During their recent episode of the VALUE: After Hours Podcast, Taylor, Brewster, and Carlisle discussed Stunning Valuations $TTD, $PTON. Here’s an excerpt from the episode:
Tobias: I went through some of the names that people have thrown out on the podcast, on my other podcast, just to sort of see, some of the names that people more deeply researched and I had a look at Trade Desk. Have you guys seen the chart on Trade Desk?
Bill: I’ve seen a lot of these charts, and I’ve seen that chart.
Tobias: Here’s the thing. They’re all very similar. All these stocks basically take off in 2018. They all go from probably being undervalued in 2018, to being very overvalued now, but Trade Desk is the most egregious one that I could find so far, like for the ones that I’ve looked at that I’m interested in owning. Trade Desk is– if you guys pull up the chart on that one, just set your faces to stun, that’s pretty impressive.
Bill: Well, it’s a lot of them. Look, if all of them do the same thing, I just don’t buy that every company has gotten that much better. I just don’t.
Tobias: Well, the underlying hasn’t done that.
Bill: Now, technical– what?
Tobias: The underlying hasn’t done that, it’s just the price.
Bill: Yeah, that’s right, in the perception. To be fair, they did accelerate a lot of adoption of tech, and that is a big barrier to adoption, and now people are more integrated to it. I don’t deny that. I’ll tell you what, I am tired of Zoom and I am tired of Peloton. Those two things, I’m just bored of.
Tobias: The stocks or the things?
Bill: No, the things.
Tobias: Oh, yeah.
Bill: Somebody asked me the other day, “Do I want to get on a Zoom call?” I was like, “No, just call me on the phone. I don’t want to see your face.”
Tobias: Yeah, that’s right. That’s the thing. The fatigue of having to stare at people all the time.
Bill: Yeah, if I want to–
Jake: Are you tired of riding your Peloton now too?
Bill: -pick my nose on the other side of the phone, I don’t want you to see it.
Jake: Are you not riding your Peloton now?
Bill: I just did.
Jake: Oh, I thought you said you’re tired of it.
Bill: I am a little tired of it, but I rode it. I’m missing the gym.
Tobias: What we need is a subscription service for a bike that you can take outside. It’s like $2999 a month, we’ll sell you the frame. Anytime your tires get flat, we’ll give you tire.
Jake: And it goes places.
Tobias: And it goes places, that’s outside. Incredible scenery, so realistic.
Bill: I want music and I want a trainer, that is what Peloton, that’s the– [crosstalk]
Tobias: We’ll throw in some AirPods.
Jake: Yeah, we’ll tape an iPad to it, don’t worry about that.
Bill: Yeah, that’s fine. Yeah, just charge me $2,000 and you got something. The thing about it that– I was thinking about this today, could you bring Peloton to the gym? I think you could. I think it could travel, but I do think it’s going to be weird to have your phone and your trainer with you at the gym, [crosstalk] odd.
Tobias: There’s a Peloton in the hotel and you log in as yourself?
Bill: Yeah, but there’s actually an app right and it’s on your phone. It’ll have your workout, strength workouts and whatever. It’s a personal training program as well as a bike. It’s just the personal training is–
Tobias: Not that personal? Impersonal?
Bill: Yes, it’s more of like classes through a screen.
Jake: It’s arm’s length.
Bill: Yes, it’s COVID-appropriate training. Anyway.
Tobias: Where’s Peloton trading now? In terms of valuation.
Bill: It’s got to be–
Jake: [crosstalk] –sitting down. [laughs]
Tobias: I’m about to be.
Jake: Yeah, make sure you’re sitting down first.
Bill: Oh my God, this thing’s a $35 billion company. Get the fuck out here.
Tobias: What’s it making?
Bill: What a ridiculous valuation. I’m sure somebody is like, “I got my whole fund in it, you don’t understand.” All right, whatever.[laughter]
Bill: You may not. Anyway.
Tobias: What’s it make?
Bill: What, in cash?
Bill: I don’t know, dude. You’re going to make me go through all this stuff. Valuation is screamingly high. That’s the answer. People are underwriting some big, hairy, audacious goal of 100 million users. All right, we’ll see how we’re doing in two years. It may work, like it may.
Tobias: 100 million users globally?
Bill: Yeah, look, dude, all I’m saying–
Tobias: Not the States? [crosstalk] -hassle.
Bill: This is the same thing. I think it’s global. I don’t even care. At the end of the day, you’re paying $35 billion for an in-home gym. When have they ever stock?
Jake: For a future coat rack.
Tobias: Yeah, that’s right. The most important thing is that it has to fold up to go under your bed. That’s the most important feature.
Bill: Oh, and by the way, here we go. My man, ValueStockGeek, 186 or 126 times EV to EBIT.
Tobias: That’s expensive.
Bill: Now people are going to be like, “Well, EBIT slow, and they’re investing through the income statement is still a subscale.” I get it. That is crazy.
Tobias: It’s only 200 times EV/EBIT.
Bill: Dude, if that’s not crazy, the whole basket is 100% crazy, if that is maybe the one that I’m wrong on. There’s not a chance I’m wrong on all these. Whatever, you think I’m wrong? Bet it. I could care less. I have no exposure and I could care less. Enjoy your life.
Jake: [laughs] What phase of loss is this in the seven phases? This is like bargaining or–
Tobias: Stages of grief.
Jake: Where are we at? I mean, we’re close to anger.
Bill: I’m really not angry. I guess the only thing that I’m angry about is– I don’t know. I’m angry about what a bad name not owning some of that stuff has gotten. But then again, that’s sort of the two camps of investors and that’s fine. I do want to own one, one day. If I could find one that I could call, MinionCapital. I’m looking forward to talking to him. He’s a smart dude. If he said fish here for this reason, and start learning, I’d be open to that. I’m just not finding the name on Twitter. [crosstalk]
Tobias: Somebody here says you need to take boxing class. [laughs]
Tobias: I think they [unintelligible [00:12:28] hand out the punches.
Jake: Yeah, they just want to punch you in the face, I think is what he’s saying.
Tobias: Lots of aggression to release.
Bill: I don’t have aggression. Do I sound aggressive?
Jake: [crosstalk] -in the value.
Tobias: What innings are we in?
Bill: Probably two.
Jake: Back to two. We’ve rolled back an inning? Shit.
Bill: Yeah, I think we did. Didn’t we correct the last two days?
Tobias: Did we? I don’t know. I thought we were at all-time highs. If someone says, “Where are we?” If you just say all-time highs, there’s like a 50/50 chance that you’re right in this market on any given day.
Bill: I don’t mean to sound that angry. It’s just when I look at Peloton and it’s a $35 billion company, that’s insane to me.
Tobias: Here we go, Peloton for boxing. Boxing as a service. [laughs]
Bill: That boxing as a service is basically mirror.
Tobias: How’s that mirror? Yeah. All right.
Tobias: Of course, somebody already thought about it.
Bill: They’re good products. I’m not a product hater. I just don’t understand how you can spend that much money on that product if you want to own the equity.
Tobias: I don’t like Zoom.
Bill: And you’re probably going to face dilution.
Tobias: I’m a product hater. I don’t like Zoom.
Bill: Yeah, that’s different.
Tobias: I log into it five times a day to get my kids into school, so I’m tired of it. There’s got to be a better way to log in.
Bill: Yeah, I don’t know. We’ll see, man. Maybe all this makes sense. It’ll be an interesting 10 years from here.
Tobias: Let’s turn this back into an investing podcast.
Jake: Oh, okay– [crosstalk]
Bill: Is it not?
Jake: Random gripe session.
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