Why do you like Mercado Libre, Lucy Chou (Luna Partners)?

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Feb 19, 2025

Lucy Chou, co-founder of Luna Partners and a value investor using a modern framework, explains why she built her own firm and how she researches companies. She breaks down her four business-model categories and why MercadoLibre became a top conviction. Expect discussion of behavioral factors, portfolio construction, and why management and local moats matter.

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INSIGHT

Value Investing With Modern Modifications

Luna Partners practices value investing with modern modifications to improve repeatable outcomes.
They add a four business model framework, diverse sourcing (including Reddit and documentaries), and behavioral finance to classic fundamental analysis.

ADVICE

Use Market Behavior To Time And Size Positions

Incorporate behavioral finance into investment decisions to account for how other market participants price assets.
Use quantitative momentum and qualitative underwriting views to size or time positions when market sentiment is adverse.

INSIGHT

Four Business Models Guide Stock Selection

Luna filters opportunities through four business model categories: compounders, shooters, cyclicals, and transformers.
They favor compounders and shooters and treat cyclicals/transformers as higher-risk, higher-return with higher conviction thresholds.

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Lucy Chou started her partnership Luna Partners recently. We invited her to discuss her investment philosophy and why she is invested in Mercado Libre.

We have discussed the following:
00:00 Episode overview
01:05 Introducing Lucy Chou & Luna Partners
02:10 Why did you start an investing firm?
05:00 What differentiates Luna Partners?
08:30 Staying sane
10:10 Luna Partners’ goals
12:35 Lucy Chou’s long-term vision
14:00 The importance of relationships
17:46 Join Good Investing Plus
18:30 „Value investing with a twist“
22:25 Examples for transformers, cyclical, shooters & compounders
23:30 Lucy Chou’s Research process
24:35 Investment mistakes & process changes
31:20 Mercado Libre
36:30 Why MeLi among all other e-commerce platforms, Lucy Chou?
40:00 Thoughts on the financial side of Mercado Libre
44:30 Analyzing management
46:45 Lucy Chou on Portfolio construction
50:37 Closing thoughts
51:47 Thank you
51:55 Disclaimer

goodinvesting #mercadolibre #meli

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