Mohnish Pabrai Calls Meta Platforms (FB: US) an “Easy Double”
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- Опубліковано 11 лип 2024
- For more information on Mohnish Pabrai and the Dakshana Foundation, please go to www.chaiwithpabrai.com and www.dakshana.org/.
Use the code DHANDHO to get 15% off any membership at www.SumZero.com: 15% of funds received from memberships using that code will go to the Dakshana Foundation.
00:00 Start
00:10 Divya Narendra introduction
01:08 Dakshana Foundation offer
01:30 Mohnish discusses Dakshana Foundation mission
02:39 Mohnish Pabrai on Divya, Cameron and Tyler Winklevoss, and “The Social Network.”
03:48 Divya on differences between “The Social Network” and real life
06:02 Experience and lessons learned in 2003
06:33 The social dynamics of Facebook (FB; META: US) and SumZero
07:29 META financials and valuation
08:09 Net income vs. EBITDA for valuation
08:46 META’s 3.6B user base and questions of growth
09:19 Market penetration, user growth, and engagement as a metric
09:49 Reasons for stock collapse after Q4 2021 earnings (Feb. 2, 2022)
10:04 META’s metrics for Facebook activity
10:29 Market reaction to decrease in daily active use
10:58 Divya: “usage on the platform is steady to increasing”
11:41 Facebook engagement, content consumption
12:09 Divya: What Facebook used to be versus what it is today
12:40 Creator economy
12:50 Short-form video, TikTok, Facebook/Instagram reels
14:10 Competing with TikTok
14:18 Disclosures from Mohnish and Divya re: META/FB
15:05 What Mohnish Pabrai finds “extremely compelling” about META/FB
15:12 Ad targeting
15:47 Mohnish: “...they can read my mind.”
16:11 Reels’ ad targeting not currently relevant to Mohnish
17:54 Mohnish: “(META) stock ought to be a double at current interest rate.”
18:33 Mohnish’s skepticism around the Metaverse
18:51 Google Glass
19:11 Landmines in new tech: use cases, Google maps, iPhone
20:14 Mohnish: “Meta is really good at acquisition” - Instagram, WhatsApp
20:30 Potential in reels
20:58 “If you’re an investor looking for a double in 2-3 years… I think this a decent bet with relatively low downside.”
21:27 Divya: the bullish case for the Metaverse and adjoining technologies
21:40 Divya: limitations of TikTok “It’s just another app.”
22:22 META’s strength in developing adoptable new technology
23:00 Google Glass’ problem with form factor vs. META's Ray-Ban/Luxxotica tech integration
23:47 Project Nazare: Meta’s AR glasses
24:06 Meta’s spend on new tech hardware initiatives
24:24 Divya on tech investing
24:44 Mohnish: potential look-see approach to investing in META
26:03 Bullish future milestones in META tech initiatives
26:12 26:12 Divya: “You don’t need to believe in the Metaverse to own the stock because the core business is trading at 10x earnings.”
26:35 Structural tailwinds behind industry
26:44 What investors should look for in Meta tech initiatives and milestones
26:50 Popularity of Oculus Quest 2 vs. competitors
28:02 Considerations around Quest hardware
29:22 Divya: “The Metaverse is here today”
29:43 AI applications for non-early adopters
31:00 Comparisons between META and other big tech companies - Mohnish
31:30 Amazon (AMZN: US) and TenCent (TCEHY: OTCMKTS)
31:55 AMZN: AWS success and Firephone failure
33:07 TenCent, Microsoft (MSFT: US), and Alphabet (GOOGL: US)
35:03 Mohnish’s skepticism around META’s big bet on new tech: the opposite of AMZN
36:17 Divya: META developing a suite of devices: watch, glasses, software
37:10 Variables that influence adoption
37:29 Reality Labs
38:00 Future of devices beyond cell phones
39:04 Divya: “Enormous other option value that’s in this business that has to do with the all the IP that’s being developed to make this stuff.”
39:20 META’s AI Research SuperCluster:
fastest AI super computer in the world and data farms
40:17 META’s potential challenge to AWS
40:50 WhatsApp and public key encryption and monetization
41:36 Click to Message connecting customers and businesses on Facebook
42:47 META’s acquisition of Kustomer CRM tool
44:21 Divya: additional disclosures: positions in AMZN, TCEHY, GOOGL, AliBaba (BABA: US)
44:48 Founder-led approach in META (and AMZN)
46:29 Mark Zuckerberg’s strengths as a founder
46:39 Mohnish “My concern is that they (META) don’t have the DNA of an Amazon”
47:21 Mohnish: “I like the Amazon approach better” in experimenting with tech initiatives
47:45 Divya on misconceptions surrounding Metaverse
48:43 Divya: “We’re already seeing commercial activity in 3D environments”
49:00 META enabling devices that people are already using w/ new tech
50:22 Mohnish: Elon Musk and SpaceX
51:33 Mohnish: Humans more likely to go to Mars via SpaceX than META getting 2B users in Metaverse
52:29 Divya: plenty of growth left in META’s core business
56:10 META stock was down due to guidance, not investments in Metaverse projects
58:55 Departure of Peter Thiel from META board
01:01:20 META’s ability to attract and keep talent
01:01:52 Zuckerberg’s talent for spotting “embryonic acquisitions”
01:02:58 Final comments from Divya and Mohnish
Dear Mr. Narendra,
As a new viewer of your contents, I would much appreciate you having a better internet connection. Love the content with Mr. Pabrai.
Keep it up, Cheers
I second that - considering he was involved in FB's initial development (comes out of tech space)
It’s hard to watch videos like this. Even tho I want to hear what’s going on. If you want more subs, you gotta step up your game.
I second that
Great convo - SO HARD to watch unfortunately
Horrible audio indeed
Wonderful interview. If you're blessed enough to have an interview like this, surely it's worth getting a decent internet connection, camera and microphone!
It is now an "easy triple" ..
For folks with money beyond imagination, tech world at their finger tips, recording with such poor connections is surreal by itself..
Money truly cannot buy everything..😊
But the content was awesome.. Thank You !!!
Lol. Thanks for watching/commenting. We'll see about buying a hyper-warp-speed router to improve connectivity. On a serious note, we're working on getting that kind of stuff fixed and will bring you better audio/visual in future productions. Thanks again.
@SumZero let me know if you need any suggestions or help :)
Mohnish has a bright future as podcast host!
yeah he is really good with his inputs!
A lot coming out of this Fire hose, insightful session on contra thoughts.
I agree brad
Brad thank you bud. You and your buds have great investing channel. I like tom as well.
thank you for pointing this interview out brad.. kinda sorry that immediatly stopped watching your video for learning from mohnish
Pure gold. Thank you. I love the difference in perspectives.
Incredible content. Thanks to both speakers!
thank you mr mohnish, i was see your video 2 years ago and i jump in meta from 180 until 100 and keep buying it all the down side trend
Great insight. Very interesting discussions. Thank you so much for sharing.
This was a Great Conversation! Thanks.
Another great interview nice one!
thank you so much for the insights
What a gift of insights. Many thanks for sharing.
Good quality content Divya and Mohnish. I wish you guys do such discussions on a more regular basis. Lil disappointment with the poor audio quality in between trying to hear the quality content with all the focus 🧘♂️
Wow... Great video ... Very informative
It is really awesome！
Learned so much from the insights shared from this interesting exchange of interview.
Mr. Pabrai truly follows Charlie's discipline of getting into a debate only when one can put forth the perspective of the other side better than them !! Wonderful !
Thanks for making this podcast! A little friendly feedback, could you please mute your microphone while Mohnish is talking? This would reduce the echo and go a long way in making the overall listening experience better. Looking forward to the next episode 😊
I asked my wife who uses FB on a regular basis and asked her if she sees a future with FB. Similar to Monish, she says she found a lot of great products through FB targeted ads. She really likes the product and she's glad she saw those ads.
This was a great interview! @Divya you are a great host. But I really hoped the video and audio quality was better, it was really annoying as it was an insightful discussion :)
Thank you for that talk guys
_"If Mark has a good relationship with Peter, I'm sure he would easily be able to talk to Peter if he needs advice."_ Man, you really missed the point. Zuckerberg doesn't think he needs advice, he keeps his own counsel, he's reconstructed the board to be sycophantic yes-men, he let Sheryl Sandberg go b/c she had the audacity to tell him it was possible for FB to pursue the metaverse AND invest to maintain the vibrancy of the other properties and that it was important that he do that. Now there is no one around to help him with his obvious blind-spots, and no one who will tell him the truth when he most needs to hear it. Zuckerberg idolized Steve Jobs. Now he's on course to repeat the self-destructive path that Jobs took when he wanted to drive Apple over the cliff with his single-minded obsession with the Lisa. Had the Board not fired Jobs, he would have bankrupted the company and driven away most of the talent. He was bitter to his dying day about what he viewed as a betrayal by John Sculley and Mike Markkula, never having come to understand and accept that but for them, he never would have grown into a second act, and there wouldn't have been a company around for him to return to. Zuckerberg's structuring of the voting shares in FB was a direct result of Jobs imploring him. It was the worst advice he could have given, and the worst that could Zuckerberg could have done. Checks and balances aren't there just to safeguard shareholder interests, they're there to save the founder-CEO from him/herself. Ironically, it's Zuckerberg who will suffer the most from his imprudence, and having no one around to counsel him.
Excellent post. I've often wondered how to view the skewed voting structures in Meta and Google. A friend of mine worked for a profitable manufacturing company co-owned by a passionate engineer and an account type/bean counter. As I heard it, after several conflicts the engineer bought out the other's stake and promptly spent the company into bankruptcy with his projects. It takes more than passion to navigate sometimes. @bis
Very interesting, but please make sure the audio works better next time...
Hey divya, great effort and learnings. Just one recommend, if yupou upgraded your microphone and internet connectivity , video experience will be more pleasant.
Thanks…
Looking forward to more such investment videos
Amazing Content!!
Great conversation gents :)
Looking forward to that A2 Milk update following the recent half year call Tom. Eager to hear your take m8
Amazing, keep getting Mohnish on your videos. The quality of the content is incredible.
GABS there's a lot of this coming and much of what we cover is private for members only. We have one coming up that I think will be quite compelling on a very liquid stock with long term growth and a cheap SOTP valuation.
We certainly will. Come join at sumzero for more!
@@divyanarendraofficial I am already a member. Thank you so much for the content you create for us!
Network effects of meta/fb are unbeatable. Just having relatives/friends connecting with each other across the planet in a simple metaverse concept is a win. I don’t think meta is far away from doing that.
or concerts, meetings, sporting events etc. Pay per view sales will go trough the roof when this looks/feels really good and realistic.
You are totally right. My father and mother are on FB. I will always be connected even thought I don’t drug myself on their feed.
Great conversation! Doubled my position at $220. Currently at 27% of my portfolio. If it approaches anywhere near $160 I'll likely double again. I agree with Mohnish that FB is a double without the Metaverse. Having that option though is extremely compelling. If the investments payoff, who knows how big it could be? I don't think we've even scratched the surface in terms of use cases for the metaverse. Will circle back as planned in a few years to see progress. For now I'll enjoy the popcorn. Thanks for sharing this content!
Love seeing this sort of conviction! Come join SumZero. This is the tip of the iceberg.
@@dknyc82 I've enjoyed following some of the conversations on SumZero. Conviction is all I know. All in on 3 stocks right now.
27%??? Holy shit bro! That’s some serious conviction
@@parkerphelps5202 by most commonly accepted metrics it is high conviction but digging into the numbers I'm inclined to feel it's still conservative. FB is priced so low at the moment, as an investor you don't need the metaverse to see a high probability of a favorable outcome. In fact, I didn't even bother trying to value Reality Labs as the core business is entrenched enough for me to see worthwhile upside, this with very low growth by historical standards. If I had strong conviction on the metaverse I'd have no problem going to 50%. I'm of the view that you have to back your high probability hands.
@@Kapitalist912 do you mind sharing what are your other 2 stocks?
Sounds like Mohnish sees facebooks metaverse as a call option pie in the sky seperate to facebooks core business. But maybe their developments towards the metaverse (even if unsuccessful) will strengthen and supplement their core business…
I'm long on both FB and TCEHY...
What's his Tshirt brand ???
This aged well ..
Just bought at 98 usd.
Great interview, but the audio is horrible
Great discussion here. I think all that matters is “growth” of addressable market. Isn’t Roblox way ahead in terms of Metaverse growth opportunities with their Ad platforms , virtual events etc?
Thanks for watching and commenting. News and research on Roblox (RBLX: US) can be found here: sumzero.com/pro/entities#/33132/primary
@@SumZeroInc Thank you 👍
monkish missing saffron from wall... I hope he still has it in his heart...
Monish literally became my idol in investing over throwing warren buffet. Monish has a great way to tell things and he literally simplifies investing. Thank you Sum Zero for positing it. I just subscribe to your channel and divya you are just an amazing host. it was pleasure listening to both of you. Thank you for the time line as well it was very easy to navigate.
Thank you for the kind words and for watching/subscribing. Please check out our other videos... including this one with Mohnish. ua-cam.com/video/n6cX8l8iQKE/v-deo.html
Thanks Hamad, that’s very kind of you!
@@divyanarendraofficial thank you for hosting Mr. Pabrai. He is definitely one of the highly valued value investor. His mindset on things and explaining them with different perspective and understanding makes me watch all the videos featured him.
Divya I did watched other videos of you with Mr. Pabrai. It was very insightful. Also let's not forget your hosting skills are amazing. Please just a tip since you read comments of your followers like me. Next time please do Q&a with pabrai in the end on your podcast in behalf of your followers. This would be more interesting to watch and be heard by people we look upto when you bring them as a guest speaker. Kindly do a live on your UA-cam channel as well now and then and gives us a heads up so we can post questions to you and u can pick and choose to ask the guest. It will be a very interesting format to watch and would help you to gain more followers and compound your channel in long run.
@@divyanarendraofficial sorry for the late response on the comment from you.
Thank you for everything Divya. Once again you are a very warm host to listen to. Have a blessed and successful year. Cheers.
Not quite 100 percent on the “easy double”, but I am inspired to do some more research with a specific goal of finding my “buy” price. Thanks for taking some of the mystery out of Facebook/Meta! Oh, and I’m really wanting some popcorn right about now…
Gonna take a quadruple to get that double now. ;-)
u need a good audio system bro. very sharp pain when hearing the speeches
Great Discussion!! Thanks for both perspectives….
Interesting talk...but sound is not clear..
Diviya please invest on a good camera and mic. It was not very clear on your side. Overall thank you divya.
Not to sound like a tech support agent, but... we're aware of the problem and working on solutions, thanks for your continued patronage.
Finally
Haha Jorge I was waiting for this one as well!
Good content (despite the audio…I’ll spare you another comment on this…). Completely agree with Divya on this. At first glance people think of the nerd living in his mom’s basement as the main user for the meta verse. There is going to be so much development in AR that comes from the company. They will find a way to shift us away from phones…in time. From a pure valuation standpoint, FB is so unbelievably cheap related to is revenue/income/FCF growth. Even if qualitatively an investor doesn’t love the meta verse idea, it’s hard to ignore the numbers. As a value investor, it’s important to keep in mind that sometimes the best value is a fast growing tech company with no debt.
Thanks the comment (and for sparing us yet another poignant observation on the audio here). And yeah, people - for whatever reasons - often seem to think that VR technology is going to freeze or somehow go extinct. Zuckerberg's bet is that Meta can catalyze its evolution.
Love you ❤️
Thanks but very painful on the ears please get some tech help with audio.
Connectivity problems: we're working on fixing that. Our recording protocols are trickier than they seem.
Dude is very smart.
Interesting thoughts and ideas discussed here, but man that audio quality is just horrible.
Anyway, thanks for that interesting interview with Mohnish Pabrai and please do something wit that internet connection.
Did Mohnish initiate a position in FB?
15:12 i find interesting Monish like FB's targeted ads. My experience in startup companies and startup founders is that FB targeted ads are terrible and burns a lot of cash. I wonder if it's just better for larger companies with more cash to burn?? Also in a declining economy, less money to spend on ads in general
I hate to say it but with Mohnish's obsession with high risk ER investments (especially scrupulous Chinese ADR's) I have much more respect for Narendra's train of thought then Mohnish's even though Narendra is invested in China as well. I think his conviction in FB and his vast knowledge he should own more in FB and US Tech then in China for so many high risk reasons. Hope Narendra position in China is not too big to burn his pockets invested in a dictatorial communist regime that has changed their stance against the free market and SEC pressuring them for audits etc.
This guy is really reaching (the guest). He really wants it to be right more so than it actually is.
Thank you, however please make sure you internet connection is working before you record these. The constant stuttering is very off-putting, which is a shame as this is an awesome conversation.
Either that or our next video will be with whoever is shorting the ISP. In all seriousness, we're looking at solutions and plan to bring you much higher quality in the future.
Il vecchio taccagno di monish è sempre il numero uno!
LOL. Poco e spesso riempe il borsellino.
Could one argue, that many of those who sold FB have never used VR glasses?
Marc B - it's fair to say that most people who have commented about metaverse challenges have never used Quest 2. This is why many "pundits" think it's 10 years out, which is completely wrong.
"So, first of all, any guy who lands two rockets backwards, simultaneously... I would never bet against a guy like this." 😂
Need to upgrade the video quality... content is great but imposaible to listen to
Ugh, we know. We're working on improving connectivity issues. Unfortunately, there's not much we can do in post-production to improve sound. Still, we're thankful for our audience and their support and we'll be improving future productions. Thanks for commenting.
25:00 Monnish are you laying out my plan?
130ish and then stabilize - my prediction.
As long as 90% of humanity has some strongly held pointless point of view that they wish to meme, pontificate, and argue over, Facebook won't be going anywhere.
I saw people bashing Facebook on facebook. That's when I knew I wanted to buy this stock
Mohnish is way off base saying Elon will put a person on Mars before there is a Metaverse reality.
D Mo, I think you're right. Many aspects of the metaverse will be here within the next 1-2 years.
I think the 67% market share over all devices on steam shows Meta's competitive advantage in VR.
Including the quest, quest 2, rift etc with quest 2’s highest market share growth rate continuing
Good content! why is the number of subscribers so low? Must be the the video quality..
Thanks! Hope you'll drop by again.
@@SumZeroInc i am very excited about meta’s new venture into metaverse, and I saw oculus was selling in Costco and seriously thinking to try it out
@@wangyuan0325 As both Mohnish and Divya point out, they're REALLY smart about acquisitions: that was a good one.
@@SumZeroInc I agree, although I slightly disagree with replacing phones with headsets, unless the headsets are more convenient, there’s no point to not use phone (it’s actually more appropriate to call it handset in this context). In fact I see meta approach as to creating a superset that includes headset, handset, leg set, body set.. with an operating system that connect all the subsets.
@@wangyuan0325 Agreed. Phones/headsets aside, that seems to be the direction that technology is headed. The Apple universe, for example, connects wearables (apple watch, air pods) to a handset, which, in turn connects to the cloud and can serve as a satellite device to one's MacBook etc. Same thing with the IOT: devices connected to the cloud, serving as satellites of a sort, each with a different function. It'll be interesting to see where FB/META takes it: hardware, software, UX/UI... etc.
SumZero can't you invest in a good camera and a good internet ? Don't you think it provides value to you ?
The quality of what goes in is the quality that comes out .
Thanks for the helpful comment and for watching!
Divya's thinking is like a childs in the presence of Monish
High quality conversation.
Quality of the audio? Not so much
I like Divya I really do, but I really don't see why any human being on this earth would by digitally enhanced ray bans
Let’s say your AI assistant was programmed into your glasses. You could use maps without having to pick up your cell phone and have it display in your glasses. This is one of innumerable use cases. You could ask the same question about digital enhancement about many products - Tesla’s, Alexa devices, video doorbells, etc.
@@divyanarendraofficial Mind Blown! It's actually unreal to get a response from you, much appreciated.
To your point I appreciate that your much smarter than I am when it comes to matters such as these, though just to take one example of Alexa, I happen to work in Amazon (Marketplace) and the value proposition that Alexa provides is clearly understood internally to be primarily toward a specific niche of users such as the visually impaired and the elderly (Makes their lives easier). The convenience of AI in your glasses over similar in your phone I struggle to see the utility, and Gregg Maffei over at liberty had a fantastic interview speaking on similar grounds and why he's not bullish on wearables... the utility just doesn't seem to be that strong imo.
@@Barca25644 that’s awesome you work for Amazon. I think the difference is that glasses are already on your person, they travel with you and they’re in your field of vision. It leaves a lot more room for AI to be useful in an immediate fashion. You combine that with further evolution and you get to something game changing imo. It doesn’t even need to replace the cell phone entirely. It just has to be a compelling alternative to get the ball rolling up the adoption curve. I’m not familiar with Maffei.
@@divyanarendraofficial Gregg Maffei CEO of Liberty Media ....John Malone's Company. Surprised you haven't heard of him there's been more than a few write-ups on Liberty on the Sum Zero platform (But then again you probably have a lot less need for the write-ups in your financial position than I do😅)
Been saying fb is a simple growth play for months
What other company has 5billion eyes on it
Cash cow going thru chnages
Always a fan of Mr. Pabrai, but the connection was poor
His comment about board members is way off too. If you are relying on the board you shouldn’t invest. CEO’s control companies.
D Mo, I would agree, especially with founder led businesses like Meta.
He also bought Alibaba, a VIE. He is not some prophet, he is just another bloke. "Easy double" sounds like a sales pitch.
If you're interested in the fundamentals behind the idea, Divya's research can be found here: sumzero.com/pro/research/ideas/15208. It's open-access: anyone with a login can see it (sign-ups are free, no CC needed). Thanks for watching.
Why can't this guy Dhivya speak clearly, his accent is so artificial. Mohnish is a gem.
easy 2X now the price is at $90. i heard he cutloss HAHAHAHAH
ok
He needs to invest in his Wi-Fi and laptop more
Thanks for watching. We hope you got more value from the video than that.
You think someone who has so much money can afford a better mic and internet connection
Thanks for watching and for your insights.
Can anyone take this conversation on tech seriously with that internet connection and webcam?
Yes
Filmed on a potato.
Thanks for your insightful commentary. www.sumzero.com
i live in the hood in waterbury and have better connection than this dude lmao
Haven't seen a worse quality video and audio ever... Divya, fix that shit up, make sure your volume is the same amplitude as Mohnishes...
Gets Mohnish Pabri to come on his channel but uses the cam he dug out of his attic from 1998 to facilitate it. Rookie move. J/K. Seriously tho. :))
Thanks for the helpful comment and for watching! Seriously tho.
I don't want to be rude however you should speak less and let the guest like Mohnish speak more in your show...
Ali - this wasn't me interviewing Mohnish. More of a discussion between like-minded investors. In one case, Mohnish - a value investor who at the time of the interview didn't own shares, and the other being me, someone who's owned the stock for over a decade.
“Umm … umm … umm … umm…” Bro, work on your annoying speaking tics
Thanks for the incredibly helpful comment, bro.