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The week's question
In March 2025, in the thread "Re: OT, out", Umm asked the members: "Do you think it is because America is made up of magical soil that makes businesses based in America magically profitable?" This week it is put to everyone again. The button below opens the small thread re-asking it - read what others have said so far, then give your own answer as an ordinary reply.
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Investment Strategies / Falling Knives
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Author: Lear ✧  😊 😞
Number: of 1198 
Subject: Re: NVDA and MELI
Date: 05/09/26 12:42 PM
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No. of Recommendations: 4
MELI reported down 13% after reporting earnings. I added to my position.

The risk here is the lending business -- do you trust their e-commerce platform + internal analysis to create a healthy loan book, through thick and thin? It's worked so far, with very high NIMAL (lower this quarter, but still 17%(!)) arising from giving the underbanked access to credit. But they're also getting more aggressive, including via a expansion in the issuance of credit cards to riskier consumers (with the risks effectively subsidized by their e-commerce & advertising gains).

If it works, you're looking at gaudy growth numbers in the business that will result in sizeable profits once the accounting noise and logistics investments settle. GMV was up 36% on an FX-neutral basis. Cost of shipping in Brazil decline 17%. Growth in items sold in Brazil accelerated (56% in brazil, 47% total). Ads revenue up 73%. Delivery speed up substantially.

I am on board with management, who I view as very comfortable antagonizing the short term money because they're busy building a business.
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