Opinion
Sosin: Fund managers are 'deeply arrogant' to apply personal ethical frameworks
“I think that if you manage money for other people, you're deeply arrogant if you are going to apply your ethical framework onto
The way that you invest.”
Prediction Not checkable as stated
Sosin: Someday people will compare Jeff Bezos to Carvana's Ernie Garcia
“Someday people will compare Jeff Bezos to Ernie Garcia, not the other way around.”
Opinion
Sosin: Carvana's 2023 debt exchange did not save the business
“And that whole exchange happened in the summer of 23, and a lot of, sort of, the retelling of the story is, and by virtue of that exchange, they, like, saved the business. By that point, the data I was looking at said that everything was great. That was just k…”
Assertion Supported
Sosin: Every competitor attempting to copy Carvana's vertically integrated model failed
“Everyone who's tried to build this business besides Carvana has failed, and that's why It's taken Carvana, you know, over 10 years and ten billion dollars to get, you know, where it is.”
Prediction Open · timeframe Apr 2028
Sosin: Carvana will probably reach 13% to 14% EBITDA margins
“And they'll probably get to the 13, fourteen-ish percent range based on what they've said, and there's no reason to doubt it.”
Assertion Not checkable as stated
Sosin: Carvana sells vehicles $500 to $600 cheaper than CarMax
“And we track every car that they sell and we compare it to similar cars sold by CarMax. We also compare it to other market indices. And we believe that they sell cars of the order of sort of five, 600 dollars cheaper doing that.”
Insight
Sosin: The institutional investing business prioritizes marketability over performance
“One might naively think that, that the investing business is about maximizing performance, which, but it's not, it's about maximizing marketability and performance is a component of marketability, but really what you're trying to do is signal talent and the wa…”
Insight
Sosin: Investing is the premier intellectual pursuit due to public accountability
“But in investing, you know, it is wildly accountable. You, you're making predictions about which businesses are going to win and which are going to lose which, you know, to understand businesses are sort of complex social structures embedded in our society, wh…”
Opinion
Sosin: Software tooling businesses are built on sand due to tech shifts
“I, you know, who knows how, how people are going to write software in 10 years, like for what, for quantum computers, for You know, and it's just like you might have a business today. It's like building a castle on sand, right? Like it's just very, very hard t…”
Insight
Sosin: Investors can profit from moral panics like economic panics
“I've also noticed there's sort of moral panics that have happened and you know, you can buy into moral panics much the way you can buy into economic panics and you can do well.”
Opinion
Sosin: Investor divestment mandates do not necessarily make assets super cheap
“I don't think that like,
Groups of investors deciding to forego certain asset classes like oil companies necessarily cause them to be like super cheap.”
Assertion Not publicly verifiable
Sosin: Carvana operates at lower cost than traditional dealership system
“Also what I described of Carvana system is a lower cost to operate system than the traditional dealership system.”
Opinion
Sosin: Carvana's ADESA acquisition was a huge home run
“It's been, in retrospect, it's been a huge home run. But, you know, they bought it with all debt. They bought it in February of 22”
Insight
Fundraising success depends heavily on the sequence of annual returns
“If you changed the order of the years, get to the same place, but I definitely wouldn't have raised any money. So there's also a meaningful component of luck.”
Disclosure
CAS Investment Partners holds four to eight positions and trades annually
“Over time, We've sort of had kind of between like, we'll call it four and eight. I may, might have been as many as 10 at one point, but that's kind of the number of investments. We tend to, over the course of time I've been investing, I think on average I've s…”
Insight
Sosin: Economic profits are anomalies where competitive forces fail to reach zero
“If you think about it, in most markets, you shouldn't have a lot of profits, right? Like profits are kind of a fluke of some sort of something about the setup that makes it so that some reason why, you know, competitive forces can't drive, you know, economic p…”
Insight
Rental cars, airlines, and cruise lines operate as Cournot oligopolies
“It turns out that like a lot of travel businesses are, you know, Cornell oligopolies you know, rental cars air, air, air travel cruises.”
Assertion Supported
Sosin: Carvana Has Recovered and Is Now More Profitable
“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.”
Assertion Supported
Sosin: No competitor has replicated Carvana's real-time, penny-accurate financing stack
“To this day, as far as I'm aware, no one's like replicated this capability. In order to do it, you need to be vertically integrated into prime lending, subprime lending. It just turns out that like no one else is.”
Insight
Used cars are likely the hardest retail e-commerce category for fulfillment
“In the sort of fulfillment sense of it I think, you know, used vehicles are probably the hardest thing to build in but the analogy to Amazon actually, I think is is apt.”
Insight
Sosin evaluates management quality by assessing former long-tenured employees
“The really good way to do it, I find, is I talk, talk to former employees... The human capital exhaust is kind of indicative of what's inside.”
Assertion Not checkable as stated
Carvana holds more vehicle inventory than all Connecticut dealerships combined
“There are more cars available on Carvana's website right now than there are for us right now sitting here in the entire state of Connecticut from all the other dealerships.”
Prediction Not checkable as stated
Sosin: In-person car auction business is decaying over time
“The in-person auction business will have a long tail to it, but it's eventually a decaying business over time.”
Assertion Supported
Navy Federal Credit Union offered auto loans below comparable Treasury yields
“There was a long period of time where, like, Navy Federal was offering car loans at a discount to Fed, to the Treasury of the comparable duration”
