Cliff Sosin

And if you were to broadly describe the company's history from 2013 to 2021, it was up and to the right. The business grew every year. Its margins improved every year. And it grew really fast. It was doubling often every year. Slid a little bit, but that was kind of roughly the pace. You know, if you'd spoken to me in 2021, I roughly would have expected a continuation of that trend.

And if you were to broadly describe the company's history from 2013 to 2021, it was up and to the right. The business grew every year. Its margins improved every year. And it grew really fast. It was doubling often every year. Slid a little bit, but that was kind of roughly the pace. You know, if you'd spoken to me in 2021, I roughly would have expected a continuation of that trend.

And, of course, what happened was the business... It slowed. It lost tons of money. The stock went down 99%, which is more than... Pretty bad. Which is pretty bad. And then, you know, to ruin the story, which I think most people realize, you know, it turns out that was all a mistake. The company's fine. It's right back.

And, of course, what happened was the business... It slowed. It lost tons of money. The stock went down 99%, which is more than... Pretty bad. Which is pretty bad. And then, you know, to ruin the story, which I think most people realize, you know, it turns out that was all a mistake. The company's fine. It's right back.

It's a little behind where I sort of thought it would be, but it's actually more profitable and it's back on track and the stock's mostly recovered and all the rest. So that's kind of the broad arc.

It's a little behind where I sort of thought it would be, but it's actually more profitable and it's back on track and the stock's mostly recovered and all the rest. So that's kind of the broad arc.

I first encountered Carvana in 2018. And they used to have a video up on their site, they might still, that kind of describes the business. It was a pre-IPO video, one of these things you put up or whatever. Yeah. And I remember sort of watching that video, basically realizing this is an amazing business that's going to do great. And it's incredibly underpriced.

I first encountered Carvana in 2018. And they used to have a video up on their site, they might still, that kind of describes the business. It was a pre-IPO video, one of these things you put up or whatever. Yeah. And I remember sort of watching that video, basically realizing this is an amazing business that's going to do great. And it's incredibly underpriced.

And I'm going to own a lot of this, provided everything they just said is true. But obviously, that's not how reality works in the sense that the reason why I felt like that was years and years and years of context. And so to go further back, over the prior years for, you know, like when you're in my business, you're waiting for your stocks to go up.

And I'm going to own a lot of this, provided everything they just said is true. But obviously, that's not how reality works in the sense that the reason why I felt like that was years and years and years of context. And so to go further back, over the prior years for, you know, like when you're in my business, you're waiting for your stocks to go up.

In the meantime, you're sort of looking at other things. And so I had spent time studying CarMax and I had spent time studying car dealerships. So I was sort of reasonably fluent in kind of how the auto retailing business works. I'd also been involved in the auto lending business. I'd been involved in credit acceptance, which is a one on auto lender.

In the meantime, you're sort of looking at other things. And so I had spent time studying CarMax and I had spent time studying car dealerships. So I was sort of reasonably fluent in kind of how the auto retailing business works. I'd also been involved in the auto lending business. I'd been involved in credit acceptance, which is a one on auto lender.

I'd also, you know, looked obviously who hasn't like studied Amazon and like read the everything store. I'd also studied logistics companies. And I'd also looked at, you know, manufacturing companies and all the rest and software companies. And so it turns out that Carvana is like all of these things. As they were explaining the business, it was clear to me that the

I'd also, you know, looked obviously who hasn't like studied Amazon and like read the everything store. I'd also studied logistics companies. And I'd also looked at, you know, manufacturing companies and all the rest and software companies. And so it turns out that Carvana is like all of these things. As they were explaining the business, it was clear to me that the

The economic advantages that allow someone to build a successful distribution company or a successful retailer or a successful lender, all of them have economies of scale, skill, and trust. And what Carvana was building was going to involve all of the advantages from all of these different businesses that they're effectively in at the same time. And this is called economies of scope.

The economic advantages that allow someone to build a successful distribution company or a successful retailer or a successful lender, all of them have economies of scale, skill, and trust. And what Carvana was building was going to involve all of the advantages from all of these different businesses that they're effectively in at the same time. And this is called economies of scope.

And by being great at all of these things, it was going to produce this very – it could produce this very big moat. What I didn't believe necessarily until I saw that video was that anyone would buy a car on the internet because that was just common wisdom. And at the time, this is a while ago. This is before it was obvious. But they just had some cohort curves. And I was like, well –

And by being great at all of these things, it was going to produce this very – it could produce this very big moat. What I didn't believe necessarily until I saw that video was that anyone would buy a car on the internet because that was just common wisdom. And at the time, this is a while ago. This is before it was obvious. But they just had some cohort curves. And I was like, well –

People clearly love this. And so at that point, it was kind of like love at first sight. Maybe to sort of explain a bit about the business and why I think it's so... The things I identified turned into the tremendous advantages it has today. and are kind of the moat. So let me just spend a few minutes. So at the core, the way the Carvana system works, it will follow a car.

People clearly love this. And so at that point, it was kind of like love at first sight. Maybe to sort of explain a bit about the business and why I think it's so... The things I identified turned into the tremendous advantages it has today. and are kind of the moat. So let me just spend a few minutes. So at the core, the way the Carvana system works, it will follow a car.