I’d like to share a story about the benefits of investing in the private and public markets and how the private market mindset can help public equity investors.

Philippe Laffont @plaffont: I’d like to share a story about the benefits of investing in the private and public markets and how the private market mindset can help public equity investors.

Philippe Laffont @plaffont: 2/A few years ago we invested in a private company called Meituan (3690 HK). Meituan is like doordash or Uber eats and we thought in China, with over 100 cities >1m pop, this would be a huge market. The other competitor was owned by Alibaba.

Philippe Laffont @plaffont: 3/The company went public less than two years later at 70. We were ecstatic! Then the stock rapidly plunged to 40 based on renewed fears of competition with Ele.ma (Alibaba)

Philippe Laffont @plaffont: 4/At the time we were locked up so there was nothing we could do. Today the stock is at almost 300 and $250B market cap. I fear what we might have done if not subjected to the lock up!

Philippe Laffont @plaffont: 5/What’s the learning? In the private markets, the focus -FIRST- is TAM (size of market), then second everything else. And the stock price is static unless there is a new round. So you have time to develop your thesis.

Philippe Laffont @plaffont: 6/In the public markets, lots of things can affect the stock price over the short run, and one can make mistakes by overestimating data about temporary problems.

Philippe Laffont @plaffont: 7/Patience, and confidence in the 7-10 year story (how many orders per day can Meituan generate if every urban household orders 2 meals per week...) will drive the stock so much higher than one can process during painful stock fluctuations!

Philippe Laffont @plaffont: 8/Private investing is about imagining the future as there is less data to analyze than as a public company, and that foresight usually compounds the variant perception with time.

Philippe Laffont @plaffont: 9/ Conc: Imagination is the skill. Uncertainty is the opportunity. Data is important but so is the story. Patience is way underrated.

Philippe Laffont @plaffont: 10/Question: How many daily orders will Meituan generate in 7-10 years? ( today it’s already >30m/day)