Invest Like the Best with Patrick O'Shaughnessy

Mario Cibelli - Cornerstone Investing Insights - [Invest Like the Best, EP.205]

Dec 22, 2020

Mario Cibelli, managing partner of Marathon Partners Equity Management, shares two decades of investment wisdom. He reveals how his firm predicted Netflix's rise using insights from Blockbuster's distribution. Visiting distribution centers is highlighted as a game-changer for identifying potential investors' advantages. Cibelli also dives into the tequila market, spotlighting Becle's growth and agave price trends. Finally, he discusses cornerstone insights that have shaped investment strategies, emphasizing the importance of deep analysis amidst fast-paced market changes.

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ANECDOTE

Blockbuster's Envelope Secret

Mario Cibelli's firm analyzed Blockbuster and Netflix's DVD services.
They discovered Blockbuster's envelope revealed customer and DVD volume data, which they shared with Netflix.

INSIGHT

Distribution Center Visits

Visiting distribution centers can reveal competitive advantages.
Mario Cibelli's Netflix distribution center visit highlighted operational efficiencies difficult for competitors to replicate.

ANECDOTE

Stitch Fix's Unique Approach

Stitch Fix's distribution center showcased unique processes.
Their focus on presentation, returns, and predictable production differs drastically from traditional e-commerce.

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My guest today is Mario Cibelli. Mario is the managing partner of Marathon Partners Equity Management, a long-biased, concentrated investment firm that he's run for over 20 years. In our conversation, we discuss how his firm figured out Blockbuster's DVD volume and told Reed Hastings and Netflix about their numbers, why visiting a company's distribution center can be an edge for investors, Mario's interesting foray into the world of tequila, and how a few "cornerstone" investing insights have led to many of Marathon's long positions. I hope you enjoy my conversation with Mario.

This episode of Invest like the Best is brought to you by Tegus. Tegus has built the most extensive primary information platform available for investors. With Tegus, you can learn everything you’d want to know about a company in an on-demand digital platform. Investors share their expert calls, allowing others to instantly access more than 10,000 calls on Square, Snowflake, or almost any company of interest. All you have to do is log in. Visit https://www.tegus.co/patrick to learn more.

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Show Notes

(2:34) – (First question) – Doing a deep dive into the early days of Netflix

(2:43) – Netflixed: The Epic Battle for America's Eyeballs

(6:50) – What was impressive about Reed

(7:34) – Visiting Netflix’s distribution centers early on and the lessons of those visits

(10:44) – Lessons learned from other distribution centers

(17:52) – What helps create good luck for a company

(19:17) – Why tequila was fun to investigate

(25:09) – Why tequila is different from other hard liquors

(27:40) – Finding the cornerstone insight in a company