The Motley Fool on $MELI (Nov 5, 2026)
MELI is the speaker's largest retirement position and he is not worried by lower investment-cycle margins: 30 straight quarters of over-30% growth, with 45% this time, and spending on credit, logistics and inventory are upfront cash for future growth that is already accelerating buyers and items per buyer; advertising is growing over 50% year over year. He would worry if that acceleration failed. When the cycle ends, margins could jump within one or two quarters, though the stock may already reflect the recovery.
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Marcato Libre was kind of the biggest name. General thoughts were CAD liberate 30 consecutive quarters of over 30% growth. Uh this time was 45% but that doesn't matter right now because they're still in their investment cycle which means margins have come down again and and the explan we we follow Marcado Libra for quite a while.
We we know management's track record so we're not that surprised with what they're doing. the market still, I guess, doesn't believe what what they're saying, which is astonishing because their track record is is a very very good one.
So, they're investing, they're expanding um they're investing their credit portfolio, they're expanding the the the shipping network. Of course, when you offer free shipping, when you expand your logistics network and all of that, when you increase your inventory in preparation for the holiday season, all of these things are upfront cash that will just make the business in the future much better.
Um I would have been very worried if all of these investment did not translate in acceleration in growth in more buyers in more items sold per buyer. Um I would have been worried if that didn't happen but it is happening.
It it is all going according to their plan. It's going up and to the right and so I'm I'm not worried as long as the business does what it should be doing and and clearly clearly it's doing it's doing very well.
Now at one point at one point yes the investment cycle will come to an end for them. Of course it's not the same investment cycle as with the hyperscalers but at one point the investment cycle for Macad Libra does come to a a slowdown and then yes and then you'll see in just one or two quarters the margin profile jump but by then the stock would probably already reflect that uh that recovery.
So, I like what I heard. Advertising business has also grown what again over 50% I think year-over-year. So, I'm happy. I'm I'm a happy it's it's actually my largest position, my retirement account, but today.
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