Cliff Sosin

When you own a stock that's down 30%, you know, okay, here's what's wrong, here's what we're going to fix it, blah, blah, blah. When it's down 99%, like, so, you know, someone meets you and says, like, what's up with Carvana? And you're like, well, I'm aware that last year I thought they were going to sell 800,000 cars, and they're on track to sell 300.

When you own a stock that's down 30%, you know, okay, here's what's wrong, here's what we're going to fix it, blah, blah, blah. When it's down 99%, like, so, you know, someone meets you and says, like, what's up with Carvana? And you're like, well, I'm aware that last year I thought they were going to sell 800,000 cars, and they're on track to sell 300.

And I'm also aware that last year I thought they'd make positive EBITDA this year, and they're on track to lose $2 billion. And I'm also aware that the stock is down 99%. But what I'm about to say is I think things are going to be okay. And you can see how that makes you seem like you've lost the plot. And there isn't a good way to say that that doesn't make you seem totally nuts.

And I'm also aware that last year I thought they'd make positive EBITDA this year, and they're on track to lose $2 billion. And I'm also aware that the stock is down 99%. But what I'm about to say is I think things are going to be okay. And you can see how that makes you seem like you've lost the plot. And there isn't a good way to say that that doesn't make you seem totally nuts.

Because basically, you say all that and they're like, oh, you denial bull market baby. And so that was another real tricky thing. There was no good way to... And there was, at some level, deep uncertainty because things had gotten bad enough where I couldn't be like, look, I'm 100. I couldn't be like, yes, yes, we're fine. I was like, look, things are way off course, right?

Because basically, you say all that and they're like, oh, you denial bull market baby. And so that was another real tricky thing. There was no good way to... And there was, at some level, deep uncertainty because things had gotten bad enough where I couldn't be like, look, I'm 100. I couldn't be like, yes, yes, we're fine. I was like, look, things are way off course, right?

And for reasons I never would have predicted. And so how do you have that meeting, right? And then how do you have the 30th version of that meeting, right? Because you do these over and over, right? And then, of course, you leave that meeting and you've sort of done it. And then you drive and the stock's down another 8%. And you're going to the gym and you're like, particularly, whatever.

And for reasons I never would have predicted. And so how do you have that meeting, right? And then how do you have the 30th version of that meeting, right? Because you do these over and over, right? And then, of course, you leave that meeting and you've sort of done it. And then you drive and the stock's down another 8%. And you're going to the gym and you're like, particularly, whatever.

You sort of try to manage yourself and then you can't sleep. It was really hard. I'd rather not go through it again.

You sort of try to manage yourself and then you can't sleep. It was really hard. I'd rather not go through it again.

One thing I mentioned earlier was the importance of management teams. Like if I rank things instead of how they ultimately turned out over the full span, the management teams were wildly predictive of outcomes versus my expectations. So that's like a practical learning.

One thing I mentioned earlier was the importance of management teams. Like if I rank things instead of how they ultimately turned out over the full span, the management teams were wildly predictive of outcomes versus my expectations. So that's like a practical learning.

Another is that in general, I have a new and deeper appreciation for how much harder it is in reality to go from unprofitable to profitable.

Another is that in general, I have a new and deeper appreciation for how much harder it is in reality to go from unprofitable to profitable.

than it is on paper and like i that you know i everyone like i feel like that's kind of trite but like this the thing is you do this analysis you're like okay this is you know the margins and blah blah blah and like it all makes sense but like now i've seen this like play out like up close over and it's hard like it's so hard it's so much harder than it looks and so i think my it's not that i won't invest in loss making companies but like my

than it is on paper and like i that you know i everyone like i feel like that's kind of trite but like this the thing is you do this analysis you're like okay this is you know the margins and blah blah blah and like it all makes sense but like now i've seen this like play out like up close over and it's hard like it's so hard it's so much harder than it looks and so i think my it's not that i won't invest in loss making companies but like my

willingness to underwrite to that is just adjusted. There's like a base rate adjustment that's more salient for me than it was before. I have less of an interest, I should say, in investing in businesses that have narrower Because like life will throw massive curveballs at you.

willingness to underwrite to that is just adjusted. There's like a base rate adjustment that's more salient for me than it was before. I have less of an interest, I should say, in investing in businesses that have narrower Because like life will throw massive curveballs at you.

And like, you know, there's sort of an interesting point, which is like if you'd asked me why I owned so much Carvana back when it traded for like 300 back in 2021, I would have said this is an incredibly stout business. People do not appreciate how stout this business is. And in retrospect, I was right.

And like, you know, there's sort of an interesting point, which is like if you'd asked me why I owned so much Carvana back when it traded for like 300 back in 2021, I would have said this is an incredibly stout business. People do not appreciate how stout this business is. And in retrospect, I was right.