Episode 116: Guzman Deep Dive, Reserve Bank Smashes Small Business (again), Australian Shareholders Get Shafted, Best Selling Authors and Uber Eats Fails Again
The guys go deep into Mexican fave Guzman y Gomez, the RBA credit fee ban, why imputation credits aren't as shareholder friendly as they appear, Adir's book review, and Adam's Uber Eats pain.
The Contrarians catchup
After complaining about loneliness and not getting to work in an office, Mike opted to work from home to produce Episode 116, which Adam was obviously a big fan of.
Adir’s book club is back, recommending ‘Why Fish Don’t Exist’, which he describes as “part historical biography, part personal memoir, part horror story and part philosophy”. It changed his view on the “existential nature of life”.
The guys discuss the best selling authors of all-time, starting with Malcom Gladwell, who has sold over 23M books in North America alone (and charges $250K AUD for a one-hour speaking engagement). Listen in for same insane numbers by the world’s best selling authors. Adam is surprised that six of the top 10 are women.
In Germany, in the first 18 months following a book’s publish date, there can be no discounting of the book’s recommended retail price, making books materially more expensive.
Adam’s fail of the week: ordering an Uber Max from Melbourne Airport took 15 minutes because his driver had to wait an hour and a half to get through to pick up a passenger. Adam said “they’re such flogs at Melbourne Airport, they don’t care about travellers at all”.
Adam’s problem with Uber Eats (versus booking a ride through Uber) is that there’s no accountability or brand attached to the driver because you can’t rate them, so the quality is inferior.
Adam references this article in The Wall Street Journal, titled ‘The ‘Smart’ Restrooms That Can Solve America’s Public Bathroom Crisis’.
Meta, the parent company of Facebook and Instagram, has acquired a minority stake in EssilorLuxottica, the world's largest eyewear company. Adam and Adir both regularly wear their Ray-Ban Meta glasses.
Reserve Bank smashes small business (again)
The Reserve Bank has drastically demanded that debit and credit surcharges be banned in Australia in a move they claim would save consumers $1.2B each year.
Adam: “Our hands are not clean in Australia in this regard. We're almost worse than the US because at least over there, it's obvious Trump's pressuring Powell. At least he's transparent. And everybody knows it's a bit of a joke and Powell can rightfully buck against it. So we talk about an interest rate cut and unemployment being increasing from 4.1 to 4.3 as if this is like some sort of horror result like participation went up.”
Adir: “You can still be optimistic about this country. This country still functions in a way where there are still people in high office in this country that believe in the public good and the fundamental importance of liberal democracy, more so than what's going on in the US and other parts of the world at the moment.”
Guzman Y Gomez deep dive
Adir said “let’s dig into the whole enchilada and unwrap Guzman Y Gomez” (he didn’t actually say that).
According to Adir’s calculations, Chipotle (Chipotle Mexican Grill, a Mexican restaurant chain in the US) is worth around $72B, with $18B of revenue and 3700 stores. Guzman Y Gomez revenue will pan out to roughly $450M from 239 stores with a market cap nearly $3B.
Listen in for an incredibly thorough analysis of how healthy GYG’s business actually is and whether you should be more excited about Zambrero.
Adir: “How in the hell you run, report and analyse a business that is heavy on lease expenses in this environment is crazy. They have a measure called segment underlying EBITDA. And the fact that they have to do so much work to work this out and then to teach investors about it, it's crazy. However, it's not called EBITDA with the rent put back in or EBITDA with the rent adjusted, it's called segment underlying EBITDA.”
Five other stories worth following:
Alaska Airlines temporarily grounded over 200 planes due to a computer network outage, later extending it to Horizon Air. The three-hour halt disrupted operations, with Alaska warning of ongoing delays. The incident closely follows last year’s airline chaos caused by a faulty CrowdStrike update, as noted by NBC News.
Japanese Prime Minister Shigeru Ishiba will remain in office despite his party losing its upper house majority. Ishiba cited the urgency of addressing inflation and negotiating a US trade deal as reasons for staying on. The Liberal Democratic Party now holds a minority in both parliamentary houses, increasing political pressure.
Astronomer CEO Andy Byron resigned after being filmed kissing Chief People Officer Kristin Cabot at a Coldplay concert. The viral “kiss cam” moment triggered an investigation, with Cabot placed on leave. The incident became meme material, even recreated on the Phillies’ jumbotron at Citizens Bank Park in Philadelphia.
WNBA All-Stars protested for better pay during Saturday’s game, wearing “Pay Us What You Owe Us” shirts. Players seek revenue sharing similar to the NBA’s 50%, compared to their current 9.3%. The league offered a fixed percentage, but players want salaries tied to business growth. Talks remain ongoing.
Lovable, an AI “vibe coding” startup, raised $200M at a $1.8B valuation just eight months after launch. It enables non-developers to build websites and apps, boasting 2.3M users. The rapid rise fuels hypem and skepticism, around startups with sky-high valuations and trendy buzzwords like “vibe coding.”
