Edition #2 — June 2, 2024

The best investments make hard things look easy

Company: Copart, Inc. (CPRT)

Summary: True winners dominate complex, boring-seeming markets — and make their competitive edge look ‘obvious’ in hindsight.

Copart runs salvage car auctions worldwide. Sounds dusty? Not so fast — their mastery of logistics, relationships, and technology is hidden in plain sight.

• Quality: Mission-critical B2B platform, high returns on capital, minimal direct competition.

• Moat: Network effect: more buyers & sellers lead to more liquidity. Huge infrastructure spend is hard to replicate.

• Management: Decades-long operator/founder focus. Relentless cost discipline. Stellar capital allocation track record.

• Valuation: Long-term compounder trading for a fair — not cheap — price. Worth it for quality?

• Risks: Macro downturns, regulatory shifts around auto salvage and insurance.

Verdict: Copart isn’t flashy, but it quietly dominates a profitable niche. Great compounders often look boring on the surface — that’s by design.

Next Steps: Consider for portfolio core holding; monitor valuation drift.

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