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Pierre-Olivier Langevin

lines on the record: 60
first: 2024-08-02
most recent: 2024-08-02
sittings or episodes: 1
sources: podcast

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“Well, thanks to that, Clay, for having me. If people want to reach us, they can go on our website. It's gpsmedici.ca. We've got a light English version, but since, you know, the vast majority of our clients speak French, there would be an enhance version with lots of media content in French. But the translators are pretty efficient today. So I guess any curious investors would be well advised to go on that section of the website. You can subscribe to our newsletter and we're able to serve investors residing in most major Canadian provinces.”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“Decisions, but having a few stocks like these ones that are more stable can help you remain calm in that kind of environment. So having a notoriety in the portfolio is great to have”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“Stores opening, but that's not what's happening with O'Reilly. They keep opening stores even though it seems mature and the return is still good. So even though the pie is not growing, well, they're just able to steal market share. And we see it. If you read the cause, you listen to the management, you ask them questions, they're clearly gaining shares. And so I guess we like the fact also that it's anti-cyclical. If there's a major recession coming tomorrow, yes, maybe the first month people will freeze and OriD will get bad results for that given quarter. But they're probably the first one to get back because people just stop purchasing new cars and repairing their older cars. And the direct beneficiary of that. And so we want to be fundamental investor. We want to remain calm when there's stuff happening in the economy and be able to make good.”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“And want to repair their cars by themselves. Not so much for the technician industry, so the do-it-for-meat industry. And if they want to win with that, they have major distribution work to do. And that would cost a lot. They'll probably do it, but they would need, I guess, at least five years to maybe narrow the gap with O'Reilly. And so seeing that mode is great, but again, circling back to what I said previously, we could have thought that the pie isn't growing. There are so many auto stores in the US and there's not any more growth. But if you got a really greater ability to win versus your competitors, what it ends up doing is your displacing competitors. So you can keep opening your stores. Your payback is ongoing down much. And if you see it going down, you can slow down on”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“Now, you're not willing to shop and see at two or three different places where would be the best price. You just want to get on with your life. And the same thing for the repair men, the technician, he wants to turn his base and he's passing the price of parts to the end user, the driver. And so if he can get the parts quickly, he would turn his base faster. And generally speaking, the technicians that repair cars, if they turn their base quickly, they will end up having better salary and better bonus than if they're not. So having the good partner that can deliver to you quickly is critical. And if you think about, for example, auto zone, which is probably the best pier since by numbers, they get great results too. Their distribution has been planned for do-it-yourself. So the people that own car”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“Well, there are three or four dominant players in the US. There's NAPA, there's advanced auto parts, Otozone, and O'Reilly. And already how they laid out their distribution is many of their DCs are really close to bigger cities. And it's been more expensive to build them that way. But what we get from that is they are able to deliver in a much more frequent way than even the other big players. And again, those big players that I just named up, they are about 50% of the market. And so they're displacing regional players. And what's great about that business is many retailers, you need to have the best price to win. RID and the industry of aftermarket automotive part, you want to get on with your life when your car has a problem. And if the parts are available right now,”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“Because both businesses are getting their profits from advertising, digital advertising. So it's a way to mitigate risk and most of our digital advertising dollars in Meta for that reason.”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“And I will definitely, like I said previously, get their fair share of search, but they will be maybe a oligopoly and passing from a monopoly to a oligopoly, yeah, it's still, even though it's quite good, it's still a downgrade from your previous state. And so there could be a multiple contraction. And if you think about everything else Google does, pretty much everything they does outside from search is having less margins. And so we could also expect margin contraction. So what we do at Medici, we would really make sure to bake in margin contraction and not rely too much on multiple expansion in order to figure out if we're willing to own it or not. And as of today, it is still the case. But as we go further down the road, it might not. We try not to hold too many alphabet Google and Meta at the same time.”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“E commerce has a percentage of retail sales in the US went from 10% to 16% over the five last years. And it's pretty much the same trend in the rest of the world. And this is growing i single digits and so if you can keep your moat and get that growth, you could have quite good results. So we think Amazon is going to win in terms of e-commerce. Alphabet Google, they're probably the greatest business in modern history right now. They're a tool bridge on the internet search queries. They're a monopoly, even though they might not want to say that publicly. They're so powerful, but the regulators are both ends on the search business. They're going through massive litigation, antitrust authorities in the US and the EU are on their back. The search and Google network is about two-thirds of their revenue.”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“That's probably the hardest question that you're gonna ask me today. Super hard to figure out. They're all highly powerful, dominant businesses. We feel like Meta and Amazon are pretty close to each other in terms of longer-term future growth. And Alphabet is probably on the third rank, although it's really a great business. So starting with Amazon, they own the rails of e-commerce. And they have the ability to be the most convenient player. And for anyone who would want to be as convenient, as quick on delivery, and at the lowest cost, there's many billion dollars separating them from that. And so I guess they would probably be still dominant in e-commerce in 10 years. And e-commerce is still growing and taking shares from traditional retail commerce.”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“And still being at the elm, by the way, because the skills you need at 20 years old to build from scratch a company and the skills to operate a company with many tens of thousand employees, wow, that's not the same thing. It's quite different.”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“Award for its capacity to react, and he's probably not even at its prime. He's proven also that he's trying to make profits. You could be a good visionary and adapt to change, but not make a profit and you have to adjust all this and that on the income statement, he's not in that business. If he hired too much, he would lay off people. And the main reason that was cited as for nimbleness, again, that capacity to react to change, having less staff on board and the capacity to buy back shares, not everyone is able to seize that opportunity when the stock is going down and he reacted quickly. So I guess as long as Zuckerberg is in control, we'll be fine.”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“Foam, but clearly Apple has taken on that market and Apple is wise enough to not cannibalize its own phone and they made it an additional tool that you might want to use, but concurrently with the iPhone or jointly with the iPhone, I should say. If you think about Mark Zuckerberg, he's 40 years old. He should already get an award for its proven capacity to react to change. All the shifts that we talked about, desktop to mobile, text to pictures, to stories, to short form video, the political turmoil, the election integrity, those were massive crises and they had to invest in security in a major way. The fight with Apple's privacy change and today with recommended content is even stronger than before with the cookies and the tracking technologies. He already gets a huge”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“It might not even happen within the next 10 years. So riskier, lower occurrence. And for us, it's still unclear what's going to disrupt the mobile phone. The glasses, the mixed reality headset, there are still engineering issues. The expert that we've consulted on that is the battery packs, the size, the heat that's on your face, the weight on your head, the fact that it's ID immersive and it's big. They'll probably figure it out someday, but they don't have the solutions right now for all those challenges. So the change in the form factor might not be coming over the next three, four, five years. It might take a little longer. And apart from gamers, it's still unclear what are the great use case of having this immersive experience with Quest or the Vision Pro. Maybe some people thought that the watch could eventually disrupt the”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“It's not an easy question. There's two major forms of change that we The first one is new forms of content, and we've seen it historically, switching from text-based status to stories. Stories to short form videos. So I think we've got a great track record from Mark Zuckerberg and his team that they have the assets and the capabilities to ride on those change. And especially with those CapEx that we've talked about, they have many computing power that allows them to be able to be in front of the next change that will happen. And those change might happen two or three times over the next decade. And we're pretty confident on how metas will adapt to it. The other form is really the form factor. So for example, switching from desktop to mobile. That was a form factor. It doesn't happen every time.”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“Facebook Reality Labs that are going to be useful and some other stuff probably it will be a write-off. We'll see, but it's not all black and white.”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“It will work or it won't. But it's not a single project. There's the uptick or neural command systems. So how do you communicate with your device using not your voice, no keyboard, and maybe a wristband? Okay, that's what they are likely going to do. There's the AI investments and it's already contributing to the core business. And AI investments was originally from Facebook Reality Labs. There's Horizon, the social media, you know, immersive social media. The augmented reality device such as the Rayband Blasses, they're selling it out. I mean, they're quite popular. And the immersive experience inside of businesses, if you want to meet people, you're a multinational, you want to meet with your partners, but they're at the other end of the world and you don't want to travel by plane. Well, they have a partnership with Microsoft for that. So there's some stuff within Facebook.”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“Within that period, maybe his timing wasn't perfect. The average price he paid for those buybacks were probably quite interesting. And so those elevated capex, they are totally fungible. Most of that is servers and computing power. They'll be able to train much bigger AI models, recommendation systems, upcoming AI tools that they would want to create, they'll have the capacity to do that. If it doesn't pan out, they could improve safety, they could monetize threads faster, they could create new tools for advertisers. So I don't think in our era it's a sin to have more computing capacity than required. It's probably a great assets to have today in our technological era. And maybe the last point I want to touch on for that question is the metaverse. So many people see the metaverse or Facebook reality labs as”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“Really nice business, even with all those spendings. I think I'll have to quote Zuckerberg on the Q4 2023 said, we're still well positioned now because of the lessons that we've learned from Reels. And I decided that we should build enough capacity to support both Reels and another real-sized AI service that we expected to emerge. So we wouldn't be in that situation again. And at the time, the decision was somewhat controversial and we faced a lot of questions on CAP spending. So those elevated CAPX that we've seen over the last two or three years may have went from playing defense to playing offense in two short years. That's amazing. And it wouldn't have been possible without all those capex. And Zuckerberg, he works both on the long and the short term. He's been buying back 63 billion dollars worth of stocks.”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“Instagram is still growing. You see it in court filings. We have had the numbers from Instagram. It's 30% of their revenue base and it's growing mid-teens even in the 20s. There's 46 billion dollars in cash despite 37 billion dollars in our annual R&D, $16 billion of metaverse losses, $27 billion of CapEx, and yet they still have amazing margins. Pre-R&D and pre-Metaverse loss on the income statement, they have a 80% EBIT margin business. And so most of it is discretionary in terms of R&D and metaverse. And the business still returns 15 to 20% return on capital despite all that. So yeah, Clay, I agree with you. There's a bunch of cappes that are being done and we're not too sure about the outcome. But yet still it's”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“A free AI tools to users, and it's unmonetized for now, the AI tools, but we'll see later down the road. And five is really selling a virtual customer service agent to businesses. So it's a whole new addressable market if you think about it. You would be replacing human labor or some of your human labor to do customer service and you would replace it for probably a fixed cost or a monthly cost. And it will probably be a fraction of the salary of a human. So that's major if you think about it. And that's a key for even meta if they wish so to get out of not get out but diversify from advertising, selling another kind of services to businesses. And outside of AI, there's Click to Message Advertisement that is going well. There's business messaging on WhatsApp.”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“So to grow opportunities, there's the use of AI, it's just too big not to talk about it. There's probably five elements within the use of AI. The first one is they will increase internal efficiency, so security, programming, less labor intensity. Second one, they'll increase the ROI on advertising. So we see it with Advantage Plus, the quick audience testing, finding the best visuals, the best text as the AI learn about how you publish stuff. It's going to be meaningful. Third one, increasing the recommended content. So we already have proofs that the recommended content increases time spent and then the ad load, if we can say it that way versus the social graph. And they already made the CapEx to have more recommended content. So it would likely help them grow further. Four is the”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“Has mastered the art of monetizing, but you know that you will have Zuckerbergs against you trying to monetize faster than you. So good luck. And then maybe the last one, the safety and security is going to slow you down much, much more than it used to be the case five and ten years earlier in the past. And so without that, it's hard to figure out how Meta's mode could be greatly challenged. Google Plus tried and they add the financial capacity. They add many other tools that they could intertwine it with the Google account, Gmail, the maps, and so on. And yet, they failed. TikTok had its chance, Snapchat also, TikTok risk being banned in the US. And what have they done in security? I'm not sure they have done enough. It's probably easy for me to say that today, but to meet up pretty much close a gap on the reels. So I'd say good luck for the next one would want to challenge.”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“Better maybe have some form of content subsidization and that cost money again. Probably a couple billion dollars again. Safety and security. Meta has invested $20 billion since 2016, $5 billion alone in 2023. It's not like 10 years ago. You need to have safety and security. There's election integrity. There's undesirable stuff happening on the platform. If you don't do the investment, you could have FT fines from the European Commission and those fines are based on your international revenue, not your profit, not your local profit. So really the revenue. So it could be quite risky for a new platform not to do those investments. So again, it cost many billion dollars. I think it's just hard to scale quickly. The monetization, it's hard to figure it out when you don't have the advertiser base. And, you know, Zuckerberg is”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“And so their bill to win in that regard because of their outrageous dominance of the social media environment. If you think about competition, you might have a chance of building the next TikTok. But how about building three or three platforms like these? What are your odds of success? We think it's likely zero for the short, mid, and even the longer term. Again, think about it. The I caused burden. There's the algorithmic feed. Today it's not based on social graph. If you want to create a good feed, it's going to be based on computing power and generating and figuring out what is your interest with the information you get from the app. So it takes at least two or three years to figure this out and many billion dollars worth of CapEx. You need to build a user network. So you need to have good content. If you want to have good content, well, you better be lucky or you”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“But you have to figure out that those things were mostly temporary, which was not that easy to do. So circling back to competitive advantage, if we exclude WeChat, which is a network where the vast majority of users are China-based, which is not an addressable market for Meta, Meta owns four of the six most popular social media websites by monthly average users. Facebook is number one. WhatsApp number three, Instagram four, Messenger 6. So there's YouTube and TikTok, which they don't own amongst those six. So every new initiative can be leveraged into these four platforms that no one else has. It can even, if you think about threads, the network they've launched, which is quite similar with X Twitter. It can even increase their odds of winning on that network because they're interwinding it with all the other platforms.”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“And maybe Zuckerberg was caught into the fear of missing out as the digital economy improved with the COVID. He says, well, maybe we need more staff down the road. And my competitors are doing the same thing. So let's do it. But the self-corrected pretty quickly and recognizing that he went too much with hirings. And it became clear, by the way, when the layoffs happened in December 22, that the stock was still super cheap, but we would see leverage coming back over the next few quarters because laying off 20% of your employees in a business like this one with leverage, that's magic to the numbers. Yes, the stock went up with the announcement, but we were like scratching our head and like, why is it not going up more? And so we were really bullish at that time. And it add less than 10 times earnings multiple. So it was really a great investment.”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“Think it's maybe fair to start with a little bit of context on what happened in 2022. So yeah, revenue did decline if you look at the numbers. If you exclude the FX impact, it was growing slightly, although not up to the amount that you've alluded in your question. Still growing despite the COVID overang, the mean reversion of digital advertising, the TikTok emergence, Apple's privacy change. So that was a lot of face win. And yet still Meta was still able to grow XFX top line. I think that speaks volume about the quality of the business in terms of numbers. And the other issue was the major the leverage, by the way, where they were doing pursuing a lot of eye rings and the metaverse expense that were getting a little bit out of control at that time.”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“Buybacks, although they'll probably try to keep the leverage stable, or maybe a little lower. And from a history called perspective, it's hard to blame them for repurchasing shares because the stock went up 30% CAGR since they are IPO, I think 14 or 15 years ago. So we can blame them for that from our opinion at Medici. We would tend to think that we would prefer to see them buying back opportunistically there are not much opportunities and keep maybe a little more cash for eventual and adding new countries, international expansion. But again, I think it's pretty fair what they do with the capital.”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“In Canada, but they're opening quite a good amount of new stores inside Dodder City, but since it's at the equity method, it will only be reported on the Castro statement when the Larama Canada will put in new money inside Dollar City. It happened maybe once or twice over the last five years. So you won't see it. So there's probably more CapEx, adjusted CapEx that you would see. And just to give you a good idea, Clay, the store count in Canada is growing 4% to 5% every year. But if you bake in the Prorata shares of Daughter City, it's more like $7 or 8% a year. That's quite a good clip, a good growth pace for a business. 7%, 8%. So we feel like they're running as fast as they can, but they still have the luxury of having excess free cash flows. So it's reasonable to think that they'll continue to do”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“The stores are leased, and so they don't spend on real estate that much, which can be quite expensive in terms of CapEx when this is the case. And so the CapEx are minimal. It leased improvements, its equipment, systems. So it costs less than a million dollars to open a store, at least in Canada. So I guess the reason it looks like they reinvest not quite much of their money in opening store is solely because it doesn't cost a lot. If you enter a store and you look at it, there's nothing fancy about it. It really doesn't cost a lot. And the other thing is maybe an accounting issue. It's not an issue. It's just the way the accounting works. They own 50% of a business in Latin America called Dollar City, but it's reporting at the equity method. So if you look at CapEx, the CapEx bill, it will only be the CapEx for opening new stores.”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“Room for a new entrant, they already densified their footprint inside the major cities. The competitive landscape is much easier also. You know, the dollar stores industry is 50% less penetrated in Canada than in the US. So there's still room to grow, but they have scaled up. I mean, Dollar Tree is the biggest competitor with 250 stores in Canada, and they're not growing. And DollarMI is more than six times that amount. So the moat is just too big. If you want to compete Dallarama in Canada, the best way is you would have to buy Dalarama. And since they're publicly traded and they have quite a nice multiple, I guess there's no one willing to do that.”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“So it's less freight intensive, so it's less expensive to move stuff. The beverage inside the stores, they are almost all on the shelves. They're not refrigerated. And they're the perfect concept for self-service cashier because there's no age-restricted products. There's nothing being sold by the pound. So you don't need to have a balance and with a code that you input on your checkout. Everything has a barcode, so the throughput can be really fast on self-checkout and you can get labor efficiency because of that. Keep it simple style. And even when setting price, many of the items that they will sell, they have their own price tag printed on the packaging. That means the product would sell at the same price in every store, whether or not the store is in Toronto or I don't know, in Sudbury. In Canada, there's not much”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“Less bargaining power that you can flex with those big players. If you visit a Dollar Amazore, you'll see that there's a much higher private labeled mix. Dallarama is known for their knockoffs. You look at the chocolate bar stand, you won't see any Mars chocolate bar. You'll see Meteor, which is absolutely the same thing, but it's not made by the company that does Mars. And they like to keep it simple at the LaRama. There's no frozen food. There's no fresh food. So the energy bill inside the store, inside the distribution infrastructure is much lower because of that. The logistic, think about it, you have no fresh product. You have no refrigerated product or frozen. So the freight, the transportation, you transport by train, it's cheaper. You don't need to transport every one or two days because you have no fresh food.”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“Again, dollar general, 81% of their revenue comes from consumables. And we know consumables are lower margin product. At Dollarama, it's 46%. So base rates, you know, Darama, if they had just that difference, there would be a better margin for Dalaama. Dollar General, they have grocery stores like margin. Dalarama is not a grocery store. Dollar General, 4% of their revenue comes from direct imports. So most of the stuff, the inventory that's coming in Dollar General is coming through a distributor and you have to pay the distributor is cut off the profits. There are 50% of the products comes from direct imports. So that's a huge difference. Dr. General, you will see a heavier mix of national brands. And so if you buy national brands, there's maybe”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“These are people buying their grocery shopping grocery where there are sometimes not any other options, small villages. Dalarma, the core audience, is people that need everyday stuff. Housewares, cookwares, staples, electronics, arts and craft, toys, tools, and so on. So it's really a general merchandise store. The people that are economically constrained, they might want to shop grocery, but they're not the core audience. They're the minority. There's many, many difference that I see, but I could lay out the difference with the result in the margin if you wish so.”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“Certainly know that are a little more than Dollar General, but we have visited Dollar General quite a few times when we come in the United States, so I could definitely comment. They have a wider selection of consumables. Whereas when you look at the LaRama, within the consumables category, they will only have the low price, best deals, items that they can find out. They will bundle offers and do promotions. Dollar Rama, you don't see any promotions, you see everyday low price, no advertising, there's absolutely no advertising. Dollar Generals, there's many formats for a single items. Dollar Rama, almost no big size, especially in the grocery category. You will find a small size if you want more. You buy two, you buy three. Dollar General, their core audience from what we understand. Maybe we're not totally right about this.”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“Practice. When there's a new investing idea that is expected to be shown at the committee, we would pick a name in a bucket and that person would be the devil's advocate. So its only mandate is to be short on the stock and figure out how the bad things he could say about the teases. And what we've noticed is that over time we don't really need to pick a name because the four other ones are actually devil's advocate and even the person presenting the idea is a devil's advocate in itself because it would lay out the positive and he would talk about the risk because what better ways to lower the level of debate than by yourself as a presenter saying what doesn't work in my own thesis?”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“One person who decides what it'll do to the long term is those people that are just giving out opinions, they won't trust the process and they won't speak out their minds because anyway, it doesn't have any effect on the end decisions. The person will end up deciding what he or she wants. And it might sound cliche, but the diversity of opinion has to be encouraged. We have a culture of actively looking for disconfirming evidence. So there needs to be people seeking even the person presenting has to be seeking for contrarian feedback. He has to expect it. And that can lead to every debate. And so you need to have a group of mature people that can get along, even though we have a heavy debate. When the community is over, everyone can get along. Not every people are able to do that. And one funny thing is we have the devil's advent.”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“Might be passionate about financial planning, for example, but investing, I'm not sure, not sure. And so one of my colleague Eddie is my partner. He was so happy to get that portfolio management course at University. He was like, oh, wow, I'll learn investing. And he already invested by himself, by the way. So he had seen it as a way to enhance learning. And he just figured out that, wow, it's all about standard deviation and beta and Greek letters thing. You know, he was like, I'm not investing in Greek letters. I'm investing in dollar sign. It's not Greek. It's American. So we're joking about it. And by the way, maybe one idea that is worth saying about the investment committee is it's not going to be a good comedy if it's run by a dictator. If it's one person taking the decisions and the other person are just there to give out opinions, but there's only”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“Concept of intrinsic value and having a margin of safety when buying assets. It's the one that I figured it out by themselves. They come from outside the industry generally. Doesn't mean someone at school wouldn't have the curiosity to pursue fundamental investing. But yeah.”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I think with labor shortage, let's say first and foremost, that if you find someone good coming from inside the industry, you don't really have the luxury of not taking him or her. There's good people coming from inside the industry. So my point is not to trash against it. But our industry, at least in Canada, I don't know if it works the same way in the US, but it's much more about selling than investing. So if you get people from inside the industry, experience people, they're probably well aware of how to sell a fund to a client. Investing maybe not as well. At school, they learn us the efficient market hypothesis. So circling back to the first question at the beginning, you learn that you cannot beat the market or you shouldn't try to beat the market. And so the people that end up learning the fundamental investing.”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“Coming and they won't be able to grow, and we should sell it as it's well valued. But there was another side of the thesis that was we really learned from it looking at the numbers, questioning the management, but also circling back with the members of the committee. It's that, yes, the market seems mature, but there's many players that haven't done the investment, doesn't have the distribution infrastructure to give out parts quickly. And every time already opens a new store, they're displacing a legacy store, a mom and pop shop store. So even though it didn't look like they had the capacity to open store many years in front of them, they did have that. And so we had some people from the community that said, no, there's more growth upcoming that we think. And having that debate inside and having the patience to keep it, although the value”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“Committee could do that. And if I could add a little more, not all modes are equal. And when the committee figures out modes, as we've learned to work with each other, we figure that some modes are expanding and some modes aren't or even shrinking. One example is O'Reilly Automotive, which is probably a business that you know well in the US. We looked at it many years before we bought it. It was, I think, in 2018. Amazon laid out the news or officially or not. I don't remember that they would get into the aftermarkets auto parts industry. And so already went down and then we bought it. But some of the members of the committee were like, okay, that's a fair price. That's fine. But as the stock recovered over the next two or three years, we're like, okay, we should sell it because there's not much growth.”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“Older investor that wouldn't use those technologies at that time, the search queries, probably you would think, yeah, the phone book business is the best business that ever existed. You don't want to be that person. At Medici, when AI came down, we had an AI expert coming and presenting to the committee and even the rest of the team because we use now AI to upgrade our own internal process. But having the expert, we went from, oh, Google is gonna participate in the AI industry and it's gonna be a force for them because they've done it. They've done it already. And we were like, oh gosh, having that presentation, we were like, okay, they will participate, but they will be one participant amongst other. They will not be the only AM in town. And so having outside expertise and having people being able to bring in outside expertise is key.”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“Looking at you and they're not able to give you any good questions because they don't know what's happening. So sometimes it could be an indicator that you should maybe not pursue your investment idea because nobody's going to be able to challenge you. And we might do a mistake. I think Clay, you like Charlie Munger. He said, I don't believe in just sitting down and trying to dream it all up yourself. Nobody's that smart. So what do you want? Having five pairs of eyes looking at a mold and figuring whether it's going to change fast or slow, could be disrupted or not. Do you want to do that stuff alone or you want to do it as a team? You got to be open-minded if you do it as a team. If you're a young investors in the year 2000 and you are using web crawler, Alta Vista, Google and all that stuff, you would probably see how the phone book industry would be challenged. Whereas”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“And I have the chance personally to have those four people that are rushing me on question when I lay out a new idea. It's a game changer, really. And as a committee, what do you want, even as an investor? Do you want to form your opinion on a single judgment or do you want to consult other opinions? And whether a moat or not can be easily disrupted, you can figure it out many different ways. Life experience can bring you stuff. Knowledge of an industry comparison with other industries. You might relate to some things that might be comparable. Past history, things happen in a given business and you could learn from that. And one of the thing that the community could be useful to is saying too hard. Sometimes you're passionate about what you do and you're not sure that you can understand a company, but you're willing to work on it. But you got four other persons.”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“Although no research is done directly at the comedy level, we assess the research and we ask a lot of questions. And figuring out a moat is, it's not always clear inside of your head when you get information, you know, oh, that's interesting, but having to put it on the paper, having to write it. Because if you're going to present at a comedy, you got to write something. And as you write it, you lay it down on the paper, you see if it doesn't fit. You're like, hey, there's that aspect that I forgot or this or that. Your first committee is your own committee because you write it on a piece of paper and there's four other persons waiting for you that are going to grill you questioning you on what you laid out on the paper. So it's really a game changer. I don't know how many investor individual investor listened at that show, but having other people”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“It's like a muscle that you need to flex. The more you know about the business and the more if the business is great quality, the more you come up to the idea that multiple isn't that important. It might look expensive, but if you know, hey, that company is able to reinvest at 20% rate of return. They're generating a lot of cash flow. They're reinvesting most of the cash flow. Generally, even 30 times P if you have such a business, it could prove to be cheap. So reasonable is like, it's not black and white. So it's a judgment call, right?”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“Been that way. But things happen, problem happens in life, and maybe five years later down the road, you have your opportunity. There's a problem, but you can focus on the problem and figure out if you want to buy or not.”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT