As you might have noticed, Speedwell just launched a podcast 3 weeks ago called “The Synopsis” (Apple, Spotify). We wanted to share a bit more with you on the thinking behind it and what we hope is different.
When we research a company, we read everything from their S-1 filing and their very first earnings transcript to their most recent annual report and latest proxy. While there is nothing “proprietary” about this, we find that there are a lot of learnings that are missed because many do not have the time or desire to spend so much energy going back so far.
For example, in our RH podcast, we talk about how some of the original business problems plaguing Restoration Hardware were there when it was run by the original founder, Stephen Gordon. In specific, he had issues driving traffic and staying top of mind for infrequent purchases. It is interesting to see how he solves for this problem (tchotchkes) versus Gary Friedman (restaurants and PJs).
And in our Meta episode, we look to the history of social networking to dispel the idea that social networks have a fad-like aspect to them. We spoke about the factors that led to the demises of MySpace and Friendster, knowledge of which could have given an investor more confidence in their holdings.
We also discuss how Meta became such a dominant direct response advertising juggernaut and why assumptions that other companies like Snap or Pinterest would be able to figure out direct response advertising were missing a key aspect of how Facebook originally onboarded advertisers.
Research doesn’t just help you find a stock; it is critical to give you the confidence to keep it. This is why we are so thorough in our research. As celebrated money manager and author Frederick Kobrick articulates so well, “confidence is what helps successful investors to buy more shares when price dips, while investors who do not know what they own become emotional and sell out of fear and lack of knowledge”.
When we published our report, Meta had many factors impacting their business. Legendary investor T. Rowe Price had a list of 6 things that could go wrong with a growth business, and all of them were applicable to Meta.
Here is how they all applied to Meta: (We are a bit generous with the interpretations of what Thomas Rowe Price was saying, but his comments are well over a half a century old!)
Investors were questioning:
- Management’s judgement (massive metaverse bet)
- If the product was done growing (Facebook and Instagram going to be irrelevant and replaced by the “next big thing”?)
- How much ATT and new privacy advancements impaired ad targeting
- TikTok’s rapid rise
- Antitrust issues and various privacy regulations
- Increased capital intensity
However, an investor could have gone through and analyzed each issue independently and unemotionally to come to a conclusion. The analysis we did in our original Meta report (released January 2023) was to see what the market was implying about their business through a reverse DCF. We noted at the time that the market was “implying that the Meta is done growing forever”. We felt that this framing, combined with deep knowledge of the company, would help investors think more clearly. Speedwell’s podcast is meant to be a “synopsis” of our deep analysis.
However, that doesn’t mean it is superficial. We know that there are a lot of business podcasts, but we don’t think most go the extra level into details that would teach you something new. Every episode will focus on a single business, and in each you should learn something new about the company, industry, or a novel way of thinking about business in general. If not, we have failed.
We are distilling down our thousands of hours of research and tens of thousands of words report on each episode.
In the coming weeks and months, we will have episodes on Copart, Floor & Decor, Coupang, Constellation Software, Walker & Dunlop, Etsy, and many more.
For access to the full reports and all our research reports, you can become a Speedwell member here.
Stay tuned, many new changes to elevate the service are coming soon!