to then rebuild the, the, the lost credibility. That’s, I think, what’s actually happening here, most likely. But
[00:18:50] Luke: Just to, just to fact, just sort of fact check that or help us ground it. Like have they just dumped a load of bad news? So if they’ve, if they’ve now set out guidance for 300 million, is that very conservative or is that still quite optimistic?
[00:19:04] Krys: that’s very conservative because if you add up the megawatts that that one line that’s running could produce, it should be easy to get to 500 million, let alone the fact that they have a second line intended to be, uh, raised halfway through the year. So that’s an incredibly low guidance. Basically, that’s what shocked Wall Street.
[00:19:29] Krys: But that’s, that’s why, I mean, this is tangential. That’s why right now EOS is again, a really compelling investment. However, that still circles me back to what, what I think you and I were discussing on Patreon a little bit.
[00:19:44] Luke: Oh.
[00:19:45] Krys: I’m trying to legitimately determine whether this is a kind of management team that is out.
[00:19:52] Krys: Like I would put them like bad actors, right? Bad like liars, bad actors. Just willing to say whatever needs to be said. If that’s truly the case, I want nothing with a company like that. Right. And that’s, that was your point,
[00:20:05] Luke: Yeah, that’s good to hear. If that, if that, if that is how you believe, if that’s what you believe about this team, even if the company is like on the precipice of like doubling because of, you know, some incredible catalyst, you just don’t wanna be on that journey. You’d, you don’t wanna make money that way.
[00:20:22] Luke: ’cause who knows like what rug they’re gonna pull out from under you in the future.
[00:20:25] Krys: Yeah, absolutely. I, I am in full agreement with you there. I mean, it’s just a nasty thing. You can’t sleep well at night knowing you’re kind of in bed with criminals, borderline criminals, right? I
[00:20:36] Krys: mean. And this, this is the hard part for all our listeners. This is really the gray area and what makes investing such a challenge.
[00:20:45] Krys: I, because I follow these guys for so long, I actually like them, right? There’s something about, there’s some, the CEO and like I like is maybe a hard, hard, maybe that’s not the right word. They’re salesmen, right? So I like how they sound. I, I, there’s something about them that is, feels, I hate to be squishy about this, that feels decent and hardworking and they’re trying to build this big company.
[00:21:11] Krys: And so I’m trying to square that away with were they put in a position that was bad either way and they chose to take what I would call the lesser, the ethical route because they were gonna be screwed regardless for the benefit of the company. Temp short term at the expense of shareholder trust. That’s, I think, what happened, and it’s really uncomfortable, but I’m not sure that’s the same as, you know, the first bucket of malon, you know, outright malon. So I’m left with, I’ll turn it over to you. You know, like, I’m, I’m tempt, I was tempted to sell, then I regained composure. I’m, I’m, I’m not convinced that’s the right move at the moment.
[00:22:07] Luke: Like, like what? What a brass tack here are you? Is the leadership of the company trustworthy and. You know, like, is, is what they did, is it kind of like a white lie to protect the company or is it just like, um, well I dunno, whatever the opposite of a white lie is, like literally just, um, like pump pumping, pump and dump whatever they can to, um, enrich themselves or, you know, do like, manipulate the stock.
[00:22:42] Luke: Like where is it on that paradigm?
[00:22:45] Krys: This is why, yeah, the details of this seem to matter to me. bad news hit after they, after the call, that didn’t seem to be a pump and dump to me, that seemed, they were generally enthusiastic. As I said, the data were all really positive, the bad things happened, and now it’s a matter of basically emitting, letting the market know.
[00:23:12] Krys: And when I talk about oddity, by the way. Small preview, we’re gonna revisit this very thing again, is like, is a company, is a company required to always report the bad stuff immediately? Legally, obviously, no. That’s what the call quarterly earnings calls are for. Right?
[00:23:30] Luke: Right.
[00:23:31] Krys: But here’s the thing. I think of a counterfactual now badge.
[00:23:35] Krys: Let’s live in an alternate universe where they do send out a, a PR that says, look early December suppliers and the, you know, and our line is now down 30%, so stock plummets, right? Probably whatever, 25%. Right? Not good.
[00:23:55] Krys: But now we get to the earnings call late February and they this time say, look, we had a really rough go the last two months, but lo and behold, we fixed all the issues. ’cause they did. And now we’re here with, yes, the stock is down much lower. But at least trust is still intact. And now, right, the perceptions are from, what the hell is this to, okay, these guys are going through another difficult period, but they fix things and it’s investible still. So almost like a complete inversion.
[00:24:32] Krys: I don’t see why they don’t get fired. You know, this is, I would say, a fireable offense if I’m the board or cereus, right? So why didn’t they fire the guys? And I think ultimately probably they know them better than I do. Obviously they, they probably don’t think this was the kind of corruption level bad.
[00:24:56] Luke: or like the writings on the wall and the board is like, like the regulators or the market or the lawyers are gonna deal with this situation. Like we just need to. Let’s just kind of hold the party line and see how this blows up. ’cause you’re not gonna like, you’re not gonna throw your own CEO under the bus publicly until you have a very clear position.
[00:25:20] Krys: Well, curiously, PayPal did just that. They fired, uh, Chris because he, he was very rah rah. He was seemingly turning, you know, there was a lot of enthusiasm and then the numbers came in and they, that earnings call just got rid of him.
[00:25:36] Luke: PayPal, PayPal’s like an established giant. EOS is essentially like mostly pre-revenue, right? It’s still a very young company firing like a key leadership role could potentially be fatal. For a company like EOS isn’t, well, almost certainly isn’t fatal for a giant like.
[00:25:55] Krys: right. Well, small correction. I mean, now I know everything’s relative in size. They did make a hundred million dollars and they’re the first, you know, non lithium battery company, battery, average energy storage system company to have achieved.
[00:26:10] Luke: fine. Sorry. Okay. Not pre-revenue, but super tiny. Still fra fragile company.
[00:26:15] Krys: Yes, your point is still stands, uh, getting rid of a right.
[00:26:20] Krys: Getting rid of a horse midstream is foolish in many ways. So, ultimately, badge. Here’s the thing. I’ll, I’ll, I’ll put it down to a binary, binary choice. If I, to your point, believed. This is a corrupt management team. My decision should be to sell,
[00:26:39] Luke: a hundred percent.
[00:26:40] Krys: I think unfor for better, worse. This is enough of the gray here where I’m going to calm, calm my tits.
[00:26:53] Krys: I’m going to let the difficult emotions pass and I’m gonna give these guys one more shot to prove themselves over the coming year, assuming for better or worse, that they were now honest with us on the last call. They gave us all the bad news all at once. This is now a full production issue, which they solved, and hopefully it’s now under-promising and over-delivering, going forth. If they screw this up again, then I’m out, meaning not production, but the communication channels.
[00:27:29] Luke: I think that’s all fine. Now I’m gonna loop back to that psychiatrist comment I made like two hours ago. Um. Because what you said is correct and if you believe that
[00:27:41] Krys: Where my Kleenex, you got my, you got my box
[00:27:43] Luke: Yeah. Yeah. Like if you believe it’s fraud, da da, da. A hundred percent agree with you. You should be out. If you’re willing to give them a bit more rope, then that’s, you know, your prerogative as an investor.
[00:27:55] Luke: But here’s the, here’s like the bear trap you set for yourself. Because no matter what a company in your portfolio does, you should not as an investor feel like emotional and distraught and like strung out and I’ve made a mistake and you know, how dare these guys do this to me. So that’s not them. This is now you, you’ve gotta look inside.
[00:28:19] Luke: And it does, I’m afraid it does come down to portfolio allocation. ’cause if you have such a meaningful amount of your wealth, like your future, you, you know, you and your family tied up in this management team. Well, you know that that means you are suffering the consequences of their actions, and you should never let yourself feel like that.
[00:28:44] Luke: And so that’s if for no other reason, you know, that’s why you should be managing your portfolio exposure. Um, so that if something really goes wrong with a core holding, you’re still like, okay, you know, this is, these are the facts, but I can keep my emotions kind of contained.
[00:29:03] Krys: Yeah, I, I, I agree with you a hundred percent. This is, uh, this is a hard one because part of the reason the allocation was so high was because my gains were so high. It’s very counterintuitive. One, you, you get into paradoxical stuff, quick badge. It’s not like I’m disagreeing with you. That smart portfolio allocation is mandatory and simultaneously, uh. The position became so big because the growth is so big the don’t sell.
[00:29:35] Krys: Right? We talk about this all the time. If you find a winner, let it run for five years, 10 years, right? You, you, you let it go. And also tax implications, right? The, the selling at 800% gains the tax bill is massive. So it’s, I’m I’m saying it’s not so simple as I didn’t trim because
[00:30:00] Krys: I got lazy
[00:30:02] Luke: but it, nah, you’re making excuses. It is, it is that simple. you should have, I dunno what your number is, but you should have a hard limit and you’re like, I will never let any stock get above X percent. And for me it was 20%. Now it’s like 15%. You should work out your own number. Maybe it’s, you know, 30, 40%.
[00:30:22] Luke: Like you, you’ve got your number’s unique to you. And like you, you should never let the tax tail wag the investing dog. That’s always a mistake. Right? Um, and, um, and you, you know, and it’s num one, one of our laws of the jungle, right? You know, your emotions fear, fomo, greed. You know, if you’re saying, well, you know, it’s, it’s, it’s all you.
[00:30:49] Luke: You’re essentially saying without saying the words, it’s house money. You know, I started with a small amount. It’s up like 800%, 8000%. You know, suddenly it’s this huge number and you’re like, because of that, you know, I gotta let my winners run. These are, you are, you’re triggering a whole bunch of investing fallacies that we have documented as part of our laws of the jungle.
[00:31:10] Luke: You gotta go reread them.
[00:31:12] Krys: Yeah. Uh, you know, I, here’s the, the full picture. Actually the king of the jungle portfolio is a good mimic of my real world portfolio. So I’ll just stick to that. Uh, I did trim along the way
[00:31:28] Krys: is the irony, but it kept going up. So it’s not that I was ignoring the laws,
[00:31:35] Krys: it’s that maybe I didn’t, I wasn’t aggressive enough.
[00:31:40] Krys: My number used to be 25%
[00:31:43] Luke: Okay.
[00:31:44] Krys: max. so maybe that is the violation that that Right. The trim should have been even more aggressive in hindsight. Obviously it’s clear when the company is so damn bullish and everything is bullish. And I keep reminding myself of the other thing like, don’t sell for no, you know, you know, just ’cause you feel something.
[00:32:07] Krys: So it’s, it’s, your point is true I acted partially on the things you’re talking about, just not enough.
[00:32:16] Luke: Right. And that’s not, you know, when REM Rocket Lab was on an absolute tear, I was literally looking at it every morning and just saying to myself like, am I overexposed? And I think I sold, you know, on like a Monday and I sold again on a Thursday. Like I was that on top of just managing my exposure.
[00:32:35] Luke: Because I’m like, I don’t like if neutron fails, if something goes wrong, if Peter Beck, you know, dies in a helicopter accident, I don’t wanna be going, oh my God. Like how I’m such an idiot. I just wanna be managing it proactively.
[00:32:49] Krys: Yeah. So, uh, you’re, you’re right. And I violated the laws of the jungle. Partially, I would say I didn’t, in that I didn’t trim enough or aggressively enough, and I had my reasons for one of which you’re calling out.
[00:33:05] Krys: The taxes and uh, the timing would’ve, you know, yeah.
[00:33:10] Krys: It felt, yeah, I convinced myself that it would be silly to cut, given all the momentum that Right. the company.
[00:33:19] Luke: So what’s your, So
[00:33:20] Luke: so let’s just close out your final conclusion. So you are gonna stay on board and it sounds like you’re gonna give this management team more room. Are you gonna tweak your allocation so that if they let you down again, it doesn’t hit you inside so hard?
[00:33:34] Krys: at this point, I think the market tweaked my allocations for me.
[00:33:40] Luke: That’s fair. Okay. That’s
[00:33:41] Krys: You know, unfortunately, I mean, the drop, so at this point, the valuation is, you know, quite reasonable. And if they’re at all successful in fixing these issues, which they said they did, then all of a sudden I’d be actually buying here rather than selling.
[00:33:57] Luke: Okay. Fair enough.
[00:33:59] Krys: So it’s now gonna be just market price action. You know, who, you know, do institutions believe that this is the low point for this company?
[00:34:08] Luke: Right.
[00:34:09] Krys: ’cause
[00:34:10] Luke: Alright.
[00:34:11] Krys: we just lost some time. Nothing really broke besides trust and management.
[00:34:18] Luke: Which is very important, but Yep. Okay.
[00:34:20] Krys: Yeah. So, uh, I hope, I, I guess I hope for our EOS investors that that’s enough of a, of an overview.
[00:34:29] Luke: we’ve got, we’ve got three uglies to tackle this episode. I feel like, you know, you’ve put your heart on the floor. Maybe I should go next and then we’ll come back to Oddity just to
[00:34:38] Luke: give you a break, emotional break for you.
[00:34:41] Luke: So go on, hit me, hit me, ’cause you, you basically threw some chart at me about Mercado Libre.
[00:34:46] Luke: Go on, hit me with your allegations.
[00:34:48] Krys: Uh, the, the allegations were quite simple. Uh. I, as a former Mely shareholder, know and love the company. I regret not having it in my current portfolio. You know, I’m in tune with valuation. I see that it’s a goodbye, so I pull it up on my Robin Hood. You know, I’m browsing, just thinking loosely. I pull up the chart, I hit the five year timeframe, and to my great shock, I see that randomly, it’s random.
[00:35:18] Krys: You know, I decided to do it on whatever day, February 27th, five years from 2021 to 2026, Mercado Libre. This great company over those five years actually was down something like close to 6%.
[00:35:36] Krys: And so my thoughts in that moment were, holy cow, I did not expect that to be the case. Secondly, I thought, wow, if, if the actual stock price lost, uh, 6% over five years and the SMP is up by however many percentage points, objectively speaking, that’s a bad, bad investment outcome. Third thing I thought badge before I turn it over to you is that five years is not a, a, uh, drop in the ocean.
[00:36:09] Krys: Five years is, I would say all long-term investors say that’s kind of a decent measuring stick. If you can’t, if you’re losing to the market over a five year period, something, something not right. So that was the shade I threw at you and, uh, curious to see how you respond to that.
[00:36:26] Luke: that’s very fair. Like that’s just the reality of the company. And you’re right, five year, like I always, often we talk about, oh, you know, the stock is down and my kind of excuse is zoom out. You know, you look, you can’t look at one quarter, one year, five years is that’s, that’s very fair timeframe to judge a company by.
[00:36:47] Luke: Um, and I’m not gonna make excuses for this one. Um, I just, but I, you know, I kind of don’t care, right? I feel like this company is actually in great shape and, um, and I think the valuation is pretty reasonable. like if we ignore the stock price and the market cap and we just look at like some of the metrics that matter.
[00:37:13] Luke: Gross merchandising volume is up and growing at an escalating rate. And then here’s this pretty picture from our friends at Fiscals, our AI. You know, just looking at revenue as one small thing, revenue is up and growing at an accelerating rate, and here’s your five year timeframe. You know, revenue is like more than a 400% gain over that five year timeframe.
[00:37:39] Luke: And yet there are reasons why the market is concerned about them right now. You know, a few years ago it was inflation in some of the core markets. Right now it’s kind of concerns about the, the rapid growth of the credit portfolio. Um, but if you dig into how Mercado Libre are managing the credit portfolio, it’s actually quite healthy.
[00:38:06] Luke: Net interest margin after losses is growing. That’s a good thing. That means like they’re making more money, uh, as a proportion of the total like loan book, the um. The sort of losses on bad loans is decreasing, so they’re improving like the quality of the loan book. So there are things to watch there, but maybe the market’s being quite pessimistic about that.
[00:38:31] Luke: And then the other thing that the market’s not really happy about right now, but I frankly love is the fact that the company is just like burning CapEx on building out its logistics infrastructure. So if you were to look at this just based on a pure, like the num, just pure numbers, then it probably looks quite ugly ’cause the company’s spending a lot of money, but what they’re buying is a much more robust footprint.
[00:38:59] Luke: So one small example is, um, they’ve been able to very recently announce that they can reduce the minimum cost of an order that qualifies for free shipping. And so they’ve done that a few times. They did it again quite recently to reduce it to like, I can’t remember, like 19. Uh, what, um, whatever the local currency is.
[00:39:21] Luke: Um, and then that in itself is causing people to buy more. ’cause they can get more, you know, smaller orders for free. So it’s expanding the market and as they expand the market, you know, they’re increasing their revenue on goods sold, or, you know, third party sales and first party sales. And they’re massively increasing their FinTech revenue because these things are like a really nice flywheel that work together.
[00:39:47] Luke: So the companies are like investment mode. The market don’t like it. It’s very similar to the Amazon story a bunch of years ago. And when they come out of investment mode and they turn back on like the profitability pipeline, I feel like there’s a lot of, uh, potential built in here. So I’m, I’m kind of happy with the company.
[00:40:05] Krys: All right. Badge. Let me squeeze your shoes. Let me, let me take, let me, let me take the, let me do to you what you did to me in, in good faith, and I think I, I think I have the proper spin on this. I think you’re making an error in one fundamental sense when you say, I feel you said something like, I feel this is a good company despite what the price did over the last five years.
[00:40:38] Luke: Yeah.
[00:40:39] Krys: The critique is five years is a long time to feel one way. But the objective, literal outcome being read is not a reason to feel good. It should be, I feel bad that this is a good company and I’ve lost mo money over such a long period of time.
[00:41:01] Luke: Ah, well, let me fact, let me just fact, let me just fact check that because I wanna throw one more graphic into the mix, but I, I hear what you’re saying and I want you to finish that thought. So I have bought this company seven times now, initially in 2019, most recently, uh, last Christmas, uh, yeah, December, 2025.
[00:41:22] Luke: And, um, here’s a extract from Port Cido, which is, you know, like as close as I’ve got to, like an audited portfolio history. So actually the column that you’re interested in here is the excess total return. That’s like the percentage return beyond like the s and p as a benchmark. So like my f if I look at my first three purchases, one is up 40%, one is down 44%, one is up 7%.
[00:41:51] Luke: And then my most recent four purchases in the last year and a half are all like significantly underperforming the market. But overall I’m up pretty nicely. ’cause you can’t see on here. But like those early purchases were. Kind of much larger in terms of number of shares,
[00:42:07] Krys: Yes. That’s, that’s every, right uh, every investor’s journey is different. You added a at point. So I, I get that. I was talking right in the abstract
[00:42:19] Luke: Yeah.
[00:42:20] Krys: five years. So this is why I think my reframe is important to consider. You could either say. Five years is on the short end of my timeframe if you want to.
[00:42:35] Krys: Now you’re saying I invest in five and 10 year blocks and therefore five years is just the halfway point. And that’s why I’m not concerned. But now obvious asterisk is not everybody has in easy 10 years or, you know, like that’s getting into mortality territory, but potentially you might die before, uh, your company makes good. And so I think the more accurate way I would phrase it is I’m disappointed that the company of this quality has underperformed over long duration. But because the fundamental metrics continue to be sound, I expect a rebound over the next five years, however. It’s unfortunate that it’s taking so long and that capital would have been better allocated somewhere else or some, something like that.
[00:43:35] Krys: I’m just pointing out the feeling versus price action. And here I wanna give more weight to what the price action was and, and this is right, this gets into the technical analyst versus the fundamentalists and the technical analysts all day will say, we don’t care about your feelings. This was bad investment over that timeframe, which is arbitrary.
[00:43:59] Luke: It is not arbitrary. It’s correct. Right. So, you know, any purchase I’ve done in the last two years has been a bad purchase ’cause it’s seriously underperformed the market. That’s, that’s just a fact. But like, as you said, like the argument put, put my feeling aside, if you just look at, say, I’m a, I’m a fundamentals guy.
[00:44:18] Luke: And you know, you are, you are leaning on the technicals here thing here, but I know your fundamentals and technicals, um, technicals bad fundamentals great. In fact, almost superb. So that’s, that’s kind of the reason why I feel okay about this because the fundamentals support the fact that this company is actually pretty good value right now in a market that, you know, recently you couldn’t find a bargain anywhere, which is why I was adding to Mercado Libre.
[00:44:48] Luke: Like now there might be bargains ’cause like the SAS apocalypse and everything else we’ve talked about.
[00:44:53] Krys: yeah, and of course we know lots of examples where the company was, was flatlined for years and years and years as that pressure of the value kept increasing and all of a sudden there is that massive inflection point. That’s where though. To argue against myself. That’s where the technical people would say.
[00:45:13] Krys: Then you just wait until you see that inflection point happening, and that’s when you go in rather than sacrifice five years of underperformance, uh, because you, you know, you, you like the company. But, um, but that’s gets into a whole conversation. I, I don’t think we need to have right now ’cause that’s timing and all sorts of other things.
[00:45:36] Krys: What is your, say, moral of the story that you’re gonna take away from this back and forth about owning Melly over the last five years?
[00:45:49] Luke: I, I mean, call me an ostrich if you want, and stick in my head in the sand. I’m, I’m actually happy with the way I’ve played it. I haven’t got any concerns.
[00:45:59] Krys: Okay.
[00:46:00] Krys: There, there, there, there you have it folks. I I, I, I’d love to hear. Yeah, no, I, I, I can’t wait to hear what our Patreon community and our YouTube folks say, because I, I could see both sides of it. You know, I think I’m leaning heavier on the, you still don’t wanna lose money over five years as being not something to feel
[00:46:19] Luke: Well, it’s, it’s, it’s, I’ve lost money over, say, two years. ’cause those, those were the specific, if you treat each of these seven purchases as like an
[00:46:27] Krys: right, right.
[00:46:28] Luke: thing,
[00:46:28] Krys: Uh, that’s right. This, this is why it’s a little messy because your personal situation is different from the abstract one I was looking at
[00:46:36] Krys: All right. Um, so what more ugly from me?
[00:46:41] Luke: sure. Remind us, so you gonna tell us about Oddity? Just give us a quick reminder on who Oddity are and what they do. This is the makeup guys. Right.
[00:46:50] Krys: Yes. So, um, I made a fancy slide deck. I’m doing a very deep dive on, on Oddity because I think this is potentially a massive opportunity that the market is giving us. And I was, believe it or not, very, very tempted to add this morning before we recorded, but the technicals unfortunately didn’t allow me to, to do that.
[00:47:14] Krys: So I’m following my own medicine. but it, but here’s why I’m fascinated by this company. If editors could, uh, call up the first slide, record year meets technical storm. There, you kind of have the, the thesis statement and what happened all in one sheet. Record revenue, 25% year over year growth. Very high margins, 72.7% earnings positive, free cash flow positive and massive balance sheet, seven 76 million on the balance balance sheet.
[00:47:54] Krys: Really, really superb company. I think in terms of massive tam, just quarter after quarter, just expanding grown fast. They’re about to announce a fourth brand. Everything to like here already. I thought it was cheap. Actually technical stopped me from buying more because I think, I feel it’s cheap, but it keeps dropping and dropping and dropping.
[00:48:17] Krys: So I’m waiting. Then we get the last earnings call and there’s this massive bomb that on that day they lose 49% and it’s gotten even lower, uh, since then. So technically speaking, uh, as of right now, it’s valued at $685 million market cap. With, if you do basic math, seven 76 million in cash though, there’s a 600 million debt note, by the way.
[00:48:48] Krys: It is 0%. It is 0% due in four years. So it’s not, you can’t just wish the debt note away, but it’s really not going to be in the issue. F you know, four years is a long time for a company growing this quickly. So to play it, to play it sort of neutral, I’m saying they’re, they’re financially well positioned where the enterprise value is something like $500 million, right?
[00:49:19] Krys: Trading. In other words, the market is basically saying, this company is worth very, very little at this point in time, why? What the hell happened? Badge? What happened is they went on the call again, did not announce it ahead of time and said. I’m para phrasing here. If actually if Here’s the explanation. They offer a try before you buy model to consumers, which I actually think, and they say is, uh, has led to really, uh, what’s it called? Robust retention. And customers love this. They get to buy the products for free, keep it if they like it, return it. If they don’t, that’s really pro-consumer.
[00:50:05] Krys: That’s Amazon kind of thinking, right? Uh, make the customer happy. But something happened during the quarter, during the, the last 90 days where the algorithms, uh, they wouldn’t name it, but it’s pretty obvious that it’s meta tweaked their algorithms such that the tribe before you buy customer model were degraded in terms of their.
[00:50:32] Krys: The rankings. So they were basically, it shifted somehow from we want the, we want to show these ads to, these are lower quality customers, which led to them basically needing to pay more per customer AC acquisition, right? Unit Calc, cac, or whatever it’s called.
[00:50:54] Luke: Yep.
[00:50:55] Krys: So at the moment, what the suits told us is that at these current Economics, oddity is not a profitable business because that, that, that algorithm, they call it dislocation, is so bad that it needs to be fixed right away.
[00:51:16] Luke: That’s so mean that that’s actually, that’s horrible, isn’t it? The, the fact that your whole business model is so reliant on like a, a third party, like meta or, you know, whichever advertising platform. That a change to the algorithm can smash your customer acquisition cost, which can like pull apart your business model.
[00:51:33] Krys: Right. And this is, this is why this is where you and I could maybe talk through this. I’m, you know, my, my paws are hovering over the buy button, but, but not yet. And here’s what I need to think through, or any investor here needs to think through. Like eos, the error seems to be in hindsight, how do you just have one, call it supply line, right?
[00:51:55] Krys: EOS didn’t have a choice because they’re literally hardware company, right? They only have one building, they’re working online. Two. But that was the risk, right? So. They’re not, I mean, sorry to go back to eos, it was dumb. How could you be the CEO and not have backup suppliers for God’s sakes, right? But the same issue here.
[00:52:16] Krys: How can you somehow have been a $4 billion company at one point and only relied on one advertising channel? That’s the critique, right?
[00:52:27] Luke: right.
[00:52:27] Luke: right.
[00:52:28] Krys: But now going forward, okay, so the market completely sold off the company to the tune of 70% since the earnings call or massive ma, right? It was over well badge from the highs of 77 down to $12 at the moment.
[00:52:43] Krys: That’s like insane what the market is saying now. And, and by the way, I’m gonna return this to that first slide. They’re profitable. They have in, I mean, this is a growing, healthy company
[00:52:58] Krys: to
[00:52:58] Luke: well, they weren’t, they were profitable, right? ’cause you said they
[00:53:00] Luke: weren’t.
[00:53:01] Krys: Technically as of last quarter, they’re profitable, they’re positive on all the metrics and growing. Um, so the question for investors is, what about TikTok? What about Snapchat? What about I, I, I don’t know, I don’t know how else you advertise, but who, what laws of physics say they are only bound to meta? And by, and also there’s a lot of institutional ownership insiders own this company. I, I’m having a hard time arguing against myself saying, these guys are just gonna now sit on their hands and say, well, I guess we’re stuck with the one channel and, you know, we could better pray and hope that meta helps us, you know, figure out the algorithm thing. I don’t see that as the reality. They’re gonna fix it. It’s probably gonna be in the ugly next quarter too. But the problem badge, I don’t know if you have additional insight here. I don’t know enough, you know, about how the, those intricacies of algorithm, uh, mystery, you know, how they, how they work, how long does it take?
[00:54:17] Krys: Like what do they get to call up a meta, you know, I’m sure they have an account, right? This is billion, you know, hundreds of millions. So it’s not like they’re small fish. They’re gonna talk to people. How does that get, get unresolved? Or does it get resolved? Is this an impossible situation when now they’re dead?
[00:54:35] Krys: Like one error and you’re completely screwed.
[00:54:37] Luke: I dunno, I, I, I, I know no more than you, but if I were to think, okay, like, like meta have tweaked the algorithm for some reason, and they wouldn’t do that arbitrarily, you know, they’re doing that to maximize their own bottom line. So they’re trying to deliver value. ’cause they still want, like, their META’S customers in this case are the appetizers.
[00:55:02] Luke: But, um, you know, they’re, they’re sort of pivoting and maybe make, like, maybe if you are in different segments and selling something other than makeup, maybe suddenly, you know, your advertising might be a bit cheaper. I don’t know. Um, so can, you, could, should, should the company. Like have multiple advertising partners, 100% and Meta own like a lot with like Facebook and Instagram and a bunch of other stuff.
[00:55:28] Luke: But yeah, there are alternatives like TikTok and Google. Maybe, maybe Google doesn’t hit your market as easily, but I would think TikTok was a similar market to Instagram. But if, if Meta have made those changes because of some evolving market dynamic, maybe TikTok are seeing the same thing and they would be making the same change.
[00:55:49] Krys: it’s okay. May maybe I, I’m, I’m going off of the most reasonable path forward, which is that explanation, which is that this was a misunderstanding somehow. By which I mean the try before you buy program is actually a good thing. The algorithm, Reddit as a low quality thing, and that mismatch will be fixed and communicated when the people in charge of these accounts basically understand or explain the dynamics.
[00:56:22] Krys: Right? That’s, that’s my going thesis. Um. The, what I didn’t mention also badge about this company is that most of the people who buy the, one of the brands are returning customers. 70% I believe. So their cash flows are already locked in. They’re gonna, they’re not, most customers don’t know, don’t know anything about algorithms once they bought, right?
[00:56:48] Krys: They’re already in. So the cash flows are gonna come back. It’s just how fast can this be fixed? That’s where it’s a little bit of a black box to me. And it seems in borderline inconceivable that this does not get fixed. It’s just like, how soon and could the market break, you know, sell this even lower.
[00:57:08] Krys: That’s what the technicals are for, right? The technicals are saying, right now, you, you shouldn’t touch this thing. Although, interesting, it’s recovering in the moment. Um, but you know what, side note, I wanna read a Warren Buffet quote, and
[00:57:21] Luke: Hm.
[00:57:23] Krys: this is what makes this even trickier. Buffet says. If you’re a young investor and you can sort of stand back and value stocks as businesses and invest when things are very cheap, no matter what anybody is saying on television or what you’re reading, and perhaps if you wish, sell when people get ter terribly enthused, it is really not a very tough intellectual gain.
[00:57:46] Krys: It’s an easy game if you can control your emotions well, so basics, let me sum this up. For anybody listening, I’m seeing a really strong company Black Swan event that I don’t fully understand. it’s not, if I were to buy this for King of the Jungle portfolio would not be out of impulsivity. It would not be out of emotional. It’s because I’ve considered carefully the the numbers that are in front of me and. It feels like a temporary, huge opportunity to take advantage of something that will be inevitably fixed For me to not take advantage of this feels like I would be giving into too much to loss aversion or, you know, risk aversion, or I would have to say the black box that is advertising is so beyond my understanding, and I’m only hoping that it’s going to get fixed, but it’s like, who knows? So I stay away for that reason.
[00:58:51] Luke: It is like a different kind of trust in management. It’s not like you distrust them. It’s like, do you believe that they have the capability to now learn from this error? Sounds like they made an error and can they now, you know, fix that in some way. And if you trust in their ability to navigate that successfully, then yeah, like there’s no.
[00:59:15] Luke: It’s not like an ethical or something like that kind of issue. It’s just like it’s a capability issue.
[00:59:19] Krys: right. And, and to that point, in doing this research, there was a big thing when Apple, I think it happened around io iOS 14 started saying, you know, that warning you get now when you buy an app, uh, it allows users to not track be tracked. Companies like Oddity. That was another Black Swan moment, and they navigated that successfully.
[00:59:44] Krys: So management has done this before. I, here’s, here’s what I’m gonna say for the record. I would be disappointed in myself. I think if I let the fear right now overwhelm what I think is a clear, huge opportunity to invest in this market and to be determined how I take action. Right now I’m watching the charts, but that’s where monkey stands.
[01:00:11] Luke: Yeah. Sounds that sounds fair to me. Yeah. you know, bad, it’s, again, it’s a small company. It’s in its niche. Like you things can hit small companies and disrupt them, and sometimes it’s in the control of the management team and sometimes it’s not. And so, you know, that’s why we manage, I’ve gotta come back to allocation again.
[01:00:35] Luke: That’s why we like manage our allocation to like the smaller, much more volatile stuff so that it doesn’t make us feel like exuberant or sick when something crazy happens. Um, but I’ve got no concern. You know, I’m not, I’m certainly not gonna throw any sticks and stones at you for saying this might be a really good buy right now.
[01:00:55] Krys: Yeah. And, uh, by, on Petron, we had a conversation about Oddity. It was, um, I’d like to mention this. This is where my process works well. As I was learning about this company, I bought one share at $36 because at the time that felt really, really cheap. And then I used my, I used my technicals for that, and then things went even lower.
[01:01:21] Krys: So the selling pressure continued and I refused to add because of the technicals. And now. As I’m looking at it, it is a little bit of at what point do I override the technicals, because the fundamentals are so obviously asymmetric, and that’s a difficult question. That’s where I’m basically trying to juggle the two worlds, and those who are really risk averse would say, yeah, you wait.
[01:01:50] Krys: You really wait until the buyers step in. That proves that we’ve basically had an exhaustion of the supply, and so we don’t quite know when that will be. So for now, I’m holding off.
[01:02:04] Luke: I mean, I, I know nothing about the numbers of this company other than what you’ve shared in your two slides today. If putting aside like the operational cost of marketing, which sounds like it got away from them, if the actual product the company is selling is profitable, you know, on a unit cost basis.
[01:02:23] Luke: And if the company is trading at less than one time sales, then you know, some of the important fundamentals are kind of on your side there.
[01:02:32] Krys: This is a, I mean, this is what’s wild. Some of you know, I can’t wait to have this conversation a year from now because again, everything will be, in hindsight, when you have this much growth, this much profitability, this much room for expansion, this, and, and valued, as you know, basically close to cash. That’s. One of these fat pitches that, unless, you know, the algo thing is way worse than I understand it to be, these kinds of fat pitches are rare in the market where, you know, it’s only now the fear portion. So, um, I never thought of myself as a, a makeup guy, you know, but that’s the, the other thing is, that’s only one, one of their lines, you know, they expanded into acne and dermatological, uh, telehealth stuff, which is a huge market,
[01:03:29] Luke: Don’t say telehealth. Don’t say telehealth. You’re just, you’re cursing yourself.
[01:03:34] Krys: right, right, right.
[01:03:35] Krys: Yeah. Yeah. But no, this is, anyway, for, for all our listeners, if you have not yet done a deep dive into Oddity Monkey put together, with the help of his AI buddy, he worked a really long time on this, uh, oddity slide deck. Which he will upload somehow on the Patreons for y’all to take a deeper look at this company.
[01:03:56] Krys: It’s a fascinating moment. So TTBD.
[01:04:00] Luke: Just while we mention the Patreon, um, if you are on there and if you were a free member, apologies, we’ve now locked you out of all of the chats and you can’t see anything on the Patreon anymore. Like we wanted to support our free members, but sadly we had. Like within the space of a week two, um, OnlyFans, uh, attempts at like scamming our, um, our Patreons.
[01:04:25] Luke: So we’ve had to lock out free members. So you know, it’s gonna cost you three bucks to become a sloth and like sloths get access to see everything and chat. So, um, it’s all still there. And Monkey’s slide deck will be all there for you, um, for us. Lost and above I’m sure.
[01:04:43] Krys: All right. Badge. Yeah, we, we, we we’re getting more restrictive. We don’t want no monkey business
[01:04:49] Luke: Alright.
[01:04:50] Krys: except for your chief monkey. The chief monkey gets monkey around nobody else.
[01:04:55] Luke: Alright, so look, we did, uh, we did one tiny bit of good, we did three bads. Should we have a look at, um, one ugly, which is if you’re on the Patreon, you’ll be very familiar with the beautiful King of the Jungle portfolio spreadsheet that, um. Beaver built for us. You, this is, this is not pretty Christophe and uh, it’s just, it’s the consequences of being like, well, suffering like massive drawdowns in such a huge position.
[01:05:26] Luke: Um, You were so far ahead. Um, over the last one year, year two of King of the Jungle, you absolutely dominated the competition with something like a 360, 370% and return. And you streaked ahead of me in terms of your overall portfolio value, but this is pretty ugly.
[01:05:51] Luke: Look at what’s happened just in the last, well, since the start of this year, we are almost back to parity.
[01:05:58] Krys: And that’s one way of looking at it. Badge. Uh, I, I don’t like, I don’t like losing such a big lead, so that is ugly from that perspective. But if I wanna be take the other side of it is since Inception monkey still winning. So,
[01:06:17] Luke: Yeah,
[01:06:17] Krys: uh, so yeah, there’s some massive peaks and valleys here. And, and this is, you know, my strategy is not for the faint hearted for sure.
[01:06:26] Krys: That’s why we make a great team. You have the solid sort of. Sloping upline. I have the, the much more aggressive peaks and valleys at the moment. My strategy has so far been the objectively better one. But, uh, there is, how about we say this? There’s both good and ugly, all in the same chart.
[01:06:49] Luke: When you are, when you are following like the yellow banana line on. Like the stock chart like this, you know, your portfolio value, you’ve gotta have nerves of steel to basically operate a portfolio the way Christophe does. Um, and it won’t be suitable for everybody. And you’ll have those, you know, crazy years where you like four x your portfolio like you did in year two.
[01:07:13] Luke: And then you’re gonna, the, the, the counterside of that coin is when things go bad, they go bad. Much harder for you. ’cause it’s the nature of running like a much more volatile, high beater portfolio. And if you ain’t got nerves to steal, you kind of do it something like the Badger way where when things go up, you go up and when things go down, you go down.
[01:07:36] Luke: But you know, within a certain kind of range.
[01:07:40] Krys: Let’s wrap this episode up with something I put on the docket that really struck. Stuck with me all week long, and I actually talked to my students about this. I showed a clip of an interview with Alex Harold. He’s the guy that climbed Taipei 1 0 1 without a rope, and that wasn’t the most dangerous thing he’s ever done. But I began to reflect on what he says in the diary. It was an interview with the diary of a CEO, which is a terrific program if you haven’t seen it. He says, the crucial question is not how to climb without fear. That’s impossible, but how to deal with it when it creeps into your nerve endings. And his, his, what he was telling the host was, I’ve been doing this every single day, five days a week, or six days a week for my entire life, meaning I’ve been climbing in fear.
[01:08:42] Krys: For that long. So it’s not that my brain doesn’t have fear, it’s that I’ve learned what fear is and I’ve adapted, literally, my brain has adapted. So that, I mean like you do anything, right? You, you change and, and you, you, you kind of have a different relationship with that thing. I think because you and I have been doing this for so long, I’ve gone through these kinds of situations so many times. It’s not that I’m happy, it’s not that I don’t feel anger as I express to you or disappointment or delusion, but, but I think I hold fear. Uh, I don’t know if better is the word, but I’m capable of containing my own fear in a way that doesn’t lead me to either freak out. Or make impulsive decisions or say this investing thing’s not for me.
[01:09:46] Krys: I just know it more intimately, so I let it run through me more easily, and that might not be the case for everyone, but you know, you do something long enough and get better at it.
[01:09:58] Luke: Yeah. Yeah. Like it comes down to like, know thyself. If you know you can handle the swings, then uh, well, you demonstrated, yes, you are right. You’re still ahead. You know, you, maybe that is the more profitable course if you can handle the drawdowns, but you know, if you’re, if you take a risk that possibly prevents you taking future good risks in the future, I think that’s like a, probably a, some like mishmash of a Morgan Hausel quote.
[01:10:30] Luke: Then that’s, you know, that’s probably a bad thing to do. You don’t wanna get wiped out of the market, which could happen in two ways, right? You could, if you are using leverage and margin, you could get wiped out ’cause you go to zero and you’ve got no money left. But also you could get blasted out of the market because you take such a severe draw down in a short period of time.
[01:10:49] Luke: Like you said, you’re just like, this is rigged, this ain’t for me. And you step away from like an activity that if you get it right, will change your life over the long term. You just gotta find your own way.
[01:11:03] Krys: Yeah, and this is like, it’s not right. You don’t get rid of fear. We’re human, right? We’re gonna feel it. It’s not about volatility. It’s not about avoiding being wrong, we’re gonna be wrong. It’s like how do we develop a relationship to that fear? That act allows us to act reasonably in the face of it, rather than emotionally and irrationally and so forth.
[01:11:28] Krys: So that’s a subtle point, but most people should sit with that a little bit longer. Like move into the fear
[01:11:37] Luke: Yeah, it’s
[01:11:38] Luke: good.
[01:11:38] Krys: it.
[01:11:39] Luke: I really like the trajectory of our conversation today. I dunno if we lucked into this or it, just, we are just quiet geniuses and the way we structured the docket and changed it in real time, that’s quite an interesting journey. Looking at a couple of, you know, arguably with nuances, failed investments in both of our portfolios, and then navigating to.
[01:12:02] Luke: Like really our core disciplines around like managing your portfolio in a way that works for you and make and being resistant to the extent that you need to be resistant.
[01:12:15] Krys: Yeah. I, I, I love this conversation. Goodness. It was good therapy for me. I hope for our investors. It gave you, we actually have three really good investing ideas come out of this right now to, to reiterate. Eos, EOSE, oddity, ODD and Mercado Libre, MELI, are really, really fascinating opportunities. If you do your due diligence, take the time to explore why that might be the case and um, yeah, go, go, go start your work.
[01:12:52] Luke: Yeah. And, and look like your work. Could start very usefully with a tool like fiscal ai, which we are big fans of. And we saw, I showed a couple of fiscal AI graphics from the Cado Libre. I know you use it, uh, alongside tools like Trading View to look at
[01:13:10] Krys: Act actually badge. Sorry, I for, uh, I forgot. Sorry to interrupt you, but I did not allude to the oddity fiscal AI chart as I was talking about it, but I am going to include that, Uh, and then, um, I’ll also paste on the Patreon, but I did, I did wanna see, I did want to let our listeners see the basic numbers for Oddity Tech, which used fiscal AI and the awful chart that accompanies
[01:13:38] Luke: Yeah, look at that. Look at that red graphic. It’s just, it’s dropped off the bottom of the chart. What’s happened?
[01:13:47] Krys: So yes, physical ai, right? It’s, it’s a, yes.
[01:13:50] Luke: It is a great tool. Um, you can, you can get a healthy discount by going to fiscal.ai/wildlife, uh, where you’ll get two weeks free of Fiscal Pro, no credit card needed, and a 15% discount if you upgrade.
[01:14:05] Luke: Like it’s, it’s part of our essential investing toolkit. And hopefully when you look at your fiscal AI graphics for the companies you are interested in, they won’t be like red lines disappearing into the ground. There’ll be some green in there, but you know, investing is a lifetime long game. You can’t let one failed investment like wreck your plan.
[01:14:27] Krys: All right, badge. So if you’re ready to be a beast of investor, where does the journey start?
[01:14:33] Luke: Well, one of the places it starts is with the number 19 best investing podcast in the world right here.
[01:14:41] Krys: Sweet Rah.
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