Five Points Capital

@the_zack_zhu I agree it’s sad, but you’re probably right. $NFLX will have to adapt and include a version of this in order to stay relevant with the youth long term.

Short drama might be a huge threat to Netflix. $NFLX Hongguo short drama, owned by Tiktok's owner Bytedance, was launched in 2023 and now has surpass 120M Daily active users. The average users spend 2 hours on the app. Short drama is a very dense version of traditional series, basically remove all the context and only keep the part that can give users dopamine hit. It's extremely addictive, I would say it's more addictive than tiktok. It's next level brain rot content, it's now already very popular in Taiwan and Southeast Asia. And is expected to go to more western world. It's sad to let these kind of things to dominate our attention. But this is a clear trend. Might share more in the future. - Source: Latepost

@CapexAndChill Being from the U.S., I am not a user of $MELI services, but AI customer service is great. I don’t know what $HOOD uses but their AI customer service is shockingly good. No position in $HOOD currently but I am a client and the AI is better than most human reps at other companies

The biggest financial win so far for $MELI with AI is in customer service. In the past, handling a full customer support case cost the company about a dollar per interaction. To lower this expense, they built an internal AI assistant. In the final months of 2025, this assistant managed over nine million customer chats. The AI successfully fixed nearly 90 percent of these problems without any human help. This massive success saves MELI immense amounts of time and money while keeping operations smooth. MercadoLibre is also using AI to directly generate consumer activity. In late 2025, they released a new AI assistant for Mercado Pago. This tool is a highly capable financial agent. Users can talk or type to the app to execute real financial tasks. They can ask the AI to pay bills, send money to friends, or check their spending habits. This makes banking very easy for users. It removes friction and keeps people engaging with the app more often. However, they remain very honest about the hard parts of scaling AI. They gave their software engineers new AI coding tools to speed up development. But leadership noticed that writing code faster does not instantly make the whole engineering job faster. Programmers still have to go to meetings, plan features, and fix broken code. Running all of this AI is incredibly expensive. Computer chips are hard to find globally, and cloud computing costs a massive amount of money. Their technology infrastructure bills are steadily going up. They continue to prepare for a major strategic threat on the horizon. Younger people might eventually start using chat tools to buy things instead of opening shopping apps. MercadoLibre knows this shift could happen and is preparing for it. To survive, they are adopting a strategy to work with OpenAI while also fighting against them. They are a huge enterprise customer of OpenAI and actively test new models like GPT-5 for their internal tools. At the same time, they are working relentlessly to keep users locked into their own platform. They are aware the landscape is changing, and they are arriving highly prepared to compete.

I’m just guessing here but I think there’s a good chance the low is in at $77. The reason I say that is the following: $77 was the exact support it hit on March 3rd following earnings, and then again it bounced off $77 last week. I’m no technician but is that a “double bottom”? And on top of that, there’s nothing fundamentally wrong with the company yet it fell over 60%. Yes there’s some short term margin pressure from higher than expected investment in Shopee, but that’s not a good reason to tank the stock. They’re executing extremely well, they just want to strengthen their moat which I think is the right decision. If the macro deteriorates further though, $50-60 is potentially in play.

@fivepointscap What do you think is the floor for the stock this year? Given oil prices, margins reset, growth faster, other factors.

I still can’t believe that $SE is trading at ~20x forward earnings… For a company that grew revenue 36% and net income 255% in 2025 With consensus for another 30%+ revenue growth year in 2026 And what makes this even crazier is that 15% of the market cap is net cash. So on an EV/earnings basis it’s materially cheaper. For a founder led company with huge insider ownership, a flawless balance sheet, $1B buy back. And the company’s main revenue driver, Shopee is nowhere near margin maturity. Operating margins will expand from 3.5% to 10%+ by 2030.

Nice to see $RDDT make a move today. Between Q1 earnings, the Anthropic case, and the depressed multiple, Reddit has a lot of near-term catalysts to move seriously higher. Add in the inevitable S&P 500 inclusion later this year or next, and I think we’re set up for a huge move over the next 12 months.

@smsutherland Yeah and it may. It just seemed that they were the one exception to the rule and now it appears no one really is.

@fivepointscap $NIKE is one of the all time iconic brands. I wouldn't invest but I suspect they will rise again.

I think the fall of $NKE solidifies the idea that any moat built in the apparel industry is fleeting at best Buffett’s “worst mistake” by his own admission was his acquisition of Dexter Shoe Company for $433M in 1993 And we have a long line of terrible stocks in the space. $NKE, $LULU, $UA, $ONON, $GOOS, $COLM True luxury brands with a long history like Rolex, Cartier, Hermes, Louis, etc. seem to have staying power. Everything else is a race to the bottom.

I’d say somewhere around 40x forward would make sense. As a base case, I expect operating income to CAGR at around 28% over the next five years which results in EBIT going from $2B to $7B by 2030. A more bullish case would put that CAGR between 33-40%. That kind of earnings growth does not map onto a 20x forward p/e or a 30x trailing p/e. My DCF base case also returns around $160 present value with a 10% discount rate, which lines up with ~40x forward earnings.

@fivepointscap Where should it be today?

@the_zack_zhu Of course it can be cheaper but it fell 65% already. The market is pricing in supply chain issues, higher energy costs, weaker demand, etc. And just like the price front runs the problems, it also front runs the solutions.

@fivepointscap It can always be cheaper. I think there will be a huge supply chain problem soon.

I feel like the stock market is still pricing like the strait will open up after two weeks. In reality, it’s probably should be price in for a lot longer. I think now, at most, market only suffer from minor valuation compression, but if it close for more than 3 months, it will cause huge supply chain problems and economy downturn. Then it will cause huge growth compression. Then it’s the real show. I’m really bad at macro, so I’m just saying. I’m not an expert in this topic. But I will still believe in myself.

$MU will be a buy when it’s 40x earnings

The damage is absolutely recoverable. And Israel saying they wouldn’t follow a US ground invasion signals that this “little excursion” was just that. It’s starting to feel like there’s going to be minimal impact on earnings from this. I know the bears are sick of hearing this, but I think we’re getting another V.

Always watch the incentives. Midterms are coming up, and Trump needs the market at all-time highs to have any chance of winning. This doesn't necessarily mean he has the power to do so, but it does favour a recovery. The question remains... Is the damage irrecoverable?

@longriverCM I think there’s a pretty good chance he added to $SE $MELI $CPNG. Maybe not, but we’ll know in ~2 weeks right?

@fivepointscap I think he’s been buying and holding $SE starting 2025 Q2. If he is holding it now still, there is no way he is seeing positive return. He added 670K shares last quarter. So i hope he remains intact.

$SE I have this gut feeling…Drunkenmiller might’ve exited the position. But if he stays and adds? I’d cry.

@StonkChris ~33%

$MSFT is down ~50% from the highs and sitting at its most oversold level in over a decade on the monthly… …and people are still preaching caution like we’re at all-time highs. Bruh. Some of you don’t hate losing money… you just hate buying low and selling high.

@the_zack_zhu I’m curious, what are you waiting for to deploy cash? You don’t think $SE at 24x trailing EV/earnings is better than a short term bond? If $SE even grows earnings at 10% per year it will be a decent investment. And I expect earnings to grow at ~20-30% per year for a while.

I think there are quite some stocks that price in very attractive spot. But I’m still hesitant to go in, I’m still 98%+ in cash or short term bonds. I think, in the past few time of downturn, investors got into the habit of not thinking of things ahead, and eventually, after a very short period of time, everything become very good. I tend to think different. But like I said, I’m just a business nerd and super bad at macro.

@the_zack_zhu It may not have the same dollar value, but everyone’s time on Earth is equally valuable. It’s also irrelevant. People want things quickly, regardless of whether they need it or not.

I think one of the core thoughts of $PDD is that "poor people's time is not valuable". And this concept forms of the the most important distribution strategies of $PDD logistics and how they gain traffic.

To anyone who feels like they “missed it” and don’t want to buy today: You didn’t miss anything. We are back to last week’s prices. $SE at $83, $MSFT at $370, $RDDT at $135, $META at $570, $MELI at $1700, $RBRK at $48, $HOOD at $68, these are all great buys.

@SteadyCompound In some cases, you can get quality + a massive sell off. $SE $RDDT $HOOD to name a few

During sell-offs, people rush into whatever has dropped the most. Down 60%? Must be a deal. But a bad business down 60% is still a bad business. Quality matters more when everything is falling. Buy the companies that will come back stronger, not the ones that fell the hardest.

For the types of stocks Buffett is generally interested in, I’d say he’s right. Many of these “boring, stable businesses” trade at 20-25x earnings with 3-5% EPS growth. But there’s a lot of value in growth stocks like $SE, $MELI, $RDDT that have 30-70% EPS growth and trade at 30x earnings.

Huh, interesting. *WARREN BUFFETT SAYS STOCK VALUATIONS STILL AREN'T ATTRACTIVE

@JayC_Investing Yes if you look at total hedge fund and family office ownership it’s the highest for $SE

@fivepointscap Sea Limited is the most popular of the group among hedge funds? that's something new

Why is $SE so unpopular with retail investors? Whenever the topic of ex-China EM growth stocks comes up on X, $RDDT, YouTube, etc. you get a lot of comments regarding $MELI, $NU, $GRAB, even $DLO, but $SE gets ignored or bashed. My only guess is that the stock became very popular in 2021, people bought in at $300+, and eventually sold for a huge loss. Now they just write it off because of the bad experience. Any other ideas why? Interestingly it’s the most popular of the group among hedge funds…

@illegalHDBcat What government crackdown? I’m not sure I understand what you’re referring to

@fivepointscap Every result is deemed “sketchy”, margin gonna be eroded by other platform (eventhough they are mostly operating in different segment), every results beat must be accompanied by rumor of possible govt crackdown (worse for SE since they are not even based in China)

@plantmath1 @EquityBrian And then another few weeks away from delisting

No theres a huge difference to me. China invades Taiwan —> US investor in US stocks. They’re down big but the value will come back in a few years. China invades Taiwan —> US investor in Chinese stocks. They’re down 100%. The capital is permanently lost and cannot come back. That distinction is huge. It’s not that I “expect” anything to happen, but theres idk a 20-50% chance China invades Taiwan by 2030? I’m not gonna sit on the sidelines because that might happen. But I’m also not gonna buy Chinese stocks knowing that I’m one headline away from a -80% overnight move.

US still overvalued heading into what could be a recession. Chinese tech is cheap, growing, and nobody owns it. So what’s the argument that China doesn’t work from here?