“We believe we still have a significant amount of unrealized value in these businesses as well as in real estate, solar tax equity, and other major ventures.”

I have been invested in Nelnet since the beginning of 2021, making it the longest-tenured holding in my portfolio (I am 29). My hope is to hold Nelnet not just for five years, but 50, and even in perpetuity long after I pass.

It can be our Berkshire Hathaway.

Who wouldn’t want that?

Comparisons to Berkshire Hathaway create tension. Buffett is the top dog for a reason, and trying to say your small-cap is the next legendary conglomerate can elicit eye rolls. Don’t tell them the business is also located in Nebraska. Are they just cosplaying Berkshire for fun?

In the case of Nelnet, I think it does have the culture, track record, and size to generate returns similar to Berkshire. If one can actually find the next Berkshire, you are setting up a trajectory for 1,000x returns over the next three to four decades, with a low risk of ruin. All you have to do is keep buying and never sell.

Again, I will ask readers: who doesn’t want this?

In this full introductory research report, subscribers to Emerging Moats Stock Research will receive:

• A history of Nelnet

• Segment overview

• Idiosyncratic leadership

• Monetizing hidden value

• Is there an emerging moat?

• My investment decision

A long and winding history

Read more

So, here you go.

Rambling thoughts on SpaceX and the state of the Elon Empire.

SpaceX is planning to go public at a $1.8 trillion valuation, selling $75 billion in stock to fund orbital data centers and a ~Mars colony~. 30% of the $75 billion — $22.5 billion — is expected to come from retail investors. The cult of the empire apparently has deep pockets nowadays.

The space/connectivity business is good. Nobody should pretend it isn’t just because you don’t like Elon’s antics. Elon wants you to forget about launch costs when analyzing the Starlink segment (63% adj. EBITDA margins!), but that is not what an objective observer would do. There is no such thing as a free launch.

If SpaceX were forced to buy a Starlink launch from a third party, it would incur real costs of revenue.

Combining the Space and connectivity businesses makes sense if the goal of the space segment is to send SpaceX's internal payloads into orbit. That way, you get the true economics of the rocket launch and the services associated with it.

$15.5 billion in revenue in 2025, up from $7.4 billion in 2023. Combined EBIT/operating income of $3.8 billion. That’s it.

For round numbers, let’s say $10 billion in EBIT is well within sight over the next five to ten years. A vertically integrated rocket launch and satellite network is not cheap to build, which is why the combined capex was $8 billion last year.

$15.5 billion in revenue. $8 billion in capital expenditures. Not exactly FICO or Visa.

Capital intensity should lower your expectations on intrinsic value. A high-quality business is one that can durably generate cash that can be returned to shareholders. SpaceX is not that, and I don’t think it ever will be?

Yes, sure, it will always be cooler than FICO.

Cool does not generate excess cash flow to be redistributed to shareholders.

No matter what the tech bro media ecosystem tells you — and they will tell you their opinion on anything if it means a potentially marking up of their bags before dumping them on the public — SpaceX is not a monopoly for much longer. If we are going to value SpaceX stock on a time horizon of a one-million-person Mars colony (Musk’s goal, not mine!), then the next few years do not matter. And a few years from now, its monopoly on large payloads will have ended. If Blue Origin and Firefly continue to flop around, that’s fine; you still have Rocket Lab and its Neutron rocket coming around the bend.

I am guessing that customers like Amazon, Leo, AST SpaceMobile, or any other Starlink competitors will want to fly on other rockets, if possible, especially after SpaceX crowded out the market with its own payloads for years, creating the current bottleneck waiting to be unleashed (and making everyone mad). Starship gives them a slight leg up in size and will help them efficiently send satellites/computing racks into orbit, but in practice, it is not much larger than New Glenn or Rocket Lab.

SpaceX is a good business because of Starlink. Starlink may turn out to be a great business one day. But is it a business worth more than a few hundred billion, even if we sprinkle in some Musk pixie dust? I think not. The path to $10 billion in annual free cash flow will be treacherous.

But sure, let’s dump this onto retail at a market cap of $1.8 trillion. Lovely. I am sure this will cool the populist flames if the stock rolls over and the $22.5 billion in retail capital gets wiped out.

Space and Connectivity are not the entire business, though. Who could forget the intense negotiations between Elon Musk and Elon Musk over SpaceX's acquisition of xAI for $250 billion earlier this year?

The AI/Twitter/X business is ugly. The financial media seems to be underrating the fact that it may bring down the entire Musk empire. It is that bad. Boy who cried wolf, yeah, yeah, but this is a real turd, stop looking at it with Elon-tinted glasses.

The financials are way worse than I thought, and I have personally been replying to every Bill Ackman tweet with “@Grok, is this true?” to spitefully waste compute resources.

Make sure to look at these charts properly. xAI (meaning SpaceX) is a massive loser in AI. In Q1, it generated $818 million in revenue and spent $8 billion on capital expenditures just for the AI division. Some are claiming the Anthropic deal of $1.25 billion in monthly spend as a white knight, but that is a flimsy contract that can be ended whenever Anthropic wants (and they will end it and go to Google Cloud and AWS eventually).

Also, please stop and think for a minute. xAI spent a gajillion dollars to build its own data centers on Earth, yet it is already begging its direct competitors to use them. And we are now going to build these in space within the next few years, justifying a 100x P/S ratio?

The IPO isn’t even the main event. Wait, what could be bigger than this?

Everything is being set up to merge Tesla and SpaceX. We have been talking about it all year. It almost has to happen unless SpaceX can keep raising capital ($75 billion will only cover a few years of burn). We just saw the next step in this process, with “leaks” dropping to financial news outlets about “discussions” over a Tesla and SpaceX merger. I wonder who would want that narrative to start building!

CNBC notes there may be “concerns” among shareholders of the two companies regarding a merger. Either I am very confused, or this was a nice bit of humor from a financial news outlet.

I guess Neuralink is now allowing Elon to negotiate with himself. Interesting. Maybe we can add a $1 trillion valuation to that as well.

I, for one, cannot wait for the fireworks to happen. It will be $3 trillion of a mess of companies. Optimus. Cybercab. AI data centers in space. Twitter. Grok. Starship. Financial incentives for a Mars colony. Cash burn you wouldn’t believe.

My bet is to short EchoStar stock as a SpaceX proxy heading into the IPO. It is heavily indebted garbage and will likely be screwed over, as most Elon counterparties are, giving it a good risk/reward skew over the next few years.

I could not care less if SpaceX stock jumps on the day of the IPO. The next few years are going to be a slow burn as insiders dump everything on retail.

If you were to conjure up a blow-off-top for the AI bubble, you couldn’t script it any better.

Good luck to all.

-Brett

Today, I bring readers an update on Sprouts Farmers Market.

Below is the upcoming schedule for Emerging Moats. Reports include Nelnet (full research report), Grupo OMAB (quarterly update), and Wix (quarterly update) in the next three weeks.

I have made my writing plan for July, which you can see below. An overdue introductory report on BBB Foods is in the works. These are subject to change for any emergency posts, but I want to generally adhere to the schedule since some paid readers churn on and off for a month at a time. Switching up the entire writing plan a week before would amount to rug-pulling you.

Also, expect periodic trading updates. All trades will be disclosed before I make them, and are for paying subscribers only.

Owning uncorrelated assets is beneficial. Plain and simple. Besides diversification advantages, it allows you to shift your portfolio to optimize after-tax returns, provides buying opportunities at all times, and can maximize absolute returns through the cycle. A year like 2026 may trick people into thinking the last point is incorrect (you need to chase the current hot thing or risk being left behind!), but this does not ring true through bear markets. Let the growth-at-any-price investors who drew down 80% in 2022 tell you firsthand the downsides of going all in on the hot thing of the moment.

You might wonder why I cover Sprouts Farmers Market – a grocery store concept – in a newsletter that focuses on emerging moat opportunities. Sprouts does have an underappreciated moat, but it is the stock’s uncorrelated or even inverse correlation to the US-AI bull market that makes it doubly fascinating to follow. Just as its health-focused grocery concept is a counterweight to big-box brands, its stock can be a nice counterweight in a growth-focused portfolio.

I have noticed that Sprouts and Philip Morris International generally trade in the opposite direction to the US indices. If Nvidia is up, Sprouts is down. I learned how beneficial this can be a year ago when rotating a soaring Philip Morris International into Airbnb and IBKR during the tariff tantrum. It was, without a doubt, my best trade of the year.

I could see the same happening to Sprouts one day. The stock remains off 52% from all-time highs, reporting what looked like sluggish Q1 results. Analysts are laser-focused on next quarter’s comp sales and the impact of inflation in 2026. I think we had three questions on the earnings call about whether fuel would have a 20-basis-point or 15-basis-point impact on gross margins this quarter. You know, the important stuff.

My analysis remains focused elsewhere: whether Sprouts can maintain its high return on invested capital (ROIC) and the size of its reinvestment runway. Add in capital returns, and the simple puzzle of valuing Sprouts Farmers Market stock is complete.

On this update, I will cover:

• Lapping a strong 2025

• A simple long-term growth algorithm

• Is there still an emerging moat?

• My investment decision

Lapping a strong 2025

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As I mentioned in my newsletter on Oscar Health, I am making some trades today:

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The largest winner for Emerging Moats has been Oscar Health. Up 104% since the end of March, the health insurance disruptor posted its earnings on May 6th, keeping its stock moving up and to the right in a trance-like line. Whatever Wall Street and the short-term pod shops were looking for, Oscar Health delivered.

Here is what I wrote on Oscar back in late 2025:

“My thesis is simple: 2025 is a temporary blip for Oscar Health’s MLR. Over the next decade, it has a clear path to MLR stability, improved operating leverage, and market share gains, which should provide the stock with upside in 2026 and the potential for ten-bagger returns over the next decade.”

The company is beginning to show us that it is executing on this thesis (scale, operating leverage) at a much faster pace than I assumed. Fears about the destruction of the health insurance market have proven overblown, providing management the opportunity to shift from defense to offense. The growth runway in the individual payor market is massive. Oscar Health remains the clear candidate to steal share.

A classic Peter Lynch stock.

In this update, I will cover:

• Why the stock finally got unstuck

• Remaining growth tailwinds

• Is there still an emerging moat?

• My investment decision

• Portfolio Update + addendum on Gambling.com Group

Why the stock finally got unstuck

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Upcoming schedule: Holiday week, Oscar Health, Sprouts Farmers Market.

“For the last year we’ve been experimenting with this send now, pay later idea, which is the short-term liquidity loan. We’ve had a very, very strong signal. This is a killer idea, we think. Customers have told us that the use of a card is extremely valuable. We’re wrapping up a number of ideas under this card construct, which obviously are gonna help the economics and allows us to really simplify how we go to market with this. Remember that the send now, pay later is an invite only. The customer’s already sent once on Remitly. We know some stuff, so we think it’s a very interesting product.

The signals of all the testing over the last year are very good. We see that launch as quite a lot of potential. We’ve obviously got a long list of things that we’re gonna add to a card to make it, you know, to make customers use it and loyalty, and you can imagine all the things that we can add to a card. It is U.S.-focused first. We’re doing it with the bank partnership. Our ambition is to make this global. As of right now we’re gonna go for the next few quarters with a U.S. launch only.” - Sebastian Cunningham, Q1 2026 Conference Call

Remitly Global is up 79.5% in 2026, as of this writing, before the market opens on Thursday, May 7th. It currently accounts for 12.3% of the Emerging Moats portfolio, which is 99% of my invested savings.

I wrote one of my first paywalled Emerging Moats updates on Remitly in late November of last year. As of this writing, I have removed the paywall, meaning anyone can read the report in order to see my thoughts at the time. The style of my writing and the formatting of the weekly updates have improved since then (nothing like a paywall and recurring revenue to motivate quality improvements), but my thoughts on the business are the same.

Remitly just posted Q1 earnings. These are the first earnings for new CEO Sebastian Cunningham, who has also publicly discussed his plans for the business at recent investor conferences. Long story short: Cunningham and the executive team believe there is still an immense growth opportunity ahead.

In this article, I will be covering:

• Q1 2026 Earnings

• New management perspectives

• Product acceleration and business opportunity

• Is there still an emerging moat?

• My investment decision

Q1 2026 Earnings

Remitly had all-around stellar results in the first quarter. Turns out stablecoins, AI, and immigration headwinds have not killed the business. Shocker. In fact, as I have argued many times, these are actually tailwinds.

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Today, Emerging Moats subscribers receive a comprehensive research report on Nu Holdings. Below is my plan for the upcoming release schedule, along with some of my latest newsletters. In the middle of the year, I will produce a (free) guide on what I have covered so far in my first year and my plan for the rest of 2026.

“Let me now turn to how we’re thinking about 2026. As we enter 2026, we see this as an inflection year, the year we begin transitioning from a Latin American leader to a global digital banking platform. Our priorities are organized around three pillars. First, winning in our core markets…” - David Velez, Q4 2025 Conference Call

My brief experience with legacy banks in Latin America could be a short case study in how to drive someone insane. ATMs that charge ridiculous fees on withdrawals that barely work, have low withdrawal limits, and may not even give you cash but still debit your bank account (yes, this actually happened to me once). Every time you go to one of these branches, there are long lines of customers out the door, wasting their day away, waiting to get fleeced.

Luckily, our friends at Visa and Mastercard allow one to travel without interacting with these borderline criminal institutions, most of the time.

I can’t imagine as a local dealing with Banco Colombia, Santander, or the other stodgy banks on a regular basis. David Velez couldn’t either and decided to change the course of the banking industry in Latin America. Velez, of course, is the founder of Nu Bank (or Nu Holdings, or just Nu).

In 2013, Velez launched Nu Bank as a fee-free credit card available through a mobile app in Brazil. Just over a decade later, Nu Bank has grown to a full-fledged bank with 131 million total customers across Brazil, Mexico, and Colombia, with plenty of room to grow within its existing markets and through planned geographical expansion. It has rapidly grown to one of the largest consumer banks in the world and is currently one of the largest companies by market cap in Latin America.

But how? And why is this stock so intriguing to me at Emerging Moats? Today, we put the puzzle pieces together.

Readers of this report may also be interested in a semi-competitor to Nu Bank, MercadoLibre, which I covered four weeks ago.

In this research report, I will be covering:

• Nu Bank’s story and product evolution

• Current market opportunities (Brazil, Mexico, Colombia)

• Uncertain expansion plans

• AI as a superpower?

• Betting on a founder

• My valuation model

• Is there an emerging moat?

• My investment decision

• Portfolio update

Nu Bank’s story and product evolution

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“The market cap at my cost basis was $71.5 billion, or less than 15x 2025 operating income. Today, we sit at a market cap of $128 billion, or just under 27x 2025 operating earnings. Not exactly a fire sale, but nowhere near a price where I would consider trimming solely on valuation. That would be closer to 50x-60x bull-market operating earnings, or a double from here.” - Interactive Brokers: Changes Brewing

I think about Nomad’s investment portfolio far too often. Amazon, Costco, and Berkshire Hathaway. Nothing more. Buying and holding these three stocks brought forth one of the best track records of the 21st century, and anyone could have copied them.

Is it really that simple? If one picks the correct stocks utilizing something like Nomad, one can beat 99% of investors by sitting at the beach while they stay at home and overtrade.

Who doesn’t want that?

The key is finding companies with increasing competitive advantages at scale (or, as you might say, an emerging moat) trading at a reasonable price. I believe I have 4-5 candidates within this framework – all existing holdings – that I could turn into a Nomad-style concentrated portfolio in a market downturn.

Which brings us to this week’s newsletter on Interactive Brokers. The trading platform is one of my favorite Nomad-style businesses that keeps separating itself from the competition through scaled-economies driven low prices, increased asset tradeability, and a culture of innovation.

Where I wrestle with the investment is balancing my love for the business and the stock’s current earnings multiple. When more money gets deposited into my brokerage account (at IBKR, of course), I have to decide whether to add to my position or keep diluting it down as a % of my assets. Hard decisions when the stock is up north of 100% over the last twelve months and trading at a P/E ratio pushing 40 on bull-market earnings.

In this quarterly update, I will cover:

• Q1 2026 Earnings

• The state of the prediction markets push

• Is there still an emerging moat?

• My investment decision

• Portfolio Update

Q1 2026 Earnings

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Next three weeks: Interactive Brokers (quarterly update), Nu Holdings (full research report), Remitly Global (quarterly update)

“The budget from the United States Navy on UUVs is small today – mainly focused on research. Australia has been at the forefront of the industry, signing its recent deal with Anduril. You could sense the passive aggressive tone from Anduril in the press release telling the US Navy it needs to get its act together and start building up its UUV inventory.

An inflection may be coming. Budget proposals have called for increased spending on UUVs, and while we don’t need to bore readers with the back-and-forth of reconciliation bills, what is important for Kraken Robotics is the long-term trend going higher.”

This quote is from my initial Kraken Robotics research report, published in September 2025. My belief at the time was that Kraken’s role as the premier battery supplier for underwater drones offered it a path to significant revenue growth. A premium valuation kept it on the watchlist, but I remained intrigued.

Interim events have proven the need for new defense technologies if the United States wants to maintain its role as the guarantor of global trade (for the sake of the global economy and the tens of millions who could starve to death in Africa and South Asia, I hope they do). This should lead to a sense of urgency around underwater drone contracts, meaning Kraken customers must procure subsea battery supply, and quickly.

At the same time, Kraken’s stock is up 77% since my initial research report, and it just announced a merger to consolidate its position as the key technology provider for the subsea defense market. This makes now, the day after its Q4 2025 earnings release, a perfect time to update readers.

In this quarterly update, I will cover:

• Proven importance on the battlefield

• Going all in on subsea technology

• Q4 2025 earnings

• Is there still an emerging moat?

• My investment decision

Proven importance on the battlefield

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Next Three weeks: Kraken Robotics (quarterly update), Interactive Brokers (quarterly update), Nu Holdings (Full Research Report)

“Yeah. I think you need to kind of take two lenses on that. Our referrals from LLMs are up substantially, you know, quarter-over-quarter, and that’s something we expect to see going forward. So that’s a positive trend. You know, on a macro lens, it doesn’t appear yet that that’s eating at Google at the moment. The issues we’re seeing are more so with Google itself, and as we noted, that November ranking rebound has not quite persisted. With Google, there’s two core challenges. One is offshore spam. This is particularly in international markets, this channelization issue due to kinda overly burdensome regulations. And two, negative SEO attacks, which is something we haven’t really discussed before. These are both unique to online gambling with search.” - Q4 2025 Conference Call

Catching falling knives requires buying knowing pain is to follow. It is close to impossible to time the bottom, meaning that, more likely than not, buying a stock that has fallen 50% will lead to another 20% drawdown. Expect this going in or else you will be disappointed. It can also make you look stupid for a short while (people hate looking stupid).

What is sacrificed in the first six months can be made up for over the next three years (or ten), as long as your thesis is correct on the business. Mr. Market is generally focused on the next few quarters, if not a shorter time horizon, giving individuals an edge even in the age of AI. This is why I like to fish in this pond and why I want to always invest on a multi-year time horizon.

The first few quarters after buying a falling knife are the most crucial, and the most risky. A stock does not fall 60% without reason. It is the investor’s job to determine whether this drawdown is due to a temporary disruption or a permanent impairment, meaning you might have to cut bait only a few months after buying in order to save yourself from a 50% loss. Never buy more until the stock starts working. I learned that the hard way.

We are at this moment for Gambling.com Group. The gambling marketer and data provider is down 27% over the last three months and 67% over the last twelve months. Brutal. Definitely a falling knife with a narrative taking hold that it will be an AI “loser” due to its reliance on Google Search results to feed its affiliate websites that make up the majority of revenue today.

As I will discuss behind the paywall, this narrative doesn’t tell the full story. My job is to determine whether the company can get back on the right footing and whether the stock looks attractive at a measly market cap of $137 million.

In this quarterly update, I will cover:

• AI headwinds, but different from what you think

• Subscription revenue opportunity

• Capital allocation priorities

• CEO transition

• Is there still an emerging moat?

• My investment decision

AI headwinds, but different from what you think

63% of Gambling.com Group revenue came from performance marketing in 2025:

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Next three weeks: Gambling.com Group (quarterly update), Kraken Robotics (quarterly update), and Interactive Brokers (quarterly update).

Another MeracdoLibre report? Yes, another MercadoLibre report. While this is the first time I have written about the company in detail, there are approximately 8,000 newsletter write-ups on the “Amazon of Latin America,” circling around the internet.

My philosophy at Emerging Moats is to provide readers with value they cannot find elsewhere. If a stock is covered ad nauseam (Nvidia, for example), I generally do not want to cover it unless there is novel analysis to provide. There’s nothing unique for me to say about Alphabet. It is much easier to provide useful analysis for readers by looking at undercovered stocks like Kraken Robotics or Gambling.com Group.

MercadoLibre is an exception this week. One, I currently own the stock, and feel the need to write my full reasons why for subscribers. Second, MeracdoLibre is trading at its lowest earnings multiple in years (chart below). Three, I believe investors are overstating the heightened competitive intensity in Mexico and Brazil and, in fact, expect this to lead to a widening of MercadoLibre’s moat over the next five years. Four, I find that most reports on the stock just summarize its huge list of products/services, call it an Amazon clone, and hit publish (thank you, AI bots, for increasing this slop by 10x). Understanding the business from an emerging moats perspective should be viewed through a different lens, which I will try to articulate below.

This report may be slightly longer than usual, but I believe it will give any reader a full understanding of what matters to MercadoLibre’s business, my thoughts on management, and why I decided to allocate 9% of my long portfolio to it as of April 3rd, 2026.

Given each region’s idiosyncrasies, I will analyze MercadoLibre by country (Brazil, Mexico, Argentina, and Other) rather than by business segment. Then, we will put everything back together to fully understand the big picture.

Thank you to the writer of CapexAndChill for helping me with edits on this one.

I will cover:

• An evolving business model (history and overview)

• Brazil

• Mexico

• Argentina

• Other countries

• Advertising potential?

• Opinion on management

• Financial model and valuation

• Is there an emerging moat?

• My investment decision

An evolving business model

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“There is no reason to panic sell because the stock plummeted. However, I am getting weary of management continuing to move the goalposts with their long-term goal of 10%+ revenue and adjusted EBITDA growth. If this keeps getting delayed, we will not see an inflection in free cash flow, and the stock price will go nowhere.

Interim delays have brought me tremendous opportunities (look at Sprouts Farmers Market’s stock chart) while also falling knives like (Match Group). I am willing to wait a few more quarters at the risk of holding a Match Group to make sure I do not miss another Sprouts Farmers Market.”

I wrote the above quotation as a conclusion to my quarterly update on Portillo’s back in August of 2025. This was written before the Emerging Moats paywall was enacted, so it remains free for anyone to read. Paywalled articles have more detailed analysis, for anyone wondering.

The stock was trading at around $7.25 at the time of publishing. Today, it trades at $5.40. Since then, there has been a strategic reset on unit expansion, an overhaul of the executive team, two more quarterly earnings, and initial guidance for 2026. So far, it is looking much more like a “Match Group” than a “Sprouts Farmers Market,” using my above analogy.

Almost everything surrounding Portillo’s is negative. I have been completely wrong about this stock, making it a big loser for me in 2025. But does that mean I am selling or doubling down on my thesis?

Subscribers to Emerging Moats already know my decision. Today, readers will get my full analysis of Portillo’s latest quarter and how I am analyzing the stock for 2026. Along with last week’s update on The Real Brokerage, this has been a time for covering some of the biggest drags in my portfolio. I am not going to be a newsletter that only discusses winners to grab empty-calorie subscribers. We all want to become better investors, and learning from our mistakes is the best way to do that.

In this article, I will be covering:

• Portillo’s Q4 earnings

• My thoughts on the rejuvenation plan

• New management and restaurant industry outlook

• Is there still an emerging moat?

• My investment decision

Portillo’s Q4 earnings

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With an 85/15 revenue split on residential real estate transactions, capped at $12,000 annually, it is easy to see why The Real Brokerage can convince agents to switch to its cloud brokerage platform: they keep tens of thousands in sales that used to go to their old broker. Evidenced by Mr. Market’s continued pessimism (the stock is down 50% in the last six months alone), there are growing concerns about whether this model works for The Real Brokerage.

Management believes this pessimism is unwarranted, that its core brokerage business could be GAAP profitable today if they chose to be, and that gross margins will improve once its new business lines, like mortgage underwriting and title insurance, gain scale:

“It’s important to understand that for a company with our growth profile and capital efficiency, profitability is largely a strategic choice. Many of our peers are currently posting much steeper losses, as you’ve seen, despite having significantly larger agent bases, which we believe validates the superior efficiency of our model. To give some context, our largest segment, North American Brokerage, was nearly break-even in the full- year of 2025. The significant majority of our consolidated loss currently reflects our ancillary businesses, where we are deliberately choosing to invest today because we believe the long-term returns will be substantial.” - Founder Tamir Poleg, Q4 2025 Conference Call

If you agree with Poleg, then The Real Brokerage stock may be especially cheap right now.

In this quarterly update, paying subscribers for Emerging Moats will receive my latest analysis on The Real Brokerage, covering:

• Growth in a dead housing market

• What about ancillary services?

• Management uncertainties

• Is there still an emerging moat?

• My investment decision

Growing in a dead housing market

Let’s take a look at the macro picture for home sales in the United States:

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A quick update on the portfolio. As always, reply to this email or DM me on Substack if you have any questions about my current thinking.

I added to the short portfolio this morning. No n…

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“During Q4 of 2025, Coupang became aware of a data incident involving a former employee that illegally accessed data from over 33 million user accounts and retained data from approximately 3,000 user accounts. Third-party cybersecurity expert firms, including Mandiant and Palo Alto Networks, have conducted a comprehensive forensic investigation and confirmed that the customer data accessed was limited to basic contact and order information: names, email addresses, phone numbers, delivery addresses, and limited order histories. Building lobby codes were accessed for 2,609 Korean user accounts. No financial or payment card data, no login credentials or passwords, and no government-issued IDs were accessed. To date, there have been no confirmed instances of any of this customer data being exploited or of any secondary harm to customers related to this incident.” - Q4 2025 Letter to Shareholders

The last few months have been interesting, to say the least, as a Coupang bagholder. Any longtime reader (or listener to the podcast) knows I have been fascinated by this company since its IPO. I remember distinctly reading the S-1 and thinking, “Damn, I need to own this.” By early 2024, the opportunity was there to strike at a dirt cheap valuation, and it has remained one of my largest positions to this day.

In late summer, I thought 2025 looked to be another banner year. Users kept growing, revenue kept compounding, unit economics looked strong, and profit margins in the core business were expanding, while reinvestment in new ventures (food delivery, Taiwan, fashion, and advertising/streaming) continued to show promise, even though it would hurt consolidated cash flow in the interim. No worries, Coupang’s core business has enough juice – along with a healthy balance sheet – to give the business optionality to invest on a multi-year time horizon. Stock peaking its head above $30? Let’s keep the party going.

By January of this year, shares had fallen 50%, wiping out most of my gains in the last two years. Panic had ensnared both the Korean public and its government, with news stories hitting the international wires that made it seem on the verge of collapse. Investors naturally decided to dump their shares without actually verifying what happened.

I believe this has ended up as a mass psychosis event for both South Koreans and the investment community. It has provided us (yet again) an opportunity to buy Coupang at a cheap valuation.

In this quarterly update, paying subscribers to Emerging Moats will read:

• Data breach psychosis

• Quarterly numbers

• Long-term growth opportunity?

• Is there still an emerging moat?

• My investment decision (and trades for the week)

Let’s dig in.

Data breach psychosis

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• Wix.com: A Hidden AI Winner Trading At 10x Free Cash Flow? (Ticker: WIX)

• Evolus: The Beautification Arms Race (Ticker: EOLS)

• Cava Group: Our Mediterranean Future (Ticker: CAVA)

Opportunities to buy high-quality businesses at a fair price – a truly fair price – are rare. As Buffett says, an investor may follow a stock for a decade before finding the right valuation entry point, testing their patience as they sit at home plate, letting pitch after pitch hit the catcher’s mitt without swinging.

Bull markets can make waiting for the fat pitch painful. It will also make you feel stupid and inferior (trust me, I’d know). But it is this patience that can make the bear markets and drawdowns that much more rewarding when said opportunities finally arise.

I have followed Adyen since 2021, but have never owned a share due to valuation concerns. It has sat on the watchlist, gathering dust.

Today, that may change, which is why I decided to pull this research report forward to early March.

The payments processor is down 66% from its 2021 highs, recently puking after a slightly disappointing 2026 revenue growth guidance, meaning you can now buy a stake in a business that has grown its revenue at 35% annually for a decade at roughly 20x pre-tax 2026 earnings.

The question is: why? Is now the best opportunity we will ever get to buy Adyen stock? Or is the current drawdown warranted because of a fundamental change to the business?

In this research report, I will cover:

• The contrarian player in payments

• A history of market share gains

• Why a customer chooses, sticks with, and grows with Adyen

• Why I like Adyen’s culture

• Competitive threats

• Is there an emerging moat?

• Financial modeling

• My investment decision

The contrarian player in payments

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“This was our highest growth quarter in more than two years. Nights and seats booked grew 10%, our strongest quarter in years. But what matters most is the momentum that we’re gaining. In a marketplace, reaccelerating growth isn’t as simple as stepping on the gas pedal. It’s more like turning a cruise ship. It takes time and discipline, and you don’t always see it from one quarter to the next. The acceleration that you’re seeing didn’t happen by accident. It’s a result of a deliberate path we’ve been on for the past few years.” - Founder & CEO Brian Chesky, Q4 2025 Conference Call

Five years after the IPO, you can feel the frustration mounting among Airbnb investors. Its share price is still down from its initial trading price, while S&P 500 Index investors have seen a total return of 100% over the period.

Founder Brian Chesky, along with the rest of the leadership team, hammers home the same talking points to investors each quarter. Geographic expansion. Product expansion (experiences and traveler services). A Loyalty program and advertising ambitions. AI Search? It’s just around the corner. We’ll get there eventually, everyone, just wait.

Look, on the one hand, I share in the frustration over Airbnb’s much-hyped expansion outside its core home-sharing business, which has so far shown little financial return. What exactly are they spending $2.35 billion in product development costs on every year?

On the other hand, its core business has a long runway to keep expanding globally, is protected by inflation, has best-in-class cash flow conversion, and a moat that can keep widening (no, I do not believe AI agents are going to kill the business). It is a wonderful asset.

At 26x EBIT, shareholders probably make out just fine despite multiple compression risks if we get high single-digit revenue growth in the core business, share repurchases, and margin expansion over the next decade.

But what if you trust in Chesky’s grand vision? If you do, then we might have a multibagger on our hands. One that – as the stock price today tells us – few investors actually believe in.

Today’s paid subscribers are receiving a quarterly update on Airbnb and my thoughts on the stock. I will cover:

• The building blocks for growth

• Can we trust the product expansion thesis? (Chesky’s vision)

• Underappreciated embedded earnings power

• Is there still an emerging moat?

• My investment decision

The building blocks for growth

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This Friday, paid subscribers will receive a quarterly update on Airbnb. The week following will be a full research report on Adyen.

Portfolio changes

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Above is the upcoming schedule (and archive) for Emerging Moats Research paid subscribers. If you want a one-week free trial, please follow and DM me on Substack! -Brett

“We do not disclose details regarding individual components, but we can say that we are working to secure stable supplies of memory components by holding discussions from a long-term perspective with our business partners. As a result, the recent rise in memory prices did not have a significant impact on hardware profitability in the third quarter. In addition, we do not expect any significant impact in the fourth quarter. However, if this rise in component prices lasts longer than expected and runs through the next fiscal year and beyond, it may put pressure on profitability. If the situation deteriorates significantly, we will carefully assess market trends and respond.” - Shuntaro Furukawa, President, Q3 FY 2026 Conference Call

I call myself a long-term investor, willing to wait years for my thesis to play out, if necessary.

Nintendo sometimes makes me rethink the sanity of this philosophy.

Holiday-quarter sales of the Nintendo Switch 2 (SW2) were strong and exceeded initial volume guidance. Revenue is beginning to swing upwards, with Nintendo deftly transitioning from one console to another while keeping customers engaged.

And yet, the stock is now in a 45% drawdown and somehow flat over the last five years while the S&P 500 has doubled. Some of this drawdown is due to factors beyond the company’s control, such as the current narrative around memory chip prices impacting profitability. Others, self-inflicted. Would it pay them to simply tell investors (and customers) your true product roadmap? Could you actually give guidance that isn’t disingenuously sandbagged?

Wall Street – or, more generally, investors focused on near-term returns – periodically grows frustrated with Nintendo’s methodical approach and secrecy. This is especially true at a time like early 2026, when energy is spent determining whether your software holdings will go out of business tomorrow. Who cares about five-year earnings estimates when AI is going to kill every business?

An advantage we have as individual investors is being unshackled from this short-termism. And while I, too, get frustrated with Nintendo management, any astute follower of the business knows it takes a simple reading of the tea leaves to understand what’s coming.

In other words, Nintendo’s stock hasn’t been this attractive since the first year of the SW1 launch. My conviction can be reflected in my latest Portfolio Update.

Let’s dive deeper into holiday-quarter earnings and analyze where Nintendo stands in early 2026. In this piece, I will cover:

• No Wall Street handholding (holiday quarter results)

• Hardware sales, then software sales, then profits

• What about memory chips?

• Is there still an emerging moat?

• My investment decision

No Wall Street (or customer) handholding

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A great business is one that generates durable cash flow that can be freely returned to shareholders. Nothing more.

Different businesses will get you to this outcome, but the outcome is always the same. It doesn’t matter if you are invested in a small aerospace parts maker, a conglomerate of airport operators, or a multinational consumer brand. Cash flow and the return of cash flow to shareholders at a reasonable price are what we should all be hunting for.

If you understand this, you should be attracted to the nicotine sector. Cigarettes are the most profitable single product category in history. Just look at the long-term total return for Altria Group. The ability to steadily raise prices alongside durable market share and low capital intensity turned Altria Group – along with the other tobacco giants – into cash flow machines. It didn’t matter if they got an enormous fine in the 1990s or set money on fire through dumb acquisitions; shareholders still made out like bandits. Eventually, business quality wins.

Today, cigarettes are being replaced with modern forms of nicotine usage. Profit characteristics look similar, and, combined with new-user adoption, there may be multiple decades of massive cash flow ahead for the brands that win consumers’ hearts and minds.

One company has taken advantage of the nicotine transition better than any: Philip Morris International. After its acquisition of Swedish Match and the Zyn nicotine pouch business in late 2022, I became interested in following the company and realized it also held a dominant position in the heated tobacco unit (HTU) space.

In 2023 - 2024, I purchased some shares of Philip Morris International (PM) for around $100. During the tariff tantrum in April, I decided to sell when the stock ripped to $160 while the rest of my watchlist was crashing (I used the proceeds to move into Airbnb and IBKR). As of this writing, the stock trades around $183 and has produced a total return of 171% over the last five years, most of which have come in the last two years.

The company remains of interest for Emerging Moats because of its successful transition from cigarettes to new nicotine categories, which is extending the company’s terminal value, building a new consumer branding/scale/distribution moat, and laying the groundwork for decades of durable cash generation.

In this quarterly update, I will cover:

• The sustainable combustible formula

• Durable HTU growth

• Nicotine pouch uncertainty

• Consolidated growth assumptions

• Margin expansion and cash flow expectations

• Dividend growth and capital returns

• Is there still an emerging moat?

• My investment decision

Let’s begin.

A sustainable combustibles formula

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