Investment Thread

Jeffrey said:
I would love for someone to challenge any part of my theory. I strongly believe NU is an excellent example of an inefficient market. Was NU’s IPO grossly overpriced? Is NU grossly underpriced now? NU’s stock price has increased less than 24% over the last 5 years. How have NU’s metrics performed during the last 5 years? What major goal has NU failed to execute on during that period? How could NU have realistically performed better during that period?
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A couple graphs supporting my argument…
 

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Jeffrey said:
NU has prudently decided to brand very differently in the US. In Brazil, NU spent very little branding and relied mostly on referrals. I believe US marketing is as much about Wall Street as Main Street.

I would love for someone to challenge any part of my theory. I strongly believe NU is an excellent example of an inefficient market. Was NU’s IPO grossly overpriced? Is NU grossly underpriced now? NU’s stock price has increased less than 24% over the last 5 years. How have NU’s metrics performed during the last 5 years? What major goal has NU failed to execute on during that period? How could NU have realistically performed better during that period?
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Thanks mods. My last post was filled with even more typos than I'm usually prone to make.

OK let me try this again.

I'm asking questions because I don't know the answers. Did Nu have a lot (or any competition) in it's home and other markets? Is it's success a result of being a first mover or being better than the others. The U.S. market has a ton of competitors but as seen in the past 10+ years people can flock to a newer entrant if it makes life easier. CashApp is a good example of something that basically come out of nowhere and established itself with two growing demos virtually ignored by incumbents. Can Nu do the same? Is it primarily targeting South American expats and their families here? What is the beachhead that they are trying to establish in the US market. Is there demand and growth potential beyond that. What makes them unique verses they others?
 
Kdogg said:
Thanks mods. My last post was filled with even more typos than I'm usually prone to make.

OK let me try this again.

I'm asking questions because I don't know the answers. Did Nu have a lot (or any competition) in it's home and other markets? Is it's success a result of being a first mover or being better than the others. The U.S. market has a ton of competitors but as seen in the past 10+ years people can flock to a newer entrant if it makes life easier. CashApp is a good example of something that basically come out of nowhere and established itself with two growing demos virtually ignored by incumbents. Can Nu do the same? Is it primarily targeting South American expats and their families here? What is the beachhead that they are trying to establish in the US market. Is there demand and growth potential beyond that. What makes them unique verses they others?
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You both are much more under-the-hood savvy investors than I am and, of course, Jeffrey has suggested he was in this business.

When NU popped up on my radar from Buffett and on this thread, I looked into them and my basic thesis was this: successful digital banking disruptor in a a major-emerging market with an expensive traditional banking system. Strong customer growth and leap-frogging into other regional markets. The pivot to the US is super interesting and I think they are primarily looking to benefit their increasing preferred bank of choice in LA to capture what I believe is a nearly $200B US / LA remittance market. I'm sure they'll look for other selling points but that's a powerful entry into the 60M US LA population, and represents pretty clear growth opportunities, IMO.

I've been paying attention to their quarterlies and while I am in no way shape or form a financial sector expert (or have even worked in the financial sector), they appear to be delivering on that hypothesis...

That's my story and I'm still sticking to it.
 
bundabergdevil said:
You both are much more under-the-hood savvy investors than I am and, of course, Jeffrey has suggested he was in this business.

When NU popped up on my radar from Buffett and on this thread, I looked into them and my basic thesis was this: successful digital banking disruptor in a a major-emerging market with an expensive traditional banking system. Strong customer growth and leap-frogging into other regional markets. The pivot to the US is super interesting and I think they are primarily looking to benefit their increasing preferred bank of choice in LA to capture what I believe is a nearly $200B US / LA remittance market. I'm sure they'll look for other selling points but that's a powerful entry into the 60M US LA population, and represents pretty clear growth opportunities, IMO.

I've been paying attention to their quarterlies and while I am in no way shape or form a financial sector expert (or have even worked in the financial sector), they appear to be delivering on that hypothesis...

That's my story and I'm still sticking to it.
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That was my thinking too. If you already have a relative with NU in another country it might incentivize someone in the US to also signup and maybe bring their whole relationship over. In a past timeline I could see new immigrants continuing using them too. The remittance market is very large but it’s gotten extremely easy and cheap to send money overseas. Going down to a Western Union has become very limited and mainly for people using cash. Xoom (a division of PayPal) is free and all digital. I can send up to $10,000 to India by just knowing the receipts UPI number. Super simple. Is that’s Nu US beachhead. It would make sense. It seems a steady but low margin business. Maybe as more people onboard it can make money elsewhere. I really have to look into what its US offerings are (car loans? home loans? deposit accounts?)
 
Kdogg said:
I'm asking questions because I don't know the answers. Did Nu have a lot (or any competition) in it's home and other markets? Is it's success a result of being a first mover or being better than the others. The U.S. market has a ton of competitors but as seen in the past 10+ years people can flock to a newer entrant if it makes life easier. CashApp is a good example of something that basically come out of nowhere and established itself with two growing demos virtually ignored by incumbents. Can Nu do the same? Is it primarily targeting South American expats and their families here? What is the beachhead that they are trying to establish in the US market. Is there demand and growth potential beyond that. What makes them unique verses they others?
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NU knowingly and intentionally created their own unique path based on their unique purpose. Banking traditionally focuses on the big wallets. NU focused on the unbanked little wallets. For example, over 30 million people received their first credit card from NU. In the US, NU’s biggest competition will not be money center banks, it’ll be non-profit credit unions.
 
bundabergdevil said:
You both are much more under-the-hood savvy investors than I am and, of course, Jeffrey has suggested he was in this business.
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FWIW, I think the greatest downside of the massive passive investing expansion is lack of prudent price discovery. I suspect AI will enable lazy investors to become even lazier. I’m very thankful for the opportunities this should avail.

bundabergdevil said:
When NU popped up on my radar from Buffett and on this thread, I looked into them and my basic thesis was this: successful digital banking disruptor in a a major-emerging market with an expensive traditional banking system. Strong customer growth and leap-frogging into other regional markets. The pivot to the US is super interesting and I think they are primarily looking to benefit their increasing preferred bank of choice in LA to capture what I believe is a nearly $200B US / LA remittance market. I'm sure they'll look for other selling points but that's a powerful entry into the 60M US LA population, and represents pretty clear growth opportunities, IMO.

I've been paying attention to their quarterlies and while I am in no way shape or form a financial sector expert (or have even worked in the financial sector), they appear to be delivering on that hypothesis...

That's my story and I'm still sticking to it.
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NU will not attempt to change banking basics. NU will focus on becoming their customers primary financial institution and cross-sell as many products and services as possible. NU is rather unique in starting with credit cards instead of checking accounts. NU is also rather unique with their decision to partner in another industry to put NU branches in their customers hands. NU’s strategic plan is frequently misinterpreted because it’s unique.
 
Specific to our NU branding conversation……


Not mentioned but I continue to strongly believe this is as much about Wall Street as Main Street.
 
Jeffrey said:
NU knowingly and intentionally created their own unique path based on their unique purpose. Banking traditionally focuses on the big wallets. NU focused on the unbanked little wallets. For example, over 30 million people received their first credit card from NU. In the US, NU’s biggest competition will not be money center banks, it’ll be non-profit credit unions.
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See I think it will be CashApp (owned by Block) and Chime. Both are targeting the same social-economic demographic and younger people. They also don't target big wallets but those people also uses them (well CashApp anyway) because people they need to pay do. I looked at Nu as the CashApp of Latin American which is a great business to have. In Latin America it's a disruptor. In the US, we already have those disruptors. So Nu is trying to disrupt the disruptors or trying to make the pie bigger or both? It's going to use it's links to Latin America to target that demo but will that be enough for growth? It seems like the low hanging fruit. How will it target other people in the US? Most of these are long term questions (because I'm buy and hold). For the short term I don't really see a downside except the cost of aquiring customers. If it's like CashApp that might have been low in it's home market fueled by word of mouth. A stadium deal seems like a pivot and a sign that US customer acquition might be more costly.
 
Speaking of NU (and some other positions), I’m thinking about picking up some more with the current downturn.

I tend to think this war is going to go on for a bit so chances certainly for more general pressure but still looks good.
 
Entered a position on NU at $14 after spending a couple of hours on this thread and on my own internet research.

Jeffrey is a crackerjack stock picker and has had some amazing calls in the past.

I rarely invest outside of blue chips, so it is fun, if that is the right word, to try out something that is not in the same league as AAPL, JPM etc.
 
Edouble said:
Entered a position on NU at $14 after spending a couple of hours on this thread and on my own internet research.

Jeffrey is a crackerjack stock picker and has had some amazing calls in the past.

I rarely invest outside of blue chips, so it is fun, if that is the right word, to try out something that is not in the same league as AAPL, JPM etc.
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Here’s hoping Jeffrey is right! I just more than doubled the number of NU shares I own.
 
Kdogg said:
See I think it will be CashApp (owned by Block) and Chime. Both are targeting the same social-economic demographic and younger people. They also don't target big wallets but those people also uses them (well CashApp anyway) because people they need to pay do. I looked at Nu as the CashApp of Latin American which is a great business to have. In Latin America it's a disruptor. In the US, we already have those disruptors. So Nu is trying to disrupt the disruptors or trying to make the pie bigger or both? It's going to use it's links to Latin America to target that demo but will that be enough for growth? It seems like the low hanging fruit. How will it target other people in the US? Most of these are long term questions (because I'm buy and hold). For the short term I don't really see a downside except the cost of aquiring customers. If it's like CashApp that might have been low in it's home market fueled by word of mouth. A stadium deal seems like a pivot and a sign that US customer acquition might be more costly.
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We definitely disagree. I don’t think NU USA’s primary focus will be fee income. I think and hope it’ll be loan income (mostly unsecured credit cards).
 
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