YouSaid · the spoken record

Deiya Pernas

lines on the record: 50
first: 2025-09-05
most recent: 2025-09-05
sittings or episodes: 1
sources: podcast

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“Very happy to be here too. Thank you very much for the discussion. Anybody that wants to learn more about our business, visit us at PernasResearch.com. We produce actionable stock research for professional investors and RAs. So if anybody wants to take a look, that's where to go.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, just some of those advances on those techniques are unbelievable. Getting down to one nanometer or something, I mean, it's crazy. That level of technological advancement and that arena has been so impressive. So yeah, maybe I can help us there. I'm just very excited to see it.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“Think the real breakthrough in AI would be if it helps us solve something that we scientifically that we couldn't solve. I mean, really, if you look at the physical sciences, there hasn't really been a huge breakthrough unless since the turn of the century. So are there breakthroughs to be made and is AI able to do them? Is it AI more than just a regurgitation of data? And can it create something actually new? It's already done it in certain games where I talk about chess earlier or go where it's made a move that no human has ever seen. It almost doesn't make sense from a human perspective. Is that going to happen with something like science? It remains to be seen. And I think that that would be the next huge breakthrough. It just takes the human race to an unbelievable next level. So, I mean, is that going to happen 10 years? I have no idea, but that would be pretty exciting.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“I think a company that's using AI to facilitate manufacturing, industrial manufacturing, and that's gometry. And I think the more robotics and these prototypes, these short runs that produce these different types of robots to help facilitate any never-ending human needs, tristometry is going to be a huge beneficiary to that because they provide a platform that enables any sort of manufacturer to submit their cab designs. Through kind of an AI voting engine, pick the exact manufacturer to help them to produce these parts. So I think that the more robotics are being produced, given that a lot of these robotics are prototype, I think that fits very well in Zometry's Hange, which is really a leverage on digital manufacturing. So we're very excited. That'll be one I think that stands out in our portfolio.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“Best time to be alive to an investor? I mean, it's we're very, very fortunate, I think, especially just the changes in all these technologies. Now it's going to impact our lives. You know, I'm very, very excited for the future. But yeah, those are just some applications that I think are going to have some serious relevance for all of us in future.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“A little bit to defense. I think there's applications in energy. If you look at data centers at the end of 2025, about 2% of the electricity being used is going to be used by data centers. So that has a lot of questions for the grid and alternate power sources. And there's a lot of companies that are positioning themselves to provide alternate sources of electricity for data centers. And then there's nuclear that hasn't made the headway that I think a lot of hoped, but that might be in the discussion more and more later. So there's a lot happening in energy that's really, really interesting. Biotech, we haven't dove into quite as much as we like to yet, just the speed of drug discovery and using AI to iterate on how different molecules are binding together and just speeding up drug discovery, I think, is going to be very, very interesting. So there's so many ethic applications that from an investor's perspective, I was just”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“I think there are a lot of areas. There's robotics is one that comes to mind. We basically have the hardware for robotics, but we don't have the brain yet. And I think there's rapid progress being made there. It's quite similar to how they trained models to play like chess or Go, where it was basically unsupervised. You give it the rules of the game, and then it just plays itself trillions of times and comes up with these really, I think, unique ideas. It knows how to play things very, very efficiently. It's similar to what's happening in Robonus right now. They're testing them through simulations. They're using physical sciences to provide just the rules framework around that simulated reality. And they're optimizing for a certain outcome. And then it's running that simulation trillions of times. So I think that brain is coming and we're going to combine that with the hardware. That's going to have a massive impact. And it's going to be, I think, a very, very exciting future.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“Being made. And with Restrictive Meta, they're using AI to make their ads better. It's already helped increase their top line. So that's probably the out of all the hyperscalers, I think the best example of how that's improved, their return on investment, where it's actually helping businesses just give us the criteria, what kind of ads you want to make. We'll use AI to test 100 different versions and see which one gives you a better return on ad spend. So that's been enormously beneficial for meta. And for most of these hyperscalers, they're revenue employees increased dramatically. You just need less developers to produce the amount of work you do. And obviously they're all trading, they're all models. And it's having an impact already. Whether or not how something like Microsoft, how that's going to affect their top line or how that's going to help them increase revenues, that has, I think, that for me to be seen. But you're already starting to see mass efficiency improvements for all of them.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I think that it does seem to be a bit of an arm race at the moment. And I can understand how investors might think there's a lot of capital destruction going on. And I'm sure not every dollar is going to be spent as efficiently. That being said, if you look at maybe meta's clear example of this, where you alluded to in 2022, we took position and there was all certain people thought TikTok was going to eat Meta's lunch and Zuckerberg was going crazy investing in VR. And there was that Apple data change that also affected things. So just a confluence of we think narratives that promoted selling, promoted just that rapid price client. But then you could also see that, you know, Meta's response to the competitive TikTok pressures were reels started to massively increase active users' engagement. And it was clear that, hey, they're responding to whatever the market thinks this threat is. And there's actually evidence you can actually see the progress.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“Investment going on, it's kind of important to ask who might be the beneficiaries there? Are there any companies that are taking advantage of this? And we've had a lot of success with especially smaller companies that have been pivoting towards providing some solutions for some of these bigger data centers given their energy needs and so on. So I think that you want to know how the world's changing. It's having such a massive impact on how everything's changing. You want to try to understand how things are changing. Whether or not it has any direct investment implications is an investor who always wanted to know how your world's changing. And we tend to be more attracted to dynamism. We like it when there's a little bit of complexity or people may not know how things are going to there's a bit of a fun war situation. We like to try to analyze to be in that area and do some analysis there. And a lot of times you're not going to be able to gain a full understanding and that's fine. But I just think that they're”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I think that part of it is existential of sorts. It's affecting so many industries. You want to know how it's going to affect you. Similar to like, if you were an employee somewhere, you probably want to start learning about AI and how it might affect things or how it might help you and so on. So part of it is just understanding the gravity of the moment and understanding just how huge of a general purpose technology AI was or is. So this is also true if you look back. I remember reading some transcripts from like 1999. It was Coca-Cola who asked, what is Coca-Cola know about the internet in 1999? But they were even talking about like, here's how we're going to leverage the internet to improve our marketing efforts and so on. So you can't avoid it. Every company is talking about how it's affecting them or, you know, how they're trying to reposition XYZ or so on. The latest set on the hyperscalers is close to half a trillion has been invested in training models and data centers and so on. Anytime you have that level,”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“With Romilly is not the same. Anyway, maybe that was a bit technical. But the whole part of it is that Wise is doing heavy lifting to build out actual piping infrastructure, which I think is very, very useful and can leverage them to a very, very large market if it continue to make progress. So the upside with WISE is quite large. That being said, you do have regulatory obstacles.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“They're like, hey, we want to reduce the amount of intermediaries. We don't want any intermediaries. We want to plug into their bank system directly. And then that way we can cut out all sorts of costs and stuff, which I think is great has worked in some corridors. But getting that regulatory approval is very, very difficult in others. They've already done a whole lot of work and they've already had a whole lot of integrations. There's just a long way to go, which is also one of the reasons why remittlely sends to maybe, I think around 170 countries and why is this, you know, less than half of that or so as far as the different countries you can send to. That being said, I think WISE is very, very interesting. Wise doesn't have anything to do with the visa network or remilli their structure is really built on the visa network. And their migrants send money using their debit card and where WISE tries to influence you not to use your debit. Wise is bad for something like a visa because WISE continues to grow and grow and grow. Core networks will feel a bit left out where”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“Over 10x that for as far as their median send to math. So they're completely different businesses. And anybody who's used the WISE app and the Millie app can understand how different they are. WISE almost feels like a Neobank compared to the Romilly app. The Remilli app is just remittance. You have a contact center that's very, very easy to send, totally optimized for that space. But I do think WISE is doing something very interesting. The potential there is quite large. The challenge for WISE is that instead of being more intermediary heavy, like for Midly, where Mittley can go anywhere and pretty much just very quickly find the right intermediaries and set up a corridor for people to send start marketing to people who associate with that corridor and get the ball rolling, where WISE takes some more heavy lifting with respect to integration into countries' local rails, you need a certain membership. You need certain licenses to be able to be a remittance player.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I think Wise is a very interesting company. A lot of people think it's a competitor or Milly, but they play in a much bigger space. If you look at just payments in general or just cross-border money movement, remittance is just a small part of that. You have businesses paying businesses. You have banks sending a lot of money. The space is 50 trillion or so. And then you have remittances that are right around a trillion or other measures cited at two or so on. So why is these not optimized for the migrant remittance TAM? It's optimizing for another TAM that is much bigger, which is businesses paying overseas suppliers or neo-banks having to send money around that don't want to go through correspondent banking. So it's really focused on a much bigger markets. And that's why it send amounts are so much higher. It's medium send amounts where we're male us right about 300 or so and you have Ys that is significantly.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“Overpaying, and if you're right about the future of remittle and their growth profile, you're getting it in an extraordinarily attractive valuation today. So yeah, it's really that simple. This asset should be trading and north of 5x sales and it's trading right around 3. So that's kind of how we look at it.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, it's training under three times revenue. And I think that it's a company that has really not reached its potential profitability-wise. There's so much growth ahead of it that you would almost feel fine if they continue to reinvestigate when trying to build out growth for the future and so on, which is what they're doing. They're not really pulling the profit lever as much as they can. But even in that situation, yeah, you have forward PE of close to 20, you have revenue multiple of under 3x. So I think that from a valuation perspective, if you say that, hey, this company's going to continue to grow revenue for 30% plus over the next several years, given their growth profile, I don't know how many stocks out there are trading at a similar valuation. If you just look at that cohort, I would say they're pretty much going to be top decile as far as from a valuation perspective. So, you know, valuation is clearly important. You want to make sure you're not.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, absolutely. You have this giant Western unit. Their payment volume is about $120 billion or so. We're midly run rates around 80 or so. So you have this giant player in the space that's given just very steadily continue to see share. They've had to make an acquisition recently of a regional player just so they can kind of show boost the revenue inorganically. But yeah, they're going to continue to see share and remittanely is the direct beneficiary. You have tailwinds, you have a huge player in the space that is just going to be consistently seeding share. You have just a better product. I just think there's a whole host of reasons to just to be really bullish over the long term. So like I have no idea what the stock's going to do in the short term. But yeah, I think the fundamentals and their ability to create just robust revenue growth is going to continue for structural reasons.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“So, like, once you start thinking about all complexity, it makes you realize that for at least focus is very, very special. I think another example that really spells out just how complex it is is that PayPal in his 2015 or 2016 ended up buying Zoom XOOM for about a billion dollars. And as part of their foray into remittances. And it was like, okay, the Zoom's growing with leaps and bounds. And it's going to help us to plan other remittance providers in the space. And what happens after they acquire Zoom is, you know, a couple years later, they totally stop mentioning it. Their growth has been anemic. It's a total nothing burger. They're trying to sell it that they can't. So clearly, if this business is that easy, Zoom would not have been so disastrous of an acquisition for PayPal. But, you know, there's something more there, obviously.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“Hesimitha competitor to do it as well as AM, you know, not even close. So to me, it's similar as remittance providers where it seems like it'd be easy, but when you peel back the curtain a little bit, you realize how just how complex certain quarters can be, the makeup of certain receivers. You obviously have to have a cash distribution network. You have to maybe disperse money to wallets or maybe have some sort of way to deliver money through just mobile payment or through even on-demand or in the Philippines or something. You can send money at a courier or go to somebody's house and deliver the money. So like being able to optimize for just the different ways people receive money in these different corridors is quite challenging. Obviously there's the regulatory, the intermediaries you have to have and licenses and so on. And then there's fraud, prevention, and all sorts of KYC stuff that needs to be correct and totally boarded at all times.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“When there is a business that is more complex than it actually is, and people think that it's a commoditizable business and you know that it's not. I think that's a source of area of perception. And I brought up the example of in and out in California, which is a burger chain. And from my perspective, and obviously there's some subjectivity to this, but I know there's a lot of Californians that agree with me. There is almost no other burger chain that has been able to produce a quality burger for as long as In and Outhouse. Just bar none. I mean, there's a couple that came up. I think, you know, had their Smash Burger or even Shake Shack, but the quality is not been consistent over time. So here's something that should be like the easiest business world. It's like, oh, you're producing a burger. But clearly, it's a lot more complicated than just a cursory clan would tell you. And I don't know anything about the burger business, but I know that it has to be complicated because there are”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“Yes, I think just when it comes to financial services in general, banks, if you agree that banks, it's very important for banks to build trust, then why can't a remains provider? I mean, it's very much the same. Somebody walks into their bank, they want to feel secure, their money is safe, and it's the same exact thing with a remittance provider. They want to have that trust. And the brand is extraordinarily important. So I think there's a lot of people who will try to say, well, oh, remittance providers is kind of a commodity or a race to the bottom. But any sort of finance company that's B2C, that trust element is going to be huge. People want to feel secure about their money. So if that brand, if that mindshare or that customer, if those emotions are of that of trust and security and we're going to do whatever we can, bend over backwards customer service-wise to make sure that your money gets repointed at any point. Yeah, I think that goes a long way. I think it's very interesting.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“And we would hate to say we were ever wedded to a name. But if there's any name in our portfolio that we think we're going to be holding for a very, very long time, it's Romille. I just think the economics are going to work really, really well.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“AREA, and even some of the regional players. And on end, there's WISA. It kind of is in that space a little bit, not exactly. Their product is solely optimized for remittances and it's digitally native compared to a lot of the legacy competition that is still sending cash and that cash is starting to, that's another trend where a lot of the cross-border ministers being sent are cash to cash. So you still have over a hundred billion or so that Western Union Money Gram sends that's in cash. And that cash is going digital and remittanly is going to be another beneficiary there. So there's a couple trends that we really, really like. They have the best digital solution. It's totally optimized towards migrants. They're doing a lot to build mindshare with migrants. Their marketing engine is really second to none. We don't have many holds in our portfolio that we think are generational holds.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“That dynamic, the only way to stop a population decline is through immigration. There is no other way. So unless you're saying that developed economies are going to let their kind of hold demographics go upside down and have all sorts of issues supporting retirees, immigration is going to continue in mass. And that's why you're seeing global remittances continue to grow by five, six percent every year. And it's now outstripped foreign direct investment when it comes to emerging markets. So that is a megatrend that is going to continue to persist and something that we really like, obviously, when looking at business that operate within that ecosystem. And remittle has the best in class digital solution and their ability, I think, to compete with legacy players and their focus purely on their mitten space, I think, just gives them an edge. When you look at the other players involved in the space that are pure remittance providers like Money Ram, Western...”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so I think regarding tailwinds and triads and why remittance is continue to increase and the numbers closer to trillion out, why the number continues to increase. If you look at just demographics, I know there's the political climate has quite charged, there's been a rise in nationalism as far as immigration tends to be a topic on the top of every politician's list and trying to quote unquote limit immigration. But if you look at median ages for a lot of the developed economies, Japan, Italy, Germany, I mean, Germany, the median age is 46. Italy is closer to 48, 49. And even US is 39. It's not exactly young economies. And the fertility rate other than US and most of the economies that I mentioned are significantly below the replacement rate. So once you have...”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“Switch to a new payment method. So I just don't see that changing anytime soon when it comes to payments or remittances. I think it's going to stay in the crypto space for a considerable amount of time.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“We believe that traditional remittance providers are still going to be completely relevant just as they were in the past. And those are the services that are going to be used to transfer money. So we don't think the remittances will be the first to be affected. We think just paying the methods will. And it'll start to show up as an alternative payment method, much like you can go in and kind of use Denmo to pay for something that your Walmart or your CBS or something like that. You're going to see that, oh, okay, maybe I can use my stablecoin to pay for something. And then I think that's where it'll start. And once that penetration starts to happen, then we can start to talk about maybe how it's going to impact remittances. But I think we're a very, very long way off. And if you look at just how sticky payment methods tend to be, like historically, payment methods, even if they're not exactly optimal, tend to stay intact for a very, very long time. So it tends to require quite a sense of urgency for people to.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“People are using stable companies to pay each other. There's a few countries in Africa like that. But other than that, there really hasn't been any penetration at all. I'm not saying there's not going to be, but the market seems to think that remittances are going to be the first to be affected. Remittances being people sending money to others typically across, and when I say remittances, I'm talking about cross-border remittances because they tend to be more extensive. But that hasn't happened at all yet. And I personally think that you're going to see stablecoins as an alternative payment method first before you see it in remittances, primarily because the cost of remittances have come down significantly. And as long as people are continuing to use fiat in their local economy, it's hard for me to suspect given the cost of remittances that people are going to start using other methods to send money to friends and family or whatnot. So until that friends and family start using maybe save ones to pay for things that local economy”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I think stablecoins right now are really the domain of the crypto world. And if you look at the usage, it's overwhelmingly people who are buying crypto and it just facilitates it a lot easier on exchanges and being able to hold your money in stablecoin and then trading for crypto and then going back on a stablecoin and so on. And the US government, I think, is, through the Genius Act is going a long way to regulating those reserves to give investors confidence in something like a circle that those reserves are intact. And obviously that benefits US government because it creates a sustained demand for treasuries, which those reserves are placed in. So it's in the interest of the government to provide this type of regulatory framework. But if you look at the data, there's limited use of stablecoins in the real economy. It really hasn't happened at all yet. There's some situations in some frontier markets where just the banking system is totally rupturing.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“You find the right kind of payment company. Like, you know, if he's caught stripe early, for instance, or agging early or something like that, it can be enormously profitable. There's a few payment companies we like, but that's really the broad strokes of it, is that, look, there's going to be more and more money this out there. And if there's companies, there's a company's leveraged just a little bit of that. It can be enormously beneficial, especially since that incremental investment when it comes to a payment company. the cost needed to support an extra unit of revenue growth is very, very, very low. So it scales wonderfully and the tailwinds are amazing. So it's one of the reasons why we like paying. Obviously, there's a lot of them. Some of them are decent. Most of them are not. But that's the whole kind of gist about why we find payments interesting.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“So, I like the idea of, and just part of our overall strategy, we like to see the just tailwinds for a certain business. And it's better when the tailwinds are entirely obvious. But our most ideal situation is we find a business that's a share gainer and there's certain tailwinds in place. So with payments, you have this extraordinary tailwind, which is just M2 growth. Central banks are going to tend to print more and more money, even at a recession recently M2 growth fall off. There's a whole lot central banks have learned to do since 2008 to stimulate to print and that N2 growth is going to just pick back up. But if it doesn't, just like they did during COVID, they'll just start handing people money. So you can be pretty convicted over just from the historical record that M2 growth is going to continue. So if you have a company that has like a scrape on M2 growth, that's obviously very attractive given their take rates can remain stable.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“Any business that creates waste that needs that waste taken to a landville or accomplished facility, this trash company would assist them in their needs there. It was you taking longer for their customers to pay them. They had accumulated debt because they're rolling up these other waste haulers and it just, it seemed like they run into liquidity issues kind of where they're headed. This was a company that if we had seen their terms with customers starting to get better, maybe it's possible that we could take a position. But there's just too many headwinds along with the debt they have service and not being able to have that liquidity buffer from negative working capital.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“It's not necessarily they would be high working capital needs. And in Koch's situation, obviously high working capital needs is not indicative that they have a lower mode or anything. It's just the nature of that business. So you have to take a nuanced view. And I think that's more about how the working capital is changing. So if for whatever reason they have to pay their suppliers sooner or their customers are starting to pay them later, that's something that should raise an eyebrow and you should be asking a lot of questions as to why that's the case. So for us, it's just something to be cognizant of. And if it starts changing, it can absolutely affect whether or not you invest in it. Like we just looked at, I'm not going to name the ticker, but it seemed like their DSOs were increasing, their customers are taking longer to pay them. And they didn't really release customer concentration information. And this is a smaller company where they essentially roll up waist haulers.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“You know, they're going to need more days on hand of inventory, which is a drag on free cash flow because they need more cash to support a unit of revenue. And if that never gets fixed, or if that never becomes more efficient, then that's going to decrease from your future free cash flow. Obviously, everybody here agrees that the value of any business is its future cash discounted present value. And that cash is no longer free to discount to present value. You need to take a discount on that. So it's just, I think it's very, very useful, especially when dealing with small names or when dealing with structural changes in inventory or relationships with suppliers and so on. So it's something we spend a lot of time looking at smaller names because there tends to be more just incidentally there's more smaller chap names than they are larger cap names. Generally always trying to be focused on a company that's growing. So their liquidity now, they're able to finance that growth is exceedingly important.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“Name that's trying to grow. Because when a small cap name is trying to grow, cash is like oxygen. It's not like a larger companies that have many levers to pull and they can finance things in all sorts of ways. You want to have confidence that they can remove maybe or probably finance their growth internally. And a big part of that is if they have negative networking capital. So if their customers are paying them ahead of time or they have really good terms with their suppliers or maybe that those metrics particularly aren't great, but they're getting better, then they're going to have a little bit more liquidity to help them grow. On the other side of that, you can have a company, and this happened during COVID, where a company needs inventory as part of their working capital to support their revenue. And when supply chains are very, very efficient, they don't need, they can have just in time inventory. They don't need that much inventory to support a unit of revenue growth. But once things get a little murkier or geopolitically, things get fractured.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I think working capital is one of those things. There's the accounting definition of working capital. Current S minus current liabilities. That's not really what is relevant. You have to strip out non-operating accounts from there. So if when we're talking about a working capital for business, we're talking about intuitively. We don't care about current debt or cash or cash equivalents. Unless you're a finance company and you need cash or cash equivalents to support revenue. But when we're talking about it, it's purely the amount of money in a business that needs to be tied up to support a unit of revenue. And it's going to be different for different businesses. So maybe in some businesses, you need customer service agents to support revenue. Without them, you will lose revenue. So that should be part of your working capital. So for us, it's really, really important, I think, working capital. I think especially depending on the life cycle of the business, if you're somebody who looked at small cap names often, working capital is especially relevant when you have a smaller capital.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“Individual stock levels, a stock that we think is quite interesting sells off with extreme rapidity for whatever reason we don't have cash. So being able to tactically deploy that cash very aggressively, which I think has to be part of your repertoire if you are somebody that does carry cash, you don't want to be in a situation where it's structural. It's like, oh, okay, well, they have maybe 30% of cash on Tuesday, then Friday something happens and now they're at 5% cash. That's how we think about cash. It's very aggressive or very defensive. I think it's an amplifier of returns, at least the way that we've used it.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“Think there's a few things that is terrible from a portfolio management perspective as there being opportunities out there in the marketplace and you're not having the cash in order to take advantage of them. So and we never want to be in a position where we have to sell a position. It's in the portfolio because we like it. We don't want to be in position to have to sell it to buy something else we like more. We think that makes the calculus more complex than it needs to. So we tend to have cash. We idle at around 15% cash. And at the end of the day, the prevailing wisdom is that cash is a drag on performance because as you said, markets kind of, you know, they go up over time. So the other side of that is that if you don't have cash, you can't take advantage of opportunities when they present themselves. So that's also an opportunity cost that I think gets lost. So we never want to be in a situation where markets are a little fragile. There tends to be enormous volatility at any time.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“And me variance optimization. I think that stuff is kind of useful to maybe understand a little bit on an intellectual level. But at the end of the day, you really have to understand exactly what risk means in your portfolio. It's not volatility. It's something else and try to structure your own portfolio management strategy.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“You should probably size smaller, no matter what the upside is, where I'm not sure if that's very intuitive to investors. Investors typically look at the upside and like, oh my God, this they keep, whatever. Go up a thousand percent. Let me try to load up in this position where it's the exact opposite mentality that you should use. It's like no matter what the upside is, if the downside is severe, then you should size down. I think just that key is just instrumental to anybody's ability to manage portfolio. Since we run a concentrated strategy portfolio, a methodology is going to be a little different than some of you guys, like maybe 100 different positions. I think averaging up becomes a lot more important than that kind of strategy where for us, initial sizing is extraordinarily important, where it maybe it's not really that important for somebody who takes kind of an equal weighted 100 names or something in their portfolio. So I think there's a lot to portfolio management. There's a lot in the curriculum that I think is very misleading with respect to modern portfolio theory.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“Came from, and you know, they'll often be there's a bit of a power law there, there'll be a few names that kind of really help things along. We tend to have somewhat higher turnover a portolio. We tend to run a concentrated strategy where we have our core positions, which will be weighted around 5-15%. Then we have our start positions, which are positions which we would like to make a core, but maybe speed is more of the essence there than deep dive research. And sometimes we kind of just have to take a position when you're in the fourth inning of research. So these are names where they have the potential to graduate to a larger position. And then we have speculative positions where their downside is more severe, but they have significant upside potential. And, you know, Kelly criterion, which is one of the tools that gamblers use is very, very, I think, very, very relevant when it comes to portfolio management. And what the Kelly Kretch airon tells you is anytime you have a situation where there's 100% downside.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“Yes, you said it perfectly. It was from my poker days. You can be the best poker player in the world. And poker they call it bankroll management and portfolio management, but you can be the best poker player in the world. But if you have poor bank role management, you're just always going to be broke. You have to be able to have the right bankroll management. And that's part of being a professional poker player. It's very, very similar when it comes to investing. You need the best stock picker in the world, but your returns can be abysmal because you're speculating too much on the wrong name or you're sizing things incorrectly or you just don't really understand how to size, when to add, when to trim, when to have dry powder in the portfolio, when to have cash, when to be fully invested, and when to be a bit more defensive. And all those things are massive drivers of your chart. And especially if you look at just kind of, you just deconstruct your portfolio jurns contribution-wise and see, okay, where have my returns?”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“And I think that it's not that intuitive for investors to think that way. I guarantee most investors you talk to are going to look at the chart and assume that the trends will continue. But for all types of reasons, like maybe the company's writing at a trend that's coming to an end, or maybe they've overhired salespeople and overhired or overspent marketing efforts and marketing expenses are going to change in the future. And as a result of that, they've seen improving fundamentals. You know, maybe it's a company that or like a platform company that's raised its take rate a little too high just continue to bump it up aggressively and it's kind of reaching a plateau and that over monetization is long on the tooth or maybe it's a company that's just mortgages featured in some respect. I mean, there's an infinite number of ways why historical business performance may not continue. So that was really a big epiphany for us is realizing there's no correlation. Okay, if there's no correlation.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“Once you bolt on many other ideas and understandings, can give you a basis for prediction what the business will look like. The point, the takeaway is this. Financial trends themselves should never serve as a sole basis for prediction.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“Grew earnings at X amount of the past five years, or they grew revenue at this. And, oh, their peg ratio is whatever it is. And I think it's a good stock because specs, Y, Z reasons. But the foundation to their thesis is that, hey, because they grew earnings, it's reasonable to assume that they'll continue to grow earnings of the future or continue to grow revenue in the future. If you look at the data, it's just not true. The correlation is very, very low. So once you realize that there's no real pattern in past financials for business that is a good predictor of future financials, then it's like, okay, well, why are past financials useful to look at? Why are the trends, the trends in past financials useful to look at? And I think that for us, it's useful, but just in terms of building context, like, okay, well, what happened when revenue did this and management, how did they respond, looking at financial trends can give you an idea of where a company is in its life cycle. And this can kind of help you build context.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“You agree, like we do, like you just said that investing is about prediction of sorts, then you have to ask yourself, okay, then what data do I look at that actually has signal? And you had mentioned stock returns, and stock returns actually, it is well documented, do exhibit a momentum effect. So actually, from my perspective, it makes a lot more sense to try to extrapolate just based on stock returns than it does based on financials. If you look at financials, financials, and the data is clear on this, they do not exhibit momentum effect. So if you just take a look at all data mine right now, look at all companies that have grown the red minute by 5% over the last five years. And then you try to say that, is there a correlation between how they grew revenue over the last five years versus the next five years? And the correlation of that is very, very low. So that was a big epiphany for us as investors because I think investors, and it's almost everybody I talk to, it's like, hey,”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“What's generating the financials and what the financials look like and what the actual key, the motor of the company, what's actually kind of building up that potential energy, so to speak, those two things can be divergent for quite a period of time. And we can get a plenty of examples why a business might be strengthening the motor strengthening and the speak we use, but the financials may not look great for whatever reason. And we don't look at traditional metrics equality like anybody else, and we can get into our take on extrapolation, metaversion, and so on and our critiques on that. But hopefully just that gives you a general idea.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“Everybody thinks it's a great company, but I think it's going to be a generational company, and nobody really has similar perspectives as I do. So that's what we kind of qualify as variant. When my brother and I, my business partner, when we're talking about companies, how in the terminology we use to get our focus in the right place is, and we tell ourselves all the time, we will say this to each other all the time, is the motor of the business strengthening. And when you say motor, like people automatically think of something under the hood that's actually the true driver of motion. And it's the same intuition when it comes to businesses. Is that motor actually strengthening? Is what's driving that value to customers? What's driving their ability to gain future customers? Is that getting better? Regardless of what the actual financials look like currently. So it's not about the current financials. It's about the health.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT
“Simplify things down, we really look for two things. We look for companies where their future state is going to be brighter than their current state. So it's all about the future relative to the current state. We believe investing is about predictions. It's about anticipating the future. I don't think it does anybody any good to just try to get an understanding of the present and the current state without having some reason to try to conceptualize what that business is going to look like going forward. So that's the first criteria. The future state better than the current state, and I'll get into what we mean by better. And the second pillar is that your view of what that company is going to look like in the future has to be variant than the broader market. It doesn't necessarily have to be contrarian. It can just, you know, just be variant. Whether it's, hey, I think this company doesn't look that great today and it's going to look slightly better tomorrow. Or I think, yeah, this is a great company.”
2025-09-05 · We Study Billionaires · TIP750: Generating Alpha, Digital Payments, & AI w/ Deiya Pernas · IDENTIFIED FROM THE TRANSCRIPT