Cliff Sosin - Investing in Carvana - [Invest Like the Best, EP.421]
Episode publishedPodcast: Invest Like the Best with Patr...Invest Like the Best with Patrick O'Shaughnessy
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Something I speak about frequently on Invest Like the Best is the idea of life's work. A more fun way to think about it is that I'm looking for maniacs on a mission. This is the basis for our investment firm, Positive Sum, and it's the reason why I'm so enthusiastic about our presenting sponsor, Ramp. Not only are the founders, Kareem and Eric, life's work level founders, certainly maniacs on a mission, they have created a product that is effectively an unlock for founders and finance team to do more of their life's work by streamlining financial operations, saving everyone their most precious
Patrick O'Shaughnessy is the CEO of Positive Sum. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of Positive Sum. This podcast is for informational purposes only and should not be relied upon as a basis for investment sum may maintain positions in the securities discussed in this podcast. To learn more, visit psum.vc. My
guest today is Cliff Sosin. Cliff is the founder of CAS Investment Partners, a fund he started with $5,000,000 in 02/2012 that's now $1,700,000,000. This conversation is different from our typical episodes. We start by talking about Cliff's investment philosophy, but the bulk of this long discussion is a case study into his remarkable investment in Carvana. Cliff is one of the biggest investors in the business, which had a market cap of over $60,000,000,000 in 02/2021, then fell 99%, survived, and now has a market cap approaching $50,000,000,000 again. While I hosted Carvana CEO, Ernie Garcia,
you'd gone all the way back to when I was in high school, I I thought I would have been an inventor. I sort of modeled myself as, you know, an Edison in my mind or something. But when I went to school and I studied engineering, you know, a lot of inventing is kind of obsessively debugging, like, real things, and nature is pretty unforgiving. And so what I learned about myself was that I didn't love that process. It just wasn't as fun for me. And so I was sort of casting up for what I wanted to do, and I ended up doing an internship at a big private equity firm. And and I just thought it was re
what, what did you tell your original investors? Cause some people gave you money and including some, you know, well known institutions. What did you tell them and why were their decision making processes different? And how much did you start with?
So I launched with $5,200,000. The
old fashioned way. Uh-huh.
It was 2,000,000 from me because I'd been successful at UBS and they they'd paid me. I like to joke. It was a lot for post crisis, not a lot pre crisis. And, I also got 2,000,000 from my mom. She was a sympathetic audience. I had 1,000,000 from a friend and it was, you know, at the end you always ask people who they're most, grateful to. He's I had two in mind and he's one of them. I'd known him for years and we talked and he's a very successful person. And, I had this meeting. It was like my third mark, second marketing meeting ever. And I sit down and he basically was like, I'm absolutely go
And where does that bring us today? So how many investors do you have? What's kind of the capital base? Like, how do you think about the firm today?
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