My guest today is Cliff Sosin. Cliff is the founder of CAS Investment Partners, a fund he started with $5 million in 2012 and has grown to $1.7 billion as of the last reported numbers at the end of 2024. At the time, CAS had only four positions.

This conversation is different to our typical episodes. We start by talking about Cliff's investing philosophy but the bulk of this long discussion is a case study into his remarkable investment in Carvana. Cliff is one of the biggest investors in the business, which had a market cap over $60 billion in 2021, then fell 99%, survived, and now has a market cap approaching $50 billion again. While I hosted Carvana's CEO, Ernie Garcia, last year to get the inside perspective on managing through such turbulence, today we hear the investor's side of this extraordinary story. It is a singular episode and there are so many lessons in this rare opportunity to hear a major investor describe his decision-making process at every stage of the journey. Please enjoy my great conversation with Cliff Sosin.

For the full show notes, transcript, and links to mentioned content, check out the episode page here.

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Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes:

(00:00:00) Welcome to Invest Like the Best

(00:05:32) Early Career and Discovering Investing

(00:06:49) Starting the Firm and Initial Challenges

(00:08:41) Investment Philosophy and Market Realities

(00:11:07) Building the Firm and Investor Relations

(00:12:23) Defining a Good Business

(00:17:31) Contained vs. Uncontained Businesses

(00:20:30) Mental Models and Market Insights

(00:35:13) The Role of ESG in Investing

(00:39:26) The Carvana Investment Story

(00:46:43) Carvana's Real Estate and Logistics Network

(00:49:12) Reconditioning and Selling Cars

(00:50:16) Carvana's Financing and Customer Service

(00:51:43) Economies of Scale and Trust

(00:54:40) Challenges and Management Insights

(01:04:07) Operational Issues and Market Challenges

(01:23:56) Questioning Carvana's Sales Strategy

(01:24:17) The Role of Word of Mouth in Carvana's Growth

(01:25:28) Identifying Early Adopters

(01:26:00) The Impact of Market Conditions on Carvana

(01:27:10) Carvana's Operational Challenges

(01:28:10) Cutting Costs and Organizational Efficiency

(01:32:19) The Apollo Deal and Debt Restructuring

(01:39:21) The Psychological Toll of Investment

(01:50:16) Future Investment Strategies and AI

(01:54:48)The US Market and Investment Opportunities

(01:59:51) The Kindest Thing Anyone Has Ever Done For Cliff

In Praise of Intolerance