MELI

MercadoLibre is the portfolio's only meaningful exposure outside the United States, and its economics are driven by household formation, credit access and payment adoption in Latin America rather than by enterprise technology budgets. That makes it one of the few holdings whose results do not depend on the AI capital-spending cycle. I considered the valuation reasonable relative to the growth and the quality of the franchise when I built the position.

The business is two reinforcing engines: a commerce marketplace and a payments and credit operation built on top of it. Payments started as a way to make the marketplace work and became a large business in its own right.

The credit book is the part that deserves the most attention. Lending into Latin American consumer and small-business segments produces attractive yields precisely because the credit risk is real, and provisioning moves with local conditions. Currency is the second factor. Results are earned locally and reported in dollars, so devaluation can obscure genuine operating progress.

Neither undermines the compounding argument, but both mean reported figures need reading in constant-currency terms to see the business underneath.