In short: A full 15-step case, Total Quality Score 7.6/10, on bank-specific metrics. "It's a high-growth company that has disrupted the Big Five banks in Brazil… the largest digital banking platform in the world outside of Asia." Owner-operator (Vélez: 75% of votes, 19% of the equity); a moat of cost ("less than $1 per month to serve a customer, while traditional banks spend over $4") and brand (NPS near 90, 80-90% referral-led sign-ups). LDR 58%, CET1 20% vs ~8.75% required, 90+ NPLs 6.8%, efficiency ratio 27%, ROE 31.6%, net margin 42.8%, SBC 9.8% of net income; revenue 75.9% 5-yr CAGR and 32.4% / 37.5% expected revenue / EPS growth. Valuation: 16.4x forward vs 22.7x average ✅, Earnings Growth Model 15.0% ✅, reverse DCF 14.8% ❓ — "could be reasonable as long as it keeps growing at high rates, and the multiple doesn't come down significantly." Fails only on history: 9.1% CAGR since the 2021 IPO (❌ vs 12%), YTD −11.9%. Main risk: "the competition from MercadoLibre's FinTech segment."
Nubank is a bank that exists only as a phone app. It started in Brazil in 2014 with a credit card that charged no annual fee — a big deal in a country where five large banks charged heavy fees — and has since added savings accounts, personal and small-business loans, investing, crypto and insurance, in Brazil, Mexico and Colombia. It now has about 139 million customers. Most of its money comes from the interest customers pay on card balances and loans.
The case for it is cost. With no branches, it spends under $1 a month per customer against more than $4 at a traditional bank, and most new customers arrive because a friend recommended it, so it barely pays to acquire them. For every dollar of revenue it spends about 28 cents on running the business; old-style banks spend 40 to 50 cents. It earns about 32 cents a year on every dollar of shareholders' money, and it holds more than twice the safety capital regulators require. Late payments — loans more than 90 days overdue — run at 6-7%, which is high by US standards but steady for a lender that serves people big banks turn away.
On price, the shares trade at about 16 times next year's expected profit, cheaper than their own recent history but roughly double the big Brazilian banks. If profits grow 15% a year and that multiple holds, the newsletter expects about 15% a year. The catches: the company has only been profitable since 2023, the shares have returned just 9% a year since the 2021 listing, MercadoLibre's payments arm is a serious rival, and a Latin American recession would show up quickly in loan losses. Some of the figures also look carried over from an older version of the write-up. And the newsletter's own portfolio now only buys companies from developed countries, so this is not a stock it can buy.
In short: Credit fears ease. Q2 revenue +50% Y/Y (+39% cc) to $5.5B (a $0.4B beat), GAAP EPS $0.22 ($0.03 beat); net income +49% and crossed $1B quarterly for the first time, with a record 33% ROE. Customers +4M to 139M and ARPAC +22% cc to $17.1. The key reversal is credit: the portfolio grew 37% to $39.4B while cost of credit fell 9% Q/Q to $1.7B, risk-adjusted NIM rebounded to 12.4% from 9.5% in Q1, and early delinquencies improved to 4.8% (90+ day did rise to 6.9%). Mexico is "increasingly looking like the Brazil playbook on fast-forward" — 15.8M customers, now launched as a full bank, with Mexican ARPAC already $12.3 versus $5.6 for Brazil at the same stage. NuFormer, its foundation model, now handles more than 60% of Brazilian support conversations. Bottom Line: "Nu is showing it can deepen monetization without giving up its exceptional profitability." A disclosed author holding.
Nu is the digital bank that started in Brazil and now serves 139 million customers across Latin America. The perennial bear case on any fast-growing lender is simple: growth in the loan book today becomes bad debt tomorrow. This quarter is the direct rebuttal.
Nu grew its credit portfolio 37% to $39.4 billion while the cost of that credit actually fell 9% quarter-over-quarter. "Risk-adjusted NIM" — the interest margin it earns after subtracting expected loan losses, i.e. what the lending is really worth — rebounded to 12.4% from 9.5%, and early-stage missed payments improved. Net income passed $1 billion in a quarter for the first time at a 33% return on equity, which is exceptional for a bank of any kind.
The forward story is Mexico, described as "the Brazil playbook on fast-forward": 15.8 million customers, now operating as a full bank, and already earning $12.3 per active customer versus $5.6 for Brazil at the same stage of development. It is monetizing new customers roughly twice as fast as it did the first time around. Set this beside StoneCo in the same issue — same country, opposite credit outcome — and the divergence is the point.
In short: A pick, and the stated exception to his own sector exclusions. "There are industries I stay away from. Energy, for example, unless something is truly disruptive. Financials too, normally. But one of my picks is a disruptive bank: Nubank ($NU), already more than a three-bagger in three years. So, as you can see, this is not an absolute criterion." The exclusion is by default, overridable by genuine disruption — which is a more useful rule than a blanket ban.
Nubank is a Latin American bank with no branches — an app that gives customers accounts and credit cards at far lower cost than the incumbent banks it competes with, which in Brazil have historically been both expensive and disliked.
It matters here mainly as an illustration of how the guest handles his own rules. He normally avoids financial companies altogether, but says the exclusion is a default rather than a law and can be overridden by genuine disruption. Nubank has more than tripled in three years since he picked it. The useful idea is the structure: a sector ban you are willing to break for a specific, stated reason is more workable than one you never break, and more honest than having no rule at all.
Nothing matches this filter.
Verbatim excerpts from the public transcripts (auto-pulled at each mention's timestamp, lightly cleaned). Timestamps link into the video; "source page" opens that commentator's full analysis at this row. Click a mention's header line to expand it (one open at a time). For personal study — not investment advice.