1. How I Discovered MercadoLibre
My entry into MercadoLibre (MELI)—Latin America’s dominant e-commerce and fintech ecosystem—came at a time when the world seemed to be standing still.
It was April 8, 2020, during the early days of the COVID-19 pandemic. Market chaos was rampant. Volatility was the norm. But I believed, like Howard Marks advises, that the best time to buy good companies well is often when others are too afraid to look forward.
At the time, I had been studying platform businesses globally and was already deeply invested in companies like Amazon, Alibaba, and Shopify. MercadoLibre was the Latin American expression of that thesis—a company building an integrated, digital-first infrastructure across commerce, payments, logistics, credit, and advertising. It immediately passed my sniff test.
2. The Spark: A Latin American Amazon + PayPal + Shopify
What drew me in was MercadoLibre’s multi-layered flywheel:
- Mercado Libre Marketplace – The Amazon-like platform for buying and selling everything.
- Mercado Pago – The PayPal-like fintech layer, powering not just their marketplace, but the wider economy.
- Mercado Crédito – A Square-like credit engine for merchants and consumers.
- Mercado Envios – Their vertically integrated logistics backbone.
- Mercado Ads – A Google-like digital ads business growing within the commerce ecosystem.
- Mercado Shops – A Shopify-like platform for merchants to create independent stores.
What I saw wasn’t just a marketplace. It was an entire economic operating system for the region.
3. My Investment Strategy
I took an initial position on April 8, 2020, which turned out (fortuitously) to be near the market bottom during the COVID selloff. From there, I continued to dollar-cost average into MercadoLibre over the following years, ultimately deploying around 5% of my total capital.
The results have been outstanding:
- 200% total return across the position
- A compound annual growth rate (CAGR) of 14.8%
- Significant outperformance relative to benchmarks over the last five years
More importantly, it has added a powerful emerging markets diversification element to my portfolio.
4. Why MELI? Flywheel Execution in an Underserved Region
What sets MercadoLibre apart is that it’s not simply copying U.S. models—it’s localizing and innovating in complex, underserved markets.
Their execution has shown:
- Resilience in volatile currencies and inflation-prone economies
- Strong first-mover advantage in both e-commerce and digital payments
- Operational excellence in logistics, solving last-mile problems unique to LATAM
- Network effects across multiple business lines that reinforce customer retention
They are one of the few companies in the world that owns the commerce stack from ad impression to final delivery—and gets paid at every step.
5. Role in My Portfolio
MercadoLibre sits in my G1 Fund – Core Compounders, where I concentrate capital into long-term holdings that I believe will become foundational to regional economies.
But MELI also represents a geostrategic bet—a long-duration play on the rise of Latin America. Its inclusion helps me diversify outside the U.S. and China, two markets increasingly exposed to regulatory and political volatility.
6. Geopolitical Context: The Century of the South
I take a multi-decade view of global economic development. And when I zoom out, I see South America, particularly Brazil and Mexico, rising in prominence due to:
- Resource leverage (food, energy, minerals)
- Digital leapfrogging in payments and commerce
- Demographic dividends and urban growth
- Cultural and trade ties to the U.S., Europe, and Asia
MELI is a pure-play on this thesis. It’s not just an e-commerce stock—it’s an expression of the digitization of the Latin American consumer economy.
7. What I’m Watching
Key metrics I monitor include:
- Growth of Mercado Pago outside of the core marketplace
- Credit default rates in Mercado Crédito
- Gross margins and operating leverage as logistics scales
- Expansion into new countries and verticals
- Regulatory shifts or FX volatility across major markets
8. What Would Break My Thesis
The risks are real, and I track them closely:
- Political instability or capital controls in key markets
- Hyperinflation that reduces consumer purchasing power
- Competitive pressure from global players (e.g., Amazon, Nubank)
- Missteps in credit underwriting or logistics execution
But to date, MercadoLibre has navigated volatility with agility, innovating faster than it is being disrupted.
Final Reflection
MercadoLibre is one of those rare businesses that simultaneously solves multiple broken systems in underserved regions. They’re not riding on the back of existing infrastructure—they’re building it from scratch, and monetizing it in real time.
If my children ever ask why I placed a long-term bet on Latin America through an e-commerce company, I’ll say: “Because I believed that one day, the world would turn south. And when it did, I wanted to own the digital rails of that transformation.”
