I cover payments and have the opportunity to add internet. Would love to get a thread going on what people like/don't about internet (maybe beyond the w/w data driven moves). Could be totally wrong view, but feel like vast majority of these names outside of the big guys have declining terminal value/not the best businesses?
what types of theses do you find yourself writing up for core longs/shorts (those you'll own for ntm)? thanks!
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who cares about business quality? stocks aren't businesses.
long the charts that will beat earnings and catch AI tailwinds, short the ones with weak charts that will miss.
As a mini internet guy, what drives your theses other than easy/tough comps and accelerating/decelerating data?
Is there any actual fundamental analysis or interesting work behind 12 month theses in internet? I’m genuinely curious as I don’t come from TMT background - thanks!
that is really all that matters. the second a "quality" business like amazon misses earnings, investors will come out with reasons why its a bad business. the second a "mediocre" business like yelp or ebay beats earnings, investors will find reasons to buy them and justify why they are great. focus less on quality because in internet nothing is permanent and it is just a data/number game.
Do any non college kids want to actually answer the question in thread
Is there any way I can come work for you? Or at least where I can find other shops with this mindset? My experience speaking with funds is that there's such a myopic focus on "value" and "quality" (whatever that means) rather than underlying market structure, positioning and the chart itself.
I completely understand the idea of having a long-time horizon to let the business cycle play out and thus for the cream of the crop "quality" names to rise. But that seems like such an inefficient and frankly wasteful way to view markets for an HF. How can one spend years digging for treasure in the form of niche "small-cap value" names when there's momentum ripping everywhere else?
I suppose the idea is again that such quality names will prevail when the inevitable bear cycle begins and the previous momentum leaders are zeroed but still don't see how someone comes out ahead with such a mindset.
This is literally just 80% of pods. The momo is just “hedged”
Let's swap because I'd love to talk to funds with this supposed "myopic" focus on value and quality lol.
There’s a lot of verticals within internet — it depends on how you slice it. Internet is primarily juxtaposed vs legacy, with hyper competition intra-vertical (Uber vs. Lyft). Verticals include e-commerce, adtech, digital media (streaming, social/ad network, and gaming), mobility/delivery, etc. and they all have their unique tailwinds/headwinds that’s embedded in todays bets. I recommend utilizing a coverage approach and initiating on the idio (intra vertical performance differentials) first, and then identifying the catalyst you think will drive an inflection. For names “on track” or consistently surprising, you can surf momo through a spread, but would avoid what the other longshortequity guy says about buying momo only. If you’re at a place with decent risk then you should be aware of the short term reversal factor… (take a look at how quick semis dumped in July).
FOMO, MOMO, YOLO... OHNO!
Internet is super fascinating IMO but that's just a personal interest, broadly speaking and echoing the above, it covers a broad range and there's many sub-verticals that you can include/focus on. Valuations wise you're looking at MAU, MUV, CCR, ARPU, etc. and really dividing deep into the operating model. Annoying thing is that there's no one-size fits-all approach and also depending on the vertical, they might rely heavily on consumer trends or the macro-economic environment, etc. If it's a big legacy name then much easier to form an opinion since they've been operating long enough on the market and provide enough data to formulate a consensus. For newer names with unique business models, its more difficult to accurately project and you need a strong thesis to support your position, which often hinges on a trend or something speculative rather than data-driven results.
covering internet is just trading alt data on daily basis
elaborate please
in that sectors like industrials or materials have less frequent altdata then it becomes trading monthly/quarterly altdata miss/beats instead of daily Yipit. Not entirely true but this is where most of alpha is generated, not in 12 month theses because while you can develop a 12 month thesis, the state of the industry changes is just too dynamic that within 2 months your thesis is already adjusted for a new unit/ASP vector or margin mix. Not like industrials / mats where the same bet is on supply/demand, marginal cost curves, incremental/decremental and incentive pricing.
Understood but any takes on the questions in the prompt? Examples of longs shorts looking out 12+ months? Like doesn’t everything in e-commerce have an AMZN share loss bear case (that’s honestly probably true)?
plot AMZN vs ebay/etsy/whatever and see what that looks like
and then imagine if you're down 10% in that pair in 3 days what do you do in a pod model
momomoommom YIPITTT mscience
comp the comp the comp
ramadan early?
Don't forget number of days between Thanksgiving and Christmas compared to last year. Huge thesis driver.
Can any internet pod guys speak to what they look for in core internet longs (things you own 100+ of and like over the ntm)?
.
What does that have to do with internet dude lol
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