The Prof G Pod with Scott Galloway Prof G Markets: Alibaba and Mercado Libre, Share Buybacks vs. Dividends, and National Credit Ratings
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May 22, 2023 
In this engaging discussion, guest Ed Elson, a media analyst at Prof G, joins Scott to dissect the competitive landscapes of e-commerce giants Alibaba and Mercado Libre. They explore the surge in share buybacks over dividends and its implications for shareholder value. The conversation dives into how population decline is affecting national credit ratings and investment strategies, shedding light on the economic risks tied to aging demographics. It's a fascinating mix of market insights with a dash of humor!
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MercadoLibre's Success
- MercadoLibre, known as the "Amazon of Latin America," shows impressive growth and profitability.
- Its operating margins are higher than Amazon's, suggesting strong management and potential.
Government Risk in International Stocks
- Alibaba's low valuation reflects government risk, as the CCP's intervention can disrupt businesses.
- Investors should consider government risk when evaluating international stocks like Alibaba and Mercado Libre.
Share Buybacks and Executive Compensation
- Share buybacks increase earnings per share, which can benefit executives with EPS-linked bonuses.
- Boards and shareholders should carefully structure CEO incentives to prioritize long-term value creation, not short-term share price manipulation.