Meili Lee asked 2 years ago
Hi FP, during the webinar, FP’ proposed a margin of safety of 30% on entry price on Meta. I am not as pessimistic as FP on the lifecycle stage of Meta products. I think Instagram is still in early maturity in terms of advertising revenues and with AI and Mark Zuckerberg.s view of many forms of AI that each creator could use, potentially could have even longer runway. I am also not as pessimistic on What.s app and not as optimistic on Telegram. However, I am also not the Telegram demographic. I made a small poll with the young people in my extended family, in Singapore & Malaysia telegram seem to be set up for business accounts but people are not interacting socially on it. With these views, could it be that the margin of safety closer to fair value? Perhaps , somewhere around 15-20%,
1 Answers
Victor Chng Staff answered 2 years ago
Hi Meili,
You're right about the dominant position of Meta in the market and their potential long runway. Our view on Meta is influenced by observing how platforms like Myspace and Friendster lost popularity with newer generations. Although Instagram might still be growing, we prefer a conservative approach when valuing businesses. In an era of rapid disruption, having a higher margin of safety protects us. As I mentioned during the webinar, valuation is an art, and understanding the business is key to determining the appropriate margin of safety.
Hope this helps.
You're right about the dominant position of Meta in the market and their potential long runway. Our view on Meta is influenced by observing how platforms like Myspace and Friendster lost popularity with newer generations. Although Instagram might still be growing, we prefer a conservative approach when valuing businesses. In an era of rapid disruption, having a higher margin of safety protects us. As I mentioned during the webinar, valuation is an art, and understanding the business is key to determining the appropriate margin of safety.
Hope this helps.
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