TIP722: Best Quality Stock Idea Q2 2025 w/ Clay Finck & Kyle Grieve
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On today's episode, Kyle and I give an overview of our best quality stock idea for Q2 2025. This quarter, we discuss Booking Holdings, which is a stock I recently added to my own portfolio. To my surprise, Booking Holdings is the world's largest travel company. The company has built a dominant position in Europe and established a formidable network effect that has enabled them to successfully expand globally

leading to market-beating returns for shareholders. But the business doesn't come without risks, as Expedia and Airbnb also have a large share in the OTA industry, in addition to other threats such as AI and LLMs. Booking Holdings is a fascinating business, so with that, I hope you enjoy today's discussion.

Since 2014 and through more than 180 million downloads, we've studied the financial markets and read the books that influence self-made billionaires the most. We keep you informed and prepared for the unexpected. Now for your hosts, Clay Fink and Kyle Grieve.

Welcome to the Investors Podcast. I'm your host, Clay Fink. And today, I'm happy to be joined by my co-host, Kyle Greve, for our Best Quality Idea series, where each quarter, Kyle and I break down a quality stock that we currently find interesting in the market. For Q2 2025, we'll be covering Booking Holdings. This is a large cap company with a $160 billion market cap that I feel hasn't quite got the attention that it probably deserves. So I'm really excited to dive into this one today.

Yeah, you nailed it, Clay. Booking Holdings is a surprisingly large business that I've actually used quite a bit, but more so from one of its ancillary services, which is OpenTable. And it wasn't until I started actually researching booking that I even realized that they owned OpenTable. And so for those of you who don't know what OpenTable is, it's a simple way to basically get a reservation at a restaurant in a specific neighborhood that you're in. I tend to use it a lot in my hometown of Vancouver, but I've also used it abroad.

So the last time I used it, just to give an example, was this Thai restaurant that I went to with my wife. It was super easy. The restaurant is a very well-known, busy restaurant. It's got a Michelin star, so finding a specific time slot was kind of tough. But I used OpenTable, went on, clearly showed the time slots that were available, and it was just a really, really easy and straightforward process. So yeah, I've used OpenTable multiple times in the past, and definitely will be using it again in the future once I travel outside of America. And then

And then Europe, I'm going there this fall with my wife, which I'll be talking about the experience of using some of these online travel agencies today. And I'll be using OpenTable as well when I go to Europe.

Yeah, this is one of the fun things about being a stock investor is just having the chance to learn more about the world, more about the products and services that are out there offered by companies and how people interact with those offerings and get value from them. I was especially quite surprised to learn that Booking Holdings is the largest travel company in the world. So everyone in my ecosystem, at least, knows about Airbnb, Marriott, Hilton, Delta Airlines, United Airlines, Expedia.

and a host of other companies. But I bet that most in my ecosystem would not know that Booking Holdings is the number one travel company in the world, and we'll be getting into why that is today. So I'm also reminded that as a stock picker, I have this nasty habit of finding a smaller company and quickly falling in love with it because it's undiscovered, the growth is solid, insider ownership is resounding.

really high and the potential for growth is enormous. But I think that larger companies can also play a key role in my portfolio as well. So the first reason I think that is, is that I think that the competitive advantages can be stronger in larger companies. So to just illustrate a simple example here, I'd say it's much more difficult to dislodge a company like Amazon and these other big retailers than it would be

for just your mom and pop retailer just due to their enormous scale. And the second reason is that I think I can place a bit more certainty on where a larger business is going to be, say, five to 10 years down the line, which can make it psychologically a little bit easier to hold onto during the inevitable drawdown periods. And I first got intrigued by booking holdings after speaking with Franchois Verschon here on the show.

Last year, Francois made booking holdings a core position in his fund. And impressively, he's been following this name and this industry for well over 20 years. So I ended up initiating a starter position in booking holdings after doing my initial due diligence in March 2025. And I look forward to following along with the company's progress and learning more about them over time.

I'd like to address your point that you just had there about the level of knowledge that people in my circle as well have regarding booking holdings. Basically the exact same as you. I think most people are just completely unaware of it. Maybe they just have seen it once or twice on a search query on Google. I've used Priceline.com, I've used Kayak.com, but I've never actually even connected the dots that there was a holding company that owned both of them. So when I found out that Booking.com was the number one traveling company in the world, I was very surprised as well.

Now, to your point that you just had there about owning larger businesses, I actually completely agree with your point there, even though I tend to just stick with smaller businesses. But one of the inherent weaknesses of analyzing a lot of micro caps and small caps is just the competitive advantages that are inside of these businesses are usually still being built. Sometimes it might be there, it might be present in some degree, but it's not as large and entrenched as some of the business that you have mentioned. Robert Leonard

So just like you, I fall in love with smaller businesses, but I will admit that a lot of them just don't have the same strength of the moat and they just don't have the same types of moats that businesses like an Amazon or a Google or a Meta might have. Now, not only do larger businesses benefit from things like economies of scale, but they also have multi-year time horizons, which they can use to build up other competitive advantages as well. So whether that's in creating or acquiring intellectual property, building

building out network economies, or its ability to be a low-cost provider, these things all take time to develop. And while I spend time examining super niche businesses that the larger businesses tend not to want to even bother competing with, these smaller businesses often have very limited ability to scale to a very, very high extent. And a business like Booking Holdings has substantial runway for growth and expansion, which I really respect.

And I think their competitive advantages are more and more apparent and entrenched compared to those of a smaller company with a much shorter operating history. And today, I'm really excited just to hear more about your own investment thesis on the company as we discuss it further.

So I figure we'll start here with a brief history and a bit about what the company does. So Booking Holdings is actually formally known as Priceline. Priceline was founded in 1997, and they were among a host of internet companies around this time trying to capture the opportunity that the internet offered in the travel industry. So Priceline ended up going public during the internet heyday in 1999. And then after the dot-com bubble burst,

They shifted their focus mainly back to travel, focusing more on travel services and discontinued their efforts in groceries and gasoline and whatnot. Then around 2004, Priceline acquired two European hotel booking sites for $294 million, and they combined the two sites to create Booking.com. And this proved to be an extremely, extremely successful acquisition on Priceline's part. Like I mentioned at the top, this is a

$160 billion market cap company. And today, Booking.com makes up around 90% of Booking Holdings revenue. So much of this discussion is going to be around Booking.com. And we just may refer to it as Booking since the platform and the holding company are close to one in the same. And many people talk about all the companies that went bust from the .com bubble, but Booking.com is one of the few that survived and sort of turned into the company that these entrepreneurs were envisioning

at that time in 1999 when dreaming about the future of what the internet could offer. There were a number of other acquisitions that Priceline did over the years. You have Agoda, Kayak, and OpenTable. And then in 2018, they would rename the company from the Priceline Group to Booking Holdings because of how prominent Booking.com became within their business.

We'll be getting more into Booking.com here shortly. I'll let you highlight that business unit. But Booking Holdings, of course, owns Priceline, which is similar to Booking.com, but it caters more to travelers wanting a great deal and might be more open to booking their travel last minute. And then we have OpenTable, Agoda, and Kayak. So OpenTable, as you mentioned, that's their online restaurant reservation service. Agoda is their online travel agency based in Asia, so focus more on the Asian market.

And Kayak is a travel search engine that really allows users to find and compare flights, stays, rental cars, and vacation packages. And as you'll likely notice, all of these platforms and websites that they own are in the travel industry. So that's really a lot of where their focus lies today.

Right. So getting more into booking.com here, since it makes up the majority of the revenue and earnings. So Booking's business model is actually incredibly simple. So their core business is essentially just to provide online travel reservation, serving as a middleman between travel service providers and then travelers. So let's just give an example here. So let's say you're traveling to Rome and you Google search hotels that are in Rome. So odds are that booking.com is going to be one of the top results

and they will show you the top results based on what you search for. Now, from there, they're going to collect a commission if you end up booking a hotel through their site. So in Europe, booking is the number one online travel agency, and it's the easy-to-go solution for travelers to book hotels in Europe.

It's essentially a platform. And since they have the number one position in Europe and a number of other markets, this creates a very, very strong two-sided network effect for their business. Now, it's really a no-brainer for a lot of hotels to list their rooms on booking because they only have to pay booking if a traveler ends up booking a stay. So booking is typically helping fill rooms that would otherwise be empty. So whatever business booking can send their way only actually serves to benefit the hotel

since they have these fixed expenses and want to fill as many rooms as possible, even if they have to discount some of the rooms to pay out a commission for that stay. And then on the other side, many travelers, especially in Europe, tend to just go to booking to book their accommodations because it just offers the widest selection, kind of speaking to that network effect. Now, booking can get paid by hotels in two different ways. They have the agency model and the merchant model.

The agency model allows it so that the consumers make the hotel booking online, but they don't have to pay anything upfront. Instead, they pay the hotel at the end of their stay, and then booking receives a commission from the hotel. Now in the merchant model, booking will go out and acquire hotel listings and then mark them up on their own website. Under this model, the consumer will pay booking when they book their stay, and then they're allowed to hold that cash until the point of stay, enabling them to have some level of float in their business.

Now today, booking generates about $14 billion in merchant revenue and about $8.5 billion in agency revenue. Back in 2019, agency revenues were more than double merchant revenues, so they've seen a ton of growth in their merchant business.

So the increased merchant business is great because of the float that it provides. And as Francois Rochon mentioned to you, Clay, during your interview with him, it also widens their moat as they have more of a direct relationship with the customer. Since they're accepting payments directly, they're handling customer service and they're collecting customer data all along the way. And since they have more of that direct relationship with more of their customers, this helps them retain those customers, which is a topic we're going to get to in a little bit here.

Now, we had mentioned that for our listeners in the US or Canada, they're likely going to be much more familiar with Expedia and Airbnb than they are with Booking.com. And there's a pretty good reason for that. So Expedia and Airbnb, they're really the leading online travel agencies in the US and Canada, while Booking.com is the dominant player in Europe. So if we look back at their history again, it was back in the 2000s.

Expedia was utilizing the merchant model while Booking was utilizing the agency model. So to reiterate your points there, the agency model does not require the upfront payment to book your stay, while the merchant model does require that upfront payment. So the agency model just isn't as attractive from the business's point of view in terms of the margins they're getting on that, but it's much more convenient for customers. So because of this, Booking was able to get a really strong foothold in

in Europe. And this ended up being just a massive win for their business, which really can't be overstated. Here's why that is. So in the US, over two-thirds of the hotel market, it belongs to the major chains, the Hiltons and the Marriotts of the world. Whereas in Europe, it's the opposite. It's a much more fragmented market with more independent hotels, and many of these hotels have 50 rooms or less. So these independent hotels...

just don't have the bargaining power with these online travel agencies like they do in the US. So they can't demand super favorable terms that the major chains can. So for these independent hotels that can struggle to get their name out there, working with Booking just drastically helps them out because Booking, it's this massive company. They have the best of the best software engineers designing their site.

They're spending billions of dollars on marketing to drive traffic to their site, and all these people are looking to book their next travel experience. To help further illustrate the important differences between the European and the US market, I took a look at the financials for Booking and Expedia. Booking is, by and large, the dominant player in Europe. Expedia is, by and large, one of the more dominant players in the US. In 2024, the gross booking value

was $165 billion for Booking Holdings and $110 billion for Expedia. And both of these businesses obviously generate a ton of traffic and sales volume. So in that same year, Booking Holdings reported an operating profit of $7.6 billion, and Expedia reported an operating profit of just $1.3 billion. So that's over a 5X difference in profits

despite the gross booking value for Booking just being around 50% more. It's just mind-blowing how big the difference is in profits. So that illustrates how much more profitable it has been for Booking to be that dominant player in Europe, where the value offered to these hotels is just significantly higher. And as a result of this discrepancy in profits, Booking Holdings' market cap today is over seven times larger than Expedia's. Robert Leonard :

Yeah. So this is a common theme, I think, with many of the businesses that we've covered here on our Best Quality Idea series. The businesses we cover tend to have some level of competition, but when you just look at the financials of the quality companies against their competition, you can see that they clearly have some competitive advantages that enable them to generate higher profits and higher returns on invested capital. So a few companies that come to mind that we've covered in the past include

Dino Polska, Old Dominion Freight Line, and Appfolio. One metric we can look at to judge whether a business has a moat or not, and whether they've been successful at taking their share of profits is just to look at the return on invested capital. So Poking's ROIC is over 40%, and they have grown faster than the industry for multiple years. Expedia, on the other hand, has a return on invested capital of just 6%, despite having a fairly similar business model.

So like many quality companies, the historical financials show that there's something underneath the surface that is preventing a competitor such as Expedia from chipping away at the profits that are being captured by booking. I also like looking at the margins of a business and comparing them with competitors. This can also highlight where their competitive advantages are. So booking and Expedia are great for these comparisons. So if we look at gross margins, Expedia actually edges booking at about 90% to 86%.

However, once you start examining the profitability metrics, things start to change pretty drastically. So if we look just at net margins, Booking has net margins of 25% versus only 9% for Expedia. Now you could argue that Booking's accounting make their net margins appear a little bit better than Expedia as they don't have an R&D line in their income statement. So let's just look at a different metric. So one that I really like to use is called owner's earnings.

Booking has an owner's earnings margin of 33% compared to only 18% for Expedia. So I think this is just further evidence that booking is simply just a much, much higher cash generating business compared to Expedia. As you pointed out, Clay, the merchant model that booking has pursued has just done wonders for its profitability. And additionally, booking is the lowest marketing cost as a percentage of its revenue, meaning its customer acquisition cost is just cheaper. And since Expedia is somewhat more fragmented than booking, it has less

less synergies between its brands, which also increased its expenses.

I wanted to transition here to get into the competition now that we've given a good overview of the business. So Booking really has two primary competitors, which makes looking at the landscape of this industry a bit simple on our end. So you have Expedia and Airbnb are their two primary competitors. So Expedia was founded around the same time as Priceline. So they were founded in 1996, and they were actually started as a division of Microsoft, and they were spun out in 1999.

And similar to Booking, they also acquired other sites. So they acquired TripAdvisor, Hotwire, and Hotels.com, for example. Expedia, of course, has a very similar business model to Booking as they help consumers and businesses book flights, hotels, vacation rentals, car rentals, et cetera. In 2024, Expedia generated $13 billion in revenue, most of which came from merchant business where they acquired the listings. And then the remainder came

came from their agency business, advertising segment, and other segments. In 2015, Expedia acquired HomeAway for $3.9 billion. And this is noteworthy because HomeAway owns VRBO, which is a major competitor to Airbnb, since it primarily focuses on alternative accommodations. In recent years, Booking has performed substantially better than Expedia in terms of their business performance, and they have far better return on invested capital.

The market tends to agree that booking is the superior business as Expedia's stock price is only slightly above pre-COVID levels while booking has far outperformed the market. In the 2000s, Expedia was the leader in the online travel agency space and they dominated the US market. Of course, enjoyed high margins for a number of years, thanks to that merchant model that they leaned into.

But this allowed Booking to enter the European market by primarily utilizing the agency model initially before they sort of transitioned to more of the merchant model. This is one example in Booking's history where they were really thinking long-term. So while they could have made more money in the short term by utilizing the merchant model in Europe, they accepted lower margins initially in exchange for that market share in Europe, and it ended up paying off tremendously for them. Robert Leonard : So in 2010, Booking

booking would become the world's largest online travel agency. And today, as I mentioned, booking is over seven times larger than Expedia in terms of their market cap. So they've just far outperformed Expedia, at least to date over the past 25 or so years. So while Expedia is a key competitor to watch, booking has consistently proven that they are better at execution, and they are, of course, better at generating shareholder value. Robert Leonard

As you mentioned there, Clay, Booking's other major competitor is Airbnb, which isn't necessarily a 100% direct competitor like Expedia is, but they're also just a more innovative company as they've basically revolutionized travel. And I think they've proven to be a very, very serious threat to hotels. So as many people are going to be aware here, Airbnb focuses primarily on alternative accommodations. So

What's an alternative accommodation? An alternative accommodation is defined as any place that you can stay while traveling that isn't a traditional hotel. So this could include things like private homes, vacation rentals, such as condos, short-term rentals, bed and breakfasts, hostels, guest houses, or unique and unconventional places such as a houseboat or a tiny home. So booking also offers its own alternative accommodation segment, which has been quite successful.

While Airbnb has around 6 million alternative accommodation listings, Booking has about 7.9 million. And it's estimated that the more accurate figure is actually closer to 3 million listings if you account for the fact that many of these units are located in the same building. So there's no doubt that Booking is a serious player in this space, as approximately 35% of their room nights booked are for these alternative accommodations. Booking first added alternative accommodations around 2014 specifically to compete with Airbnb.

And they initially started with professionally managed vacation rentals. And from there, they successfully expanded into other types of units. Now, it kind of makes sense that they would cater more to the professional managers rather than to someone just renting out a room in their house, given that their core business does focus on hotels. While there are countless unique experiences on Airbnb, the offerings on bookings tend not to have near the level of diversity, at least not yet anyways. Now,

Now, I think this is probably good because it helps differentiate booking and allows them to focus more on specific segments within alternative accommodations. Morningstar estimates that in the alternative accommodations industry, Airbnb has about 45% of market share based on room nights booked, whereas booking has around 35% of that market share. Now, the jury's still out on who's going to win that, but so far it looks like there's room for multiple big players in the alternative accommodations market.

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I was quite surprised just how big of a player booking is in this segment of the industry. So on the recent Q4 earnings call, Glenn Fogle, the CEO, he shared that the alternative accommodation segment grew by 19% in the quarter, outpacing Airbnb's quarterly growth of 12% overall. So booking their market share and alternative accommodations is actually increasing. In Airbnb, they do have a larger business.

to defend them a little bit. So they are fighting a bit of the law of large numbers here in that specific industry. In terms of gross bookings, Airbnb reported $81 billion in gross bookings in 2024. And then Booking Holdings, their alternative accommodation segment had an estimated gross booking value of $54 billion. And I'm always curious just to hear people's thoughts on Airbnb because it feels like everyone's opinion is a bit different. And my personal opinion on them has

changed pretty drastically over the years. What do you think of Airbnb as a platform and as a traveler yourself? Yeah. So I've used all these platforms and Airbnb is probably the one I've used the most. And for me, just traveling in general, which platform I use depends on the experience that I want. For things like work trips, I'll just hop on Google and search for somewhere I want to stay and I'll just stay at whichever the cheapest one is. And generally speaking, if I'm traveling a

Outside of the US, I'll probably use a hotel. Whereas if I'm traveling somewhere more local, I tend to stick with Airbnb. So if I'm doing a road trip somewhere, then it's probably going to be an Airbnb, especially if I'm with my family. It's just kind of a nicer feel. So I've always actually had a pretty good experience on Airbnb and I like their platform. So before researching this episode, I wasn't even aware that booking.com offered alternative accommodations. So

Perhaps I will give booking.com a shot the next time I head up to something like Whistler or Vancouver Island. Where I have used booking is when traveling specifically in Europe. I generally use the same strategy in the US as I would in Europe, which is to just Google search a destination, look for the dates, and then allow Google to show me the best prices for a given hotel. So in that case, I don't really have any brand loyalty at this point. It's usually just the low cost provider who wins my business.

I'll get to sharing a bit about my experiences with Airbnb, but I wanted to share a quick example that illustrates how booking and Airbnb stack up against each other just from a user perspective. So we're hosting our TIP Summit in Big Sky, Montana in September, which I'll be sharing more details on at the end of the show here. So I went ahead and searched accommodations for the dates I'll be in Montana on both booking.com and Airbnb.

The listings on booking.com definitely look more generic, if I could call it that. They aren't quite as visually appealing. And you can tell it's just the sites just optimized to provide a wide selection of stays and the ability to customize exactly what you're looking for. You have all these buttons you can click and boxes you can check and tables you can look through. And as you'd expect, one of the top results on booking.com was a hotel. And one of the top results, of course, for Airbnb was a condo.

It was sort of attached to a house. I'd imagine someone's living in the house and they're using this other part of their house as an Airbnb. It was very nice on the inside and had these phenomenal photos. I'd say Airbnb's photos were probably better. I would say that just the user experience and photos are generally better on Airbnb. For example, when I looked at the listing for booking.com, when you scroll down, it just shows this

giant big table of the types of rooms you could do, the price and what's included. It's just a lot of information and it's a lot to go through. And then when you look at the Airbnb listing, it's just very simple. You have the wonderful photos, you have the description that's pretty fairly brief. You have the cost, the reviews and whatnot. It's just a good user experience. And I wonder a bit if booking.com is a bit too cluttered with their website and how they organize everything. Maybe that'll hurt them in the long run, but I could also see

them having pretty good reasons for doing what they do, given the success of their strategy over the years and all the data they've collected. And one gripe I've heard from people over the years with regard to Airbnb is that the cost that they show in the search results wouldn't include the cleaning fees and such. So you'd see one price initially, then when you go to the checkout, it shows another price. When I did this search for Montana, I noticed that only the taxes were added at the end of the checkout. So they seem to have

address that issue and improve the customer experience in that way. So I could definitely see Airbnb appealing to a traveler who just wants a unique experience and might not be as cost-conscious, whereas booking might appeal more to someone who wants to find a good hotel at a pretty good price. And they also want to hang their hat on just a consistent experience that hotels offer during their traveling. And then this brings me to reflect a bit on my experiences with Airbnb. So

As I first started traveling back in college and in my early and mid-20s, I really liked Airbnb because I thought it would typically be cheaper and a higher quality and more unique experience. And I distinctly remember in college thinking, why in the world would anyone want to stay in a hotel? I just thought Airbnb was just going to annihilate the industry, but I was pretty naive back then. And I actually prefer hotels more times than not nowadays. I'm still open to using an Airbnb

Maybe if we have a bigger group or I'm going on a bachelor party trip or something like that. I've just had a few experiences with Airbnb that honestly weren't that great. And I think the reason for that is that oftentimes it turns out that you just get what you pay for. Now I typically like to stay at hotels, mainly because the consistency of the experience is better. It's like when you go to a fast food restaurant chain in any city, you just know what to expect. So if you go to Chipotle in Omaha, in Vancouver, in New York City, the

the bowl I get is going to taste relatively the same. So it's hard for me to put a price on that consistency. And it's not to say that the consistency of hotels is perfect in terms of the noise or whatnot, but you pretty much know what you're getting. And I'll likely use Airbnb again in the future, but just be a little bit more careful about the accommodations I select and not try and go bargain shopping on the platform to save money. It's also just important to remember that the trips that people take are oftentimes the highlight of their year. So I think

many people like me who are willing to pay a bit more for a hotel, for example, if they're more certain that the experience is going to be positive. And I also know that Airbnb is well aware of this consistency issue and will likely improve their listings going forward to prevent bad experiences from happening. It's also important to remember that the market really doesn't care what I think. So Airbnb, they've doubled their revenue since 2019 and will very likely continue to grow for many years

as they penetrate more and more markets globally, just like Booking Holdings is. Then you look at the management team of Airbnb versus Booking. You can tell that Booking, I would call it a bit more corporate, if I can call it that. Whereas Airbnb is, of course, led by Brian Chesky. He's more of a product guy. He's likely much more into the product than Glenn Fogle, for example. Chesky is also highly inspired by people like Steve Jobs. You can't discount someone who's essentially

essentially revolutionized the travel industry, which is just remarkable. I'm reminded of a quote from Morgan Housel on his podcast. He had said, good marketing wins in the short run, great products win in the long run. And that's sort of what reminds me of booking and Airbnb here. If you browse through bookings and Airbnb's website, it's just hard to get excited about booking relative to Airbnb. Airbnb, of course, has these amazing photos. The site has a sleek layout. You can tell that they're a technology company.

and they just invented their own segment and travel. Whereas Bookings is pretty plain. It's optimized to try and get many customers converted, and they're just excellent at marketing and driving customers to their site. It's highly optimized. So when we look at the marketing spend, for example, Airbnb spends $2 billion on marketing, whereas Bookings spends over $7 billion. So that points to the brand value that Airbnb has

has built to date in the customer mindshare they have. They don't need to spend near as much on marketing in aggregate. And in January of 2025, Booking had 50% of their website traffic come directly, and Airbnb had 62% of their traffic come directly to their website. So that also points to Airbnb probably having a bit more of a memorable brand and a bit more customer mindshare, especially in the US. Robert Leonard

Yeah. So just before we get into competitive advantages here, Clay, I want to talk specifically about what you just talked about comparing the Airbnb platform to the booking.com platform. I completely agree with you. Airbnb platform is just way more user-friendly, looks better. But it's funny because I went on to google.com to search for hotels because like I said, me and my wife are going to Europe. And so when I went to Google, I found a hotel that I liked. And when you go to that hotel, it gives you a list of prices.

And it'll tell you the type of room that you get in a specific place. But when you use Google, it doesn't actually tell you what you get in that room. So I actually ended up going on to booking.com and looking at the details of the different room offerings. And even though, yes, it was very ugly and not necessarily the nicest thing to look at, it was also just very, very helpful because it told me specifically what I get, what type of view I have, what kind of amenities I get.

So, you know, in that sense, I actually found it really helpful. You know, obviously if I was looking at it on my phone, on an app and I'm comparing it to Airbnb, yeah, Airbnb is going to look way better. But I just thought I wanted to add that because, you know, even though it can be seen as a negative, there's also some positives and kind of being more corporate and, you know, less showy, I guess, compared to Airbnb. As we just spoke about Airbnb, I think is definitely a key player to watch in the industry. I think, you know, Brian Chesky, he's this visionary at the top of that company and he's obviously produced a lot of value.

And even though booking.com has this 11-year head start, Airbnb has still managed to take a large share of the online travel agency industry. But I think that just because a company is innovative and forward-thinking, it doesn't necessarily mean that they're going to generate a ton of value for shareholders or that they're going to even win the battle. Now, this brings us to discuss Booking's competitive advantages. I think it's clear that Booking has some very significant competitive advantages.

The first one to highlight is simply just their network effect. In many markets, particularly in Europe, booking offers the widest selection of hotels to book, which incentivizes customers to book a hotel specifically on your site rather than using a competitor just due to the vast selection of options. And since they have the largest customer base, this incentivizes hotels that aren't on booking to go to them instead of going to a competitor. And as booking attracts more and more hotels, the site becomes increasingly more valuable as consumers hop onto it, creating this virtuous cycle.

So when I was thinking about this, in some ways, I kind of think that it resembles Amazon in terms of its network effects. So people go to Amazon because they know that they're going to receive great service, they're going to get a wide selection of products, and they're going to get competitive prices. And I think that booking offers very, very similar advantages. But there is kind of one primary difference here, and I think I've already kind of spoken about that, which is that if I want to buy something off of Amazon, I'm going to go specifically to Amazon's website to buy it.

And like I've already discussed here, when I travel, I'm going to google.com and then I'm searching for that destination and I'll see what Google comes up with. And a lot of times, yes, booking will get my business, but not all the time. So I think Amazon still has this edge in this regard because it can more easily keep its customers on its own website.

But I did look up an accommodation on the Amalfi Coast, specifically on Google, which I'm going to be going to. In that case, I looked at listings and they had tons of them. So there are listings from Expedia. There was listings from booking.com. There are listings from the hotel itself. There was hotels.com. And then even a few other smaller players I've never even heard of. So booking.com is supposed to have this price parity clause that stipulates that hotels cannot charge less than the rate that's displayed on booking.com.

However, there are certain countries that have banned this rule, such as France, Italy, Belgium, Portugal, and Austria. So when I searched for the Amalfi Coast in Italy, the cheapest option that I found was actually offered by the hotel itself and not booking. So I think this is a slight knock, but these countries are just a small subset of bookings offering, so I don't think it's too impactful. And then, you know, when I look at a listing in London…

at a specific hotel that I wanted to stay at. The one that was the cheapest was actually Agoda, which is a subsidiary of Booking, which had the best price. Another way businesses can strengthen their competitive advantages is to have the ability to just outspend their competitors on growth and marketing, which allows them to make their moat even stronger. I love finding a company whose moat only widens over time, which I think appears that Booking is doing very, very well.

To address your point on not directly going to a booking site like you do to Amazon, what I've heard from a lot of people in Europe is that it seems that a lot of them do seem to use booking. There is the question of whether they're going directly to the site or not. It does seem to be quite the dominant player there. We do have some statistics related to those that do directly go to the site or book through their app, for example. And then they also have the loyalty program.

While the hotel itself might offer a better price, it could be argued that a number of customers will still want to use booking just due to their loyalty program. And keeping touch with the competitive advantages here, the network effect is definitely a big one, probably their biggest competitive advantage. The next one I would mention is just their scale. You kind of touched on this. Their scale allows them to hire the best developers, hire the best marketing professionals to learn how to find customers, then how to...

just optimize their website and convert customers. Then you also just have the brand. Someone who's familiar with booking in Europe might also use booking when they go to Asia, go to the US. One thing they've done to retain their customers is use their loyalty program to drive repeat bookings across all of their platforms. This also includes Priceline, Kayak, Agoda, their other websites.

And loyalty customers earn points on all travel-related purchases, and this encourages them to just stay within Booking's ecosystem. There's different tiers, and loyalty customers get access to things like 10% to 20% discounts and other perks like free breakfast or room upgrades and whatnot. So here's an interesting stat on their loyalty program. Their level two and level three loyalty members, they book over 50% of Booking's room nights. Robert Leonard

As booking continues to grow, they're going to be able to provide more benefits to their loyalty members, which further widens their moat as their competitors likely just aren't going to be able to provide the same deal just because booking has that scale advantage. It's also worth mentioning that Airbnb does not have a loyalty program and Expedia does. Booking, they operate in practically every country in the world. So brand, I think, is something else that ties into this.

Travelers want to book their flights with brands that they trust, brands they're familiar with. So especially when you're in a foreign country, you never know what you're sort of getting into.

So turning to the management team here. So the company is led by CEO, Glenn Fogel, and he's been the CEO since about January of 2017, but he's actually been with the company since way back in February of 2000. I think Fogel has done a wonderful job of leading the business. Since he became CEO, shares of bookings are up by over 200% while the S&P 500 has risen by around 130% over the same time period. However, he is a very, very highly compensated CEO. So

In 2023, he made $46 million, most of which came from stock awards, which include both performance stock units and restricted stock units, as well as a cash bonus. So his salary is only $750,000, but the vast majority of his compensation, of course, is coming from stock and bonuses. So his compensation in 2023 was also very good, specifically because 2021 and 2022 were such good years for the business after the COVID rebound. Robert Leonard :

But during that period, revenue grew by over 50% in both of those years due to the huge drop off in travel in 2020. And since bonus compensation is tied to revenue growth, total shareholder return, and EBITDA, I can see why his bonus was so high, even though it does still seem pretty excessive to me.

To be fair, it appears that being a CEO in the online traveling agency, whether that's booking Expedia or Airbnb is just a very well-paying job. So Expedia's CEO earned 18.2 million in total compensation in 2024. Brian Chesky, Airbnb CEO, didn't have any of his options vest in 2024. So his total comp was a paltry $300,000. However, he has 9.6 million unvested options remaining that will vest by 2030 contingent upon specific performance metrics.

And today, those are worth $1.2 billion. As for insider ownership, Fogel owns over $80 million worth of stock, which is substantial, but I don't think it's the perfect alignment with shareholders relative to the compensation that he's gotten.

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Out of curiosity, I also looked up the average compensation of a S&P 500 CEO. It was $15 million. Glenn Fogle, he got paid $46 million in 2023, which is a bit high, even when you consider that booking is a much bigger company than a lot of other companies in the S&P. So Tim Cook, for example, he made $63 million in the same year. And Buffett, he seems to have no issue with that. And you

And when I was reading through management incentives and shareholder alignment, I posed the question to myself, would I rather invest with the management team with exceptional performance and a so-so incentive structure, or would I rather invest in the opposite where you have exceptional incentive structure, a so-so performance in terms of the business? It's pretty clear which one I would choose if I had to choose between the two. And it's also interesting that in aggregate...

Their stock-based compensation levels aren't nearly as bad as you would think, given that they're a tech company. In 2024, they had stock-based comp of $600 million. That's a 0.3% dilution rate, and it's a 2.5% of revenue. That seems pretty reasonable to me. Airbnb, on the other hand, they have $1.4 billion in stock-based comp, which is a 2% overall dilution rate.

And then when I look at the other executives, you know, I see a similar dynamic to Fogel where their total comp is pretty high, decent amount of skin in the game, but not quite as much as I'd like. Yeah. You looked into the incentive structure for management. So how about you dive into that?

Absolutely, Clay. So first off, I think that's a great point about the exceptional performance and a somewhat subpar incentive structure. I think that as long as a company is tying incentives to performance and doesn't allow performance bonuses to be just obscenely high, if management just hasn't added any value, then I think high pay can be justified. So let's look here at how management is incentivized specifically based on performance. So

Booking, like a lot of other companies, has both a short-term and long-term bonuses. So let's go over the short-term bonuses first. So short-term bonuses are cash incentive bonuses that are based on a combination of company financial performance and individual performance. So the company's financial performance is based on adjusted EBITDA.

Now, for most businesses, I think this is just a very mediocre performance metric. However, Booking has done a very commendable job of specifically excluding share-based compensation from adjusted EBITDA, which I 100% applaud them for because there's very few businesses that'll do that. Now, as for individual performance, they're based on several intangible factors, such as the achievement of strategic and operational goals, leadership, talent development, risk management, and ESG contributions.

So the short-term bonus is capped at 200% of the target bonus. So in 2024, the target bonus was $6 million. This means that if all KPIs were achieved, Fogel could earn up to about $12 million in short-term incentives. Fogel ended up earning 7.8 million in short-term incentives, which is about 130% of the target. Now let's look at the long-term incentive program. So the long-term incentive program is comprised of both the reserve stock units and the performance stock units.

So, RSUs make up 40% of the long-term incentives and they tend to vest over time incentivizing managers to stick around. The PSUs are performance-based and are linked to things like total shareholder return, relative shareholder return versus large cap tech stocks and industry comps.

and specific metrics such as revenue growth and EBITDA targets. So PSUs are tied to company performance over a three-year period. So looking at this, I think the incentive program is decent. It's not the best I've seen, but it's also not the worst. I love seeing performance metrics that are based on capital efficiency and per share metrics, but it's also just pretty rare to see this. I'm not a huge fan of total shareholder related performance metrics because I think a CEO can often

receive a very large bonus simply due to market sentiment. So at least they have the three-year period to look at. I prefer metrics that focus on value creation. So seeing that they have metrics at least that are in regard to revenue and EBITDA, I think that's decent because I think if the business continues driving revenue and EBITDA, the business is probably going to be building its value for shareholders as well. Robert Leonard

So despite Glenn having been paid a pretty substantial amount over the last three years, he's also compounded the share price by approximately 25%. And so to say that this was driven purely by the market is not accurate. So over that same time period, he's compounded revenue at 18% and EBITDA at 24% over the same period. So overall, I don't think shareholders are complaining very much. Robert Leonard

Robert Leonard : Yeah. And when you dive into the reports released by the company and the earnings calls, pretty quickly you'll run into them chatting about artificial intelligence and similar to AppFolio, which we covered last quarter, Booking is leaning pretty heavily into AI. I was tuning into Glenn Fogel's public appearances and he's definitely not shy to discuss it. One of the things he highlighted was that Booking has the data to deliver the best customer experience.

They have the data to see what types of flights and accommodations you and I tend to book, or what parts of the city we like to stay in, our preferred price range, et cetera. And they can customize the search experience based on that data using AI and other technologies. Another example is just in the realm of customer service. So we all know how frustrating it can be when we're in an airport and we get a text that our flight's canceled. And I don't know about you, but

I oftentimes don't get much of a solution and there's a line at the customer service desk that goes 50 people long. It's pretty frustrating. So say I'm flying with Southwest Airlines, they aren't going to tell me, "Hey, there's a seat open on a Delta Airlines flight," for example. Whereas booking can step in, they're totally indifferent to where customers are going and they can help offer a solution. That's just one of countless examples where AI can play a pretty critical role in providing value to consumers.

And after your flight gets canceled, they might help you reschedule your dinner reservation that you're going to be late for now. So the opportunities to add value are just endless and booking has the scale to invest as much as they need to, to provide that high quality experience. So given management team's overall shareholder focus, I would definitely expect them to utilize AI to their advantage to improve the experience for customers. But it's tough to say how well they're really executing on this front because if you're

Look into Expedia and Airbnb's reports. They're making very similar statements.

All right. So now we're going to turn to the risks. I think there's a few risks worth mentioning regarding booking holdings. The biggest short-term risk probably relates to just being in the travel industry. Travel is inherently cyclical and it's sensitive to economic conditions. So whenever the economy enters a recession or we experience an economic slowdown, you tend to see consumers and businesses cut back on travel.

which would lead to, of course, less revenue for booking. I think this is just a short-term risk that investors just need to be comfortable with if they're going to own this, any company in the travel industry. And if you look back at COVID-19, of course, this is probably the worst thing that could have possibly happened to booking's business in such a short period of time. Global travel came to a standstill, but booking was profitable every single quarter in 2020 and 2021.

The share price declined by around 50% really quickly around March 2020, but it still managed to recover and reach new highs by the end of the year. So given the strong profitability and the rock solid balance sheet they have, they should be able to weather through any short-term headwinds just fine. So I'm not really concerned on that front. You just might see the share price get punished just due to the cyclicality. Robert Leonard

And it's also worth mentioning, of course, the current geopolitical tensions. So in light of the US tariff announcements, it's hard to imagine global travel not taking at least a temporary hit. Tariffs could, of course, impact the economy, which would impact the travel industry. Maybe some travelers are going to do just less traveling in the US, which wouldn't be catastrophic to booking given that they have fairly limited exposure to the US overall.

There's short-term risks with any business, but when you zoom out and look at the free cash flow per share for booking, it's a chart that's just up and to the right as long as you hold on long enough. So the free cash flow per share in 2015 was $58. In 2024, it was $231. So that's a compounded annual growth rate of nearly 15%. And that's pretty incredible given that in the midst of that growth and free cash flow, they went through a once-in-a-century pandemic in 2020. Robert Leonard

And looking at some of the longer term risks, I think many investors are going to point to Google as a potential threat to their business. So part of Booking's growth strategy historically has been to spend a very substantial amount of money on marketing, specifically at Google, to drive customers to their website. And they've been extremely successful at doing that. So on the one hand, Booking could face higher marketing costs over time if Google's advertising rates increase, which could make it less profitable to acquire new customers from Google. In 2024, Book

Booking holdings in aggregate spent about $7.2 billion in marketing. Now, according to Statista, over $3 billion of those dollars was spent directly on Google advertising, which would likely make them one of Google's largest advertising customers. Booking is well aware that a significant portion of its growth is coming from Google search. So in order to hedge this risk, they want to retain those customers and have them book trips directly on their website or through their own app. Their loyalty program is one example of

of their efforts to retain customers who land on their website for the first time, rather than having to just rely solely on Google continuing to send them traffic. So a member of our mastermind community highlighted to us how Booking's advertising efforts are increasingly becoming more like those of Coca-Cola or Visa. They're spending on major sporting events such as soccer games and NFL games, and they were running ads for the Super Bowl this year. So I think for people who are just getting into traveling, they're increasingly more likely to use Booking because of how recognizable that brand is now becoming.

And the number of travelers who book through their app has also increased over time. So it's clear that what they're doing is working. So in 2019, around 30% of room nights were booked through their app. And in 2024, that's actually increased now to 55%. So I think this data point also shows that booking's moat is continuing to expand as they're becoming less and less reliant on Google and continue to capture the mindshare of millions of travelers worldwide.

Yeah. So Google could, of course, increase the marketing costs. And for a number of years, people have just addressed the risk that maybe Google will enter the industry directly. People have long said that that's a big risk, given that booking receives so much traffic from Google. This is sort of a tough one. I think Google entering the OTA industry in a big way is possible, but it's probably not too likely

just given that it's just not a part of their core competency. Booking and Expedia, they make up a fairly substantial portion of Google's revenues for one. If Google chooses to compete directly in the OTA space, they risk losing many billions of dollars in revenue each year if Booking and Expedia pull down their spend. Plus, Booking has over 24,000 employees globally. This is

an army of marketing professionals, software developers, and a massive support team that is working directly with hotels and other accommodation providers. So it isn't simply a matter of setting up a website, running your traffic through it, and calling it a day. Google would have to increase their headcount substantially in order to gain significant market share in this space and deliver a similar value proposition to travelers. And as more travelers book directly through booking,

and their supply of listings continues to grow, the difficulty to disrupt them only increases over time. So I think this risk, as booking gets more people on their loyalty program, booking through the app and whatnot, this risk is decreasing with time because it just becomes more and more difficult for a new entrant to be a big player. I'm reminded of a comment that the CEO made on a recent podcast where he said he's been with the company for 25 years and

and he's heard for 25 years that they were going to be disrupted. So here they are today with all-time revenues and all-time profits. Initially, people would say the hotels, once they set up their websites, they're going to disintermediate booking. Then everyone said it's going to be Google search. And now today, everyone's saying the AI models are going to disintermediate them. But I also wanted to share another quote here from the CFO. He gave this quote at a recent conference. He stated, I think what sometimes is misunderstood is

Travel sounds very attractive at the surface, but it's actually complex and messy below the surface. The fulfillment, the payment, the customer service, the partner management, the regulatory environment, dealing with the data in the right way, then something goes wrong. How do you solve for that? So far, if you look at it, you really need to be a specialist in that whole operational segment of travel.

Even Google never stepped into it. You could say that they had a very good possibility if they wanted to, but they never said, you know what? I want to be a part of that value chain, end quote. So the CFO, of course, has every reason to say that their business is very complicated. So we'll take it for what it's worth.

Yeah. And so another thing I wanted to add to your point there about Google competing is that I think that generally those are just bad ideas. You're basically competing with your own customers. So I've been looking a lot at Coca-Cola lately and during their really good run up in the 80s when Buffett was interested in them, Roberto Goizeta, their CEO, he would always actually make fun of Pepsi specifically because he was like, they're taking their eye off the ball. We're trying to steal all the market share.

to do with drinks. And here you got Pepsi and they're opening up different pizza places and they owned all sorts of these different subsidiaries that were selling food and snacks and stuff like that. And so he felt that it really got their eyes off the ball. And then on top of that, obviously this is just soft drinks. This is super simple, whereas complex engineering is a lot more difficult. So if a simple business such as Coke and Pepsi have problems integrating or trying to have

you know, these new subsidiaries that are competing with their customers, I can only imagine how bad that would be for a business like Google to do the same thing.

It's just so tricky to me to wrap my head really around how big the moat is around some of these tech companies, because of course there's situations where oftentimes you run into value traps and then there's other situations where it just seems like some of these businesses simply can't be stopped, which seems to be the case with booking. So I think it's time to turn to the valuation here. So I think forecasting an expected return for booking is pretty straightforward in my view, at least.

As of the time we're recording, we're sitting here on April 29th, 2025. The share price is around $4,900 US dollars. And the company actually reports earnings at the end of the day. So odds are, once this goes live, the share price will have changed by then. The return of any stock is really only driven by three factors. We have the growth in earnings, the change in the PE ratio, and then the capital returns, which includes dividends and buybacks. So

Booking does pay a dividend. It's less than 1% of a yield, so it doesn't play a major factor here, which helps simplify things a little bit. Booking trades at a pretty reasonable multiple. I like to look at the EV to EBIT, which is the enterprise value divided by the earnings before interest and taxes. That multiple is around 20 as of the time we're recording. If we assume no change in the multiple, then that really doesn't factor into our expected return. So looking back historically, this is a pretty normal

valuation level, I would say. And then the share buyback yield, that factors into the capital returns. That yield is around 4%. So that's simply just looking at how much are they looking to allocate to share buybacks and then divide that by the market capitalization. The company's really been a share cannibal over the years. And I was surprised when I look at 2024, they retired

nearly 7% of the shares. So this 4% metric might be even a little bit low going forward. It really depends on the valuation and how much they allocate to share buybacks. And then we have earnings growth, which is really just the key input here in looking at our future returns.

I would personally expect 8% to 10% growth in earnings on the conservative side over the next, say, five, 10 years. And when we add that earnings growth to the buyback yield, that gets us to around a 12% to 14% expected return. And I think that's quite good when you're comparing it to something like the S&P 500. It's trading at a very similar earnings multiple, and it potentially has earnings growth of, say, 5% to 6% over the next five, 10 years. Robert Leonard

In earnings growth of 8% to 10% for booking, that might even be on the conservative side. In 2024, their adjusted EPS numbers grew by 23%. I think they're still experiencing a bit of a tailwind post-COVID, kind of seeing a reversion back to the mean. So the question is, why would I expect booking to grow earnings faster than the overall OTA industry or faster than the S&P 500? I think the primary reason is that

As Fran Schwab or Sean mentioned on the show here, and I think I agree with him, they're still in the middle or maybe slightly later stages of hotel reservations simply going online. So booking is capturing more of that market globally. And they've proven that over time that they're really good at capitalizing on that trend. According to the business research company, the online travel booking market is expected to grow at around 10% per year over the next five years.

That's from $648 billion to $942 billion. So massive market. If booking can just grow in line with the industry, then revenues will grow around 10%. Earnings are likely to grow faster just due to operating leverage and margin expansion. In 2025, management guided for 8% growth in bookings and 8% growth in constant currency revenue and 15% growth in earnings per share. So it seems that the market...

just isn't fully appreciating the quality of Booking's business and the growth. So we look at their dominant position, their network effect, their excellent capital allocation skills for management. I just don't think it's unreasonable to expect at least say 12% growth for shareholders in terms of their shareholder returns. I would also like to mention, I've been thinking a lot about this, is that I think in this internet economy,

that sort of kicked off in '97, '99 when these companies got started. We've seen that network effects have created some of the best business models in the world. The largest companies in the world are the companies like Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia. I think all these largely depend on network effects. And network effects can be highly profitable and very difficult for competitors to dislodge. And as books

As booking continues to scale, it gets more and more difficult to compete with them. And then they're going to be able to scale up, say, their advertising business, for example, similar to what Alphabet and Meta has done, allowing them to further monetize their platform and increase margins even further. And I guess to play a little bit of devil's advocate for myself on that last point, booking, they don't own the vast majority of the OTA industry. There are competitors. It's just not a winner-take-all market.

But it seems that so far, they've just done an exceptional job at capitalizing on that trend for reservations going online. I also like that this is just a play on the middle class growing globally. So especially the middle class growth in Asia, that's where a lot of their growth is in recent years. Global travel is just set to increase more and more as more people have the means to do traveling. I think it's part of the human experience to want to travel and see other parts of the world and

as more and more people can afford such experiences, it's nearly certain that they're going to want to participate in those experiences as well. And just looking at my portfolio, I don't quite have the conviction yet in booking that I do, say, Topicus or Lumine, which are top positions in my personal portfolio. I certainly have higher growth expectations for the latter, but they're also trading at higher valuations. But I just think booking's network effect is so large and established that

I fully expect them to continue to do well for the years ahead. Hence why I started an initial position. And that's when I'll continue to monitor going forward and keeping an eye on it and see if the valuation gets more attractive at certain points in the next couple of years.

Yeah. So I don't really have any arguments with any of your assumptions there. I think the valuation seems pretty fair at today's level in terms of the historical pricing metrics, but the business should continue increasing intrinsic value at a pretty good rate. And I think investors have a pretty good chance of being rewarded with the return that you outlined. The other thing I really appreciate was some of the additional value drivers that you mentioned. So if booking can successfully continue attracting more and more people onto its platform, whether that's booking.com or its app,

it should be able to, at some point, generate additional revenue from advertising. And since they are kind of this low-cost provider, they could employ a strategy very similar to Amazon, where customers, in this case, hotels, aircraft, flights, and car rentals, just go on to booking.com and they just pay them money and then they get higher up in search results. It's pretty simple. So from my research, it looks like kayak.com is already doing this.

So I think booking, to your point there about data, they already have a lot of data specifically from Kayak, specifically from their other subsidiaries, and then of course from booking.com. So once they feel like they have enough traffic or people using their website, I'm sure they'd be able to scale that out pretty fast once they feel that they're ready. And then just looking at advertising, Expedia is already doing this. So Expedia doesn't disclose their advertising revenue, but from what I was able to find, it actually grew it by 25% year over year in 2024. So

That could just be another very high margin way for Booking to start adding more additional cashflow into the future if its operating business maybe doesn't grow at the same rate that it has in its past. Another thing I've been impressed with is Booking's ability to just expand to new business segments. So we already highlighted how successful they've been in the alternative accommodations market, but in their recent earnings call, Fogel highlighted the growth of their flight business as well. So

In 2024, they had 50 million flights that were booked and about $13 billion in gross booking volume, which is a 38% increase year over year. Now, I wouldn't be surprised if they're able to continue to successfully expand to new segments into the future as well. And this will improve the overall travel experience for their customers and offer better value by leveraging the scale of their different business units.

Yeah, of course, booking.com has a nice tailwind in terms of travel going online, in terms of the hotels. I also like that they're seeing a lot of success in these other segments. You have alternative accommodations getting market share on Airbnb. You have the flights business that is just taking off right now as they're sort of figuring out how that's going to work into their business model, the advertising, and then they're, of course, working on AI. And it seems like they have some interesting initiatives where AI is going to help improve their customer service, improve their cost-sharing,

structure and whatnot. So super excited to see how this one pans out. And here in a couple hours, we'll be seeing how their Q1 earnings pan out. So I think we covered the business pretty well today. Thanks a lot for joining me here, Kyle, and sharing your insights on what you learned about the business. Before I transition to discuss our summit event, I wanted to mention that we're accepting submissions for a company that we'll cover in the next quarter, Q3. So if you email me or Kyle or message us on LinkedIn, a short pitch of a company,

that you think we should cover on the show, and we end up covering it, we want to send you a signed copy of William Green's phenomenal book, "Richer, Wiser, Happier." Just a few criteria I'll outline here just so we don't get a bunch of microcaps or obscure companies here. So the main criteria we're looking for is it needs to be a quality company, similar to what we cover in this series. The valuation needs to be reasonable, implying an expected return of at least 10% to 12%. And we would mainly consider businesses with a market cap in

in excess of $10 billion US dollars. So yeah, feel free to send your submissions to us and earn your chance to potentially get a signed book from William Green. All right. So transitioning to the summit here, I wanted to share just quickly more information about this special event we'll be hosting this fall. We're referring to this as the TIP Summit. I've been to a number of different investment conferences over the years, and my favorite part of these conferences

are simply the people I get to meet in the relationships that are built at the event itself. I can oftentimes skip a lot of the speakers, the dressing up, and a lot of formalities and whatnot. So with the summit, we'll be taking many of the best parts of an investment conference. And this includes networking with high-quality people, and then further enhance that experience by going somewhere fun like the mountains. So in late September, we'll be hosting

the summit in Big Sky, Montana. And we'll be inviting around 20 to 25 members of our audience to get together, share ideas, build meaningful relationships, and enjoy delicious food in just a beautiful setting here in the United States. And it's probably the weekend I'm personally most looking forward to this year. I've been to a couple of very similar events in the past, organized by a friend of mine, and it's definitely a good chance to sort of step away from the day-to-day grind, meet really interesting people,

and in a way have a lot of the vacation just planned for you. So if spending a long weekend with us in the mountains with a bunch of like-minded investors sounds interesting to you, you can learn more on our website. That's theinvestorspodcast.com slash summit, theinvestorspodcast.com slash summit. Again, we have very limited availability, so be sure to check it out real soon if you're interested. And of course, anytime, feel free to shoot me an email or a message on LinkedIn if you have any questions on any of that.

So with that, I think we'll close it out there, Kyle. Thanks a lot for joining me. Pleasure as always. Thank you for listening to TIP. Make sure to follow We Study Billionaires on your favorite podcast app and never miss out on episodes. To access our show notes, transcripts, or courses, go to theinvestorspodcast.com. This show is for entertainment purposes only. Before making any decision, consult a professional. This show is copyrighted by the Investors Podcast Network. Requested by the Investors Podcast Network.

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