Pegasus Airlines: 4x In The Next 5 Years?
This is one of the cheapest and highest quality businesses I have ever seen.
Why is capitalism stronger in the US than Britain?
Most of these countries' qualities are the same. The language they speak is the same, they share the same system of law and even people who were sent to North America in the first place were British.
Yet, capitalism in the US is stronger than Britain although the Industrial Revolution happened in Britain and early great theorists like Adam Smith were British.
Why? Because of the contingent path of history.
The prime evil of capitalism is the state. Where the state provides goods and services, there will be inefficiency. Thus, a strong capitalism requires less state intervention and more private enterprises. In this context, where people minimize the state, private enterprises should become stronger, so should capitalism.
This is exactly what happened in the US because the contingent development of history set people of America to develop hatred and skepticism against the state and everything it does.
In Britain, such a hatred against the state didn’t develop because after the Glorious Revolution, it was the Parliament that mostly controlled the state and members of the Parliament were citizens after all.
It was different in America… There, the state wasn’t colonists, it was the Virginia Company and the British Government that chartered it and sent colonists to the new world just for one purpose: To exploit their labor.
And they did everything to do this. They taxed tea, sugar, stamps…
This led to the American Revolution. They toppled the British control but the skepticism against state was deeply entrenched in people and they reflected it on the new state that they founded. This is why the US Constitution is filled with guarantees to protect citizens from state power.
This inevitably led to the contempt of state intervention and praise of private enterprises and entrepreneurship. So, the US system emerged as the exemplar of capitalism.
This is why most industries in the US are overly competitive. There are a handful of companies that dominate their markets like Google, Microsoft, Apple, Amazon and Nvidia but this is largely due to the conduciveness of the market characteristics. Most other markets in the US are extremely competitive because capitalism works well. Though this is good for consumers, it’s not for investors because shareholder return in competitive markets is generally low and unstable as the winners change very often.
This is not the case for many other countries.
Capitalism in many other countries doesn't work as well because they didn’t follow the same contingent path of history. Where capitalism doesn’t work, there are many more market inefficiencies that investors can exploit.
This is why I love Pegasus Airlines!
It’s an anomaly, it’s a product of an inefficient capital market that could be easily exploited by investors.
It’s an anomaly because it holds a duopolistic position in domestic and outgoing international flights from Turkey. It should have been impossible to achieve this because we know that the airline industry is extremely competitive and price centric.
I normally strongly advise against investing in an airline and I have never done so. But imagine how profitable it could be if the market wasn’t that competitive? Imagine just two companies controlled nearly all the domestic flights in the US, how profitable would they be?
This is the case with Pegasus. It’s one of the investable airlines in the world which is a very very rare occurrence.
It’s because the traditional norms of the airline market don’t apply in Turkey and this is not going to change anytime soon, creating a HUGE market inefficiency to exploit.
And we are going to do so!
So, let me cut the BS and dive deep into why I think Pegasus is a hidden gem in a hated market that everybody seems to ignore.
Remember, where nobody looks at, there will likely be great opportunities. Pegasus is one of them.
What are you going to read:
1. Understanding The Business
2. Moat Analysis
3. Investment Thesis
4. Fundamental Analysis
5. Valuation
6. Conclusion
🔑🔑 Key Takeaways
🎯 Pegasus Airlines holds a duopoly position in the Turkish civil aviation market with Turkish Airlines. It has a giant that stems from the market structure and lack of strong capital markets.
🎯 It’s set to triple its fleet in the next 10 years and expand operations both globally and domestically.
🎯 Its financial position is rock solid. It has four times more equity than debt and its EBITDA is enough to pay the debt in a year.
🎯 It generates higher returns on invested capital than the average of American companies. Its returns are vastly superior to industry peers.
🎯 Valuation is ridiculously cheap given that investors are mistaken the possible currency exchange rate effects on its business. It’s positioned to benefit from a possible weakening in Turkish currency, not harmed by it.
🏭Understanding the Business
This guy is Clayton Christensen.
He was a Professor of Management in Harvard Business School. He died in 2020 at age 67.
Though he is famous for his theory of disruptive innovation, I think his most important contribution was changing the way we think about why people buy some products and services.
It’s a theory that explains why Pegasus is a thriving business in an industry where survival is alone considered a success.
The whole idea started with a very odd observation about milkshakes.
In the 1990s, a burger store owner approached Christensen to find out ways he could increase milkshake sales in his store.
That was a very odd task because nobody else had ever thought before why people actually buy milkshakes. Everybody just assumed that most of the milkshake customers were children and teenagers who just loved the taste and texture of the drink.
That would prove gravely wrong.
Christensen and his team observed the milkshake buyers in the store for weeks, interviewing everyone they could approach.
Result? Most frequent milkshake drinkers were people who had a long morning drive to their work.
Those people preferred milkshakes for a mix of reasons: They didn’t want to drink coffee because it was too hot, they didn’t want coke because it was too small for a long drive and water was simply too boring.
Milkshake was a perfect companion: It could stay cold for a long time, you could get it king-size which would last through a 30 minute drive, it allowed people to skip breakfast thanks to high concentration of sugar and so on…
That was a moment of enlightenment for Christensen. He understood that people don’t buy products to consume, they hire products to get a job done.
Milkshake, for example, was hired for many different reasons:
Morning drivers and commuters were hiring it as a companion.
Dads were hiring it as a relatively innocent dessert for their children.
White collar workers prefer it because it’s portable, they can walk back to the office and keep drinking slowly while working.
What did they do when they noticed this?
They grew the size of the milkshakes sold in the mornings because most of the buyers were hiring them as companions and they shrunk the size in the afternoon because most buyers were dads who wanted their kids to get as little sugar as possible.
Sales skyrocketed. The store sold three times more milkshakes that month than the month before that.
That was an incredibly strong insight and this was exactly why Southwest Airlines succeeded in the 1970s despite having strong incumbents in the market like United, Delta and American Airlines.
Rollin King was a pilot and he owned a small commuter air service in San Antonio. In 1966, he pitched the idea of running a quick commuter service between San Antonio, Dallas, and Houston to his lawyer Herb Kelleher.
As an aviation insider and a Harvard Business School graduate, King saw what others ignored: People were hiring airlines to travel long distances and hiring cars for distances under 500 miles.
He intuitively discovered “job-to-be-done” three decades before Christensen.
He asked a question similar to what Christensen asked to milkshake buyers: “Why were people preferring cars for distances that would still take 5-6 hours of drive?”
It was simple:
Most of the airlines in the US were operating through so-called “hub-spoke” model. They had one hub and they were flying people from other destinations to their hubs and then distributing them again to the spokes.
That made sense for long distance flights and international connections but for domestic passengers it was like a hell on earth. A person who needed to go just 400 miles was suddenly finding himself in an 8 hours flight journey when you added the wait times in airports. This was why people were hiring cars instead of planes.
Just as Christensen’s client made the milkshakes more appealing in the mornings by growing the size, King started to think about how to make air travel more appealing for people hiring cars.
He didn’t want to compete with other airlines, he wanted to compete with cars. They reasoned that main advantages of traveling by car were:
Direct arrival to destination without any additional stop.
For short trips, cars were cheaper to run than plane tickets.
Cars were flexible as you could start the journey anytime of the day.
They had to come up with a plan to offset these advantages, so customers would consider hiring planes instead of cars. One night in a cocktail bar, Kelleher and King came up with four primary strategies to remove the bottlenecks in short distance air travel:
Focus on flights under 500 miles.
Discard the hub-spoke model and fly point-to-point.
Use secondary airports to cut costs and avoid passenger traffic.
Run multiple flights a day between city pairs to provide flexibility.
They charted their first route on the back of a napkin that same night and called it “Texas Triangle.”
They founded Southwest Airlines in 1967 with this strategy.
Result? Southwest became the most loved and fastest growing airline in the US and it constantly took market share from much larger incumbents. That trend remained strong until the founders took their hands off the business.
Southwest successfully spotted and addressed inefficiency in the US airline market, as a result of which the market itself has become even more saturated and efficient. Thus, it’s exponentially harder now to spot a similar inefficiency in the airline market and capitalize on it. This is why Southwest remained largely as a case study in business schools rather than a replicable model, at least for the US.
In 1995, 28 years after Kelleher and King met on a bar to chart the first route of the Southwest Airlines, a Turkish entrepreneur named Ali Sabanci came across the Southwest case study in Columbia Business School’s Masters program. A light bulb went off in his head. It was an “aha”moment. Yes, the Southwest model wasn’t applicable anymore in the US because of the saturation but it was very applicable in his home country.
Turkey was indeed a perfect fit to replicate Southwest’s strategy:
Private aviation was largely non-existent and all the private operators were at the edge of bankruptcy.
Air travel was dominated by Turkish Airlines which was a state owned private entity and it was focusing more on high-class international travel.
Over 90% of domestic mobility was through cars and bus operators.
The longest distance between two cities was under 700 miles.
He went back to Turkey after graduation and pursued several entrepreneurial projects though he kept the Southwest case study always in his mind.
It was in 2005 he spotted the golden opportunity: Charter airline company called “Pegasus” was on sale and it was operating primarily in Turkey.
He acquired the company to follow Southwest's playbook and dominate the internal market. Following the acquisition, he instantly transformed the company from a charter airline to a low-cost carrier (LCC) and placed an order for 12 new Boeing 737-800s.
At the time, 50% of all Turkish population was living in the 15 biggest cities with 16% living in Istanbul. He saw the opportunity:
Concentration of population in large cities made implementing point-to-point strategy way easier.
Short distance between cities let keeping the costs low and scheduling multiple flights a day.
And he did just that. Implemented point-to-point strategy with multiple flights a day.
And that worked spectacularly…
By 2007, in just two years, Pegasus increased its domestic market share to 15%.
What was more striking than that? Revenues of the largest carrier, Turkish Airlines, didn’t also decline… Meaning, Pegasus wasn’t actually eating Turkish Airlines’ food, it was expanding the pie as planned by competing with and taking market share from land travel.
In 2023, its revenue based market share reached 27%, and it’s still counting…
Yet, at the same time, top-line of the Turkish Airlines also grew spectacularly, meaning Pegasus kept expanding the pie by luring passengers away from land travel by offering low-costs, flexibility and speed.
Here, take a look its domestic flight network as of 2015 and see the strength of its point-to-point network:
That was a top-notch corporate strategy and it’s what you need to understand about this business.
If you didn’t know this, you would just think of it as another airline and evaluate it as such. But no… It primarily competes with cars and bus lines rather than other airlines in a market that is exceptionally well positioned to do this.
As a result, it’s winning and consistently growing its top and bottom lines while the airline industry has historically been associated with inconsistent earnings, weak financial health and frequent bankruptcies.
Kelleher and King wrote the playbook on a napkin in a bar, Pegasus followed it successfully.
You now truly know the business and understand why it’s not just an “airline.”
🏰Moat Analysis
If there was a recipe for investing success, it would have three ingredients:
Company with a durable competitive advantage.
Capable and honest management.
Attractive share price.
This is not new. Buffett gave this recipe in 1995 Berkshire Hathaway Annual Meeting:
In essence, you have to buy monopolies and oligopolies that have a good chance of maintaining that position in the foreseeable future and capable management. And you have to buy them at attractive prices.
So, the question is simple: How to find monopolies or oligopolies?
Most people think a company becomes dominant because of product superiority. Well, there could of course be some monopolies that have gained that position just by having a superior product but generally a better product isn’t sufficient to form a monopoly or oligopoly.
Take Nike for example.
It had the best sneakers and apparels until recently yet it never monopolized the market. It has always had formidable competitors such Adidas, Puma, Reebok, New Balance etc..
It's the same in cars. Most people think Mercedes-Benz makes the best cars but it has never monopolized the market.
On the other hand, there are some markets where a slightly better product monopolized the market to an unprecedented degree.
Facebook was slightly better than its competitors, it ended up monopolizing social networking; Google was superior to Yahoo but it wasn’t 10x better, yet it ended up getting more than 10x market share.
What does this tell you?
It’s more about market dynamics than product.
Facebook’s slim advantage to its competitors made user acquisition a bit more effortless for it so it gained a bit more users than its competitors everyday. Over time, this became a huge advantage because every new user makes the platform exponentially more valuable. When this effect reaches a tipping point, nearly all new users choose the same platform. Thus the market gets monopolized. This is what happened in social networks.
It’s not the same with sneakers.
Value of a pair of Nike sneakers for you doesn’t increase with every pair Nike sells. You may at most feel better to wear something you see your peers wear but that’s it.
It’s more about market dynamics than product.
Airline industry has never been a good place to develop a durable competitive advantage.
It’s so infamous that every investor having followed Buffett/Munger even a bit knows the rule: Never invest in an airline!
The reason is simple: It’s a giant operation and there is always something to optimize that allows you to charge cheaper prices than the competitors.
Today you are the cheapest and you get the most bookings, tomorrow your competitor stops serving chicken sandwiches and it becomes the cheapest. It’s a race to the bottom.
It’s not the choice of the airline companies. It’s again the market dynamics.
People aren’t that picky about the airline they travel with because they know they won’t be doing it everyday so when picking flights they feel like saving a few dozen bucks in exchange for a few hours of a less comfortable seat is a fair deal. They see it as a place where they can choose the cheaper option without a permanent effect on their life.
You can’t do this with your phone. If you like the iPhone, you can’t buy Android because you will be using it everyday and the pain will be constant and vice versa. But the airline you use won’t matter after a few hours, why not save a few dollars?
These market dynamics make the airline industry extremely competitive in the US because there are always some places to cut costs and anybody with enough capital can exploit it because there is no other entry barrier like brand loyalty, people just don’t care.
These same dynamics, on the other hand, make Turkey's airline industry extremely anticompetitive.
Why? You may ask.
It’s because Turkey didn’t follow the same contingent path of history and developed efficient capital markets as the US.
As we have said in the introduction, the skepticism against the government entrenched in the American people led them to develop private enterprises to provide goods and services as much as possible.
That created many capitalists in the US.
As early as the 20th Century, the US had created a few of the wealthiest men the history has ever seen: Cornelius Vanderbilt, Andrew Carnegie, John D. Rockefeller, J. P. Morgan etc…
More capitalists you have, better function the capital markets because these capitalists are always looking for inefficiencies where they can invest and generate return on their excess money.
Turkey on the other hand was built on the land that previously belonged to the Ottoman Empire that was governed by absolutism. In the Ottoman Empire, every property belonged to the monarch and even people were counted as property of the monarch.
Thus, no capitalists existed. Where there are no capitalists, there cannot be a capital market.
After the Ottoman Empire collapsed and the Turkish Republic was founded on part of Ottoman land, the modern Republic deeply felt the absence of capitalists.
The Government financed and established private enterprises but they were extremely inefficient due to the absence of competition.
What did they do? They created their own capitalists.
They supported young, entrepreneurial minded small business owners to create domestic champions.
One of them was Omer Sabanci. The companies he founded later formed the second largest industrial conglomerate of Turkey: Sabanci Holding.
You see the connection? Ali Sabanci wasn’t just a regular entrepreneur, he was the third generation member of the second richest family in Turkey.
At the time, the richest person in Turkey had just over $2 billion net worth while Boeing 737-800s cost $100 million each.
Let aside any individual capitalists, there were just a handful of families who could afford to enter in an airline business and put orders for twelve 737-800s that cost over $1.2 billion.
Ali Sabanci’s family was one of them, and they did it.
After that, nobody in Turkey has tried to replicate it because it doesn’t make sense. Entry in this market doesn’t just mean competing in margins, it also means competing against a family that has vastly more resources than you.
Capital requirement that corresponds to a low entry barrier for the US, corresponds to a very high entry barrier in Turkey because of the lack of capitalists that was a result of the contingent path of the history that Turkey followed.
As a result, there are only four carriers in this market today: Turkish Airlines, SunExpress, AJet and Pegasus:
Here is the catch: AJet is a wholly owned subsidiary of Turkish Airlines while SunExpress is a 50-50 joint venture between Turkish Airlines and Lufthansa.
So, even though there are four brands, there are effectively just two companies controlling all the domestic market: Turkish Airlines and Pegasus.
And this won’t change anytime soon because of the market structure and lack of a strong capital market.
Given that Turkish Airlines is a state owned private entity, Pegasus is the only company who could break the mold in this industry and it could do that because of the unique advantages it had due to the family that owned it.
This market now has unusually high entry barriers not just because of the lack of a strong capital market but also because of saturation. Pegasus saw the possibility to follow Kelleher-King playbook to address the existing inefficiency and it’s no longer there.
In sum, this is another case where the unique interplay of country structure and market dynamics created unusually high entry barriers.
So yes, Pegasus is protected by a wide moat that doesn’t stem from its business, but from the market structure, which is arguably even harder to break.
This is a giant, giant moat.
I see Pegasus and Turkish Airlines Group remaining only carriers in the domestic market for at least a decade to come.
📝Investment Thesis
If you have read so far, some important aspects of the investment thesis should have already crystallized before your eyes, starting with the moat it has.
The whole thesis relies on two critical points:
1) Domestic market will remain as a duopoly.
This follows the market structure I explained above.
Because of the lack of strong capital markets, it’s impossible to enter such a highly regulated market by small investors or entrepreneurs.
It’s not just they don’t have the resources themselves, they also can’t raise enough capital for a viable entry.
Imagine, you are an investor and a highly capable operator comes up to you and asks for investment to enter the aviation market in Turkey.
What would you do? You would look at the industry structure and see that it’s a duopoly between a state owned enterprise and a private carrier owned by the second richest family in Turkey.
Would you risk your capital for this while there are vast opportunities developing in new technologies like AI?
You wouldn’t.
Make no mistake, this is not the same as having just two restaurants in town.
Turkey is the second largest civil aviation market in Europe after Spain.
This is too big of a market to be dominated by two companies, yet this is what we have.
Given that a possible entry is very unlikely because of the said market structure, Pegasus will keep collecting duopoly rents in this market for the foreseeable future.
2) Pegasus is tripling the fleet size in the next 10 years.
Pegasus has a unique opportunity to expand internationally because of Turkey's special position as a civil aviation hub.
If you exclude London, Istanbul is the largest Airport in Europe. If you add the second airport in Istanbul, Sabiha Gokcen, that received 41 million passengers last year, Istanbul is by far the largest aviation hub in the world.
This allows Pegasus to leverage its domestic market power to expand internationally and it’s doing so.
It currently flies to 109 cities internationally.
Yet, given that Istanbul handles more than 120 million passengers a year, its further expansion is supply constrained rather than demand.
To address this, it’s rapidly expanding its fleet that currently consists of 112 planes.
Last December, it signed a deal with Boeing and ordered 200 planes.
Add that 52 A321-neo orders scheduled for delivery in the next four years.
In total, it’s planning to reach 364 planes by 2034 which will make it the 10th largest fleet among all airlines in the world.
This new fleet will allow it not just to add new international and domestic destinations but also enable it to start point-to-point flights between tourism center cities in Europe such as Rome-Barcelona.
These new international point-to-point routes will be massively more profitable as price charged per seat is way higher in international flights.
Overall, we are looking at an airline that can at least triple the revenue by planned organic growth in the next decade or so.
This is something rare.
📊Fundamental Analysis
➡️ Business Performance
Let me be clear with this: It’s a rare incident for an airline to be consistently profitable. It’s even rarer if it’s also consistently growing revenues and profits.
Pegasus is of that rarer kind.
Its business performance is comparable to a steady compounder with a giant moat like American Express. Just look at this:
It increased revenue nearly 70% in the last 5 years while tripling the net income.
What is even better than this is that it lost just over $400 million total in 2020-2021 when civil aviation nearly stopped in the whole world due to COVID.
You are looking at an airline company that compounded net income at 26% annually in the last 5 years despite an unpredictable disaster that directly hit its industry.
Yet, Pegasus achieved this.
It’s a rare gem, nothing less.
➡️ Financial Health
As Buffett says, airlines are notoriously prone to bankruptcy.
The reasons are simple:
They operate with laser thin margins and maintenance and growth investments are expensive. Thus, they struggle building a financial cushion in their balance sheet.
Well, not for Pegasus.
Excluding the financial leases, it has $507 million debt against $2.2 billion equity. What’s even more impressive is that its annual EBITDA of $550 billion can pay all the debt.
Let me be straightforward with this: This is an exceptional financial position that American airline companies can only dream of.
For comparison, American Airlines operates with negative equity and has five times more long-term debt than EBITDA. It’s not that different for United.
Pegasus, on the other hand, can withstand the strongest earthquake.
It takes no further comments.
➡️ Efficiency & Profitability
Gross & EBITDA Margin
If I didn’t know the company and you showed me the margin structure below and told me it was a consumer company, I would believe it.
How wouldn’t I? Just look at this:
It has 21.8% gross margin and 18.4% EBITDA margin.
For comparison, one of the strongest consumer companies in the world, PepsiCo, has just 19% EBITDA margin.
Do you see what we are doing? We suddenly started to compare its profitability to consumer companies because other airlines are no match for it.
The largest airline in the US, American Airlines, has just 10% EBITDA margin.
You are looking at a company that operates in the airline industry but acts like a consumer company.
All because of the market structure that we discussed. Because of the internal inefficiencies of the Turkish aviation market, it’s growing profitably in an industry that is infamous for creating unprofitable business.
This is the importance of understanding the market and the business.
Return on Invested Capital (ROIC)
If I was asked what’s the most crucial metric in determining the shareholder return, I would say return on invested capital.
The reason is simple: Overtime, your return on investment as a shareholder will converge to the business’ return on its own investments.
That only makes sense as the business’ return would have been essentially your return if you owned the company.
And guess what? Pegasus is doing a phenomenal job here too!
Its median ROIC in the last 5 years was 14.5%.
This is two percent higher than an average profitable American company.
If you compare it to industry peers from other countries, you get how exceptional Pegasus really is.
Delta, which is arguably the best airline in the US, has a return on invested capital of just 5%.
This level of strength speaks for itself.
Going forward, we can expect above average returns from Pegasus and returns way above the industry average.
📈Valuation
If valuation was a meal, a good meal would require one indispensable ingredient: Durable competitive advantage.
I have said this many times, I am saying this here again: More predictable the earnings, the closer you are to valuation; less predictable they are, closer you are to speculation.
And durable competitive advantage is what makes earnings predictable.
Pegasus has it as much as possible.
Its moat doesn’t come from the business itself, but comes from the market structure which is way more resistant to change.
Going forward, Pegasus will keep holding a duopoly position in Turkish civil aviation market together with Turkish Airlines and it’ll opportunistically expand internationally leveraging its dominant position at home.
This is a perfect recipe for sustainable growth.
So, all we need to do is to craft a conservatively optimistic story based on the facts we have and run the numbers!
Pegasus has grown revenue 10% annually in the last 5 years, though this is largely deceptive as the airline industry got shut down for nearly two years due to COVID. So, growth could have been much faster.
It’s tripling the fleet in the next ten years so it’ll be rapidly adding new destinations in its network.
Yet, as the Boeing deliveries will start in 2028 and there are just 38 Airbus deliveries scheduled until then, the business will largely remain supply constrained until then.
This means that rapid acceleration of growth will take place after 2028.
So, I’ll assume that the business will keep growing 10% annually until 2028, and then it’ll grow 15% in 2029 and 2030.
This gives us $5 billion revenue for FY 2030.
I’ll remain conservative and assume that its already high net margin of 20% won’t expand further.
This gives us $1 billion net profit for FY 2030.
Give it a conservative multiple of 12, which is the median among the large airlines, you have a $12 billion company.
The whole company is now valued at $3 billion.
We are looking at a company that holds a duopoly position in its domestic market protected by a structural moat, expanding globally and can quadruple the valuation in the next 5 years on conservative metrics.
This should be a dream for every investor.
🏁 Conclusion
The recipe of success in investing has always been clear: Bet on companies with durable competitive advantages and high return on invested capital. And do it at attractive prices.
Traditionally, airline industry characteristics have been extremely inhospitable to development of durable competitive advantages because of the lack of a durable differentiator.
This is why investing in airlines has been seen as a cardinal sin among investors following the Buffett-Munger framework.
And it is.
Pegasus and Turkish Airlines are pure anomalies in this market.
They hold a duopolistic position in a domestic market because of the structure of the market and circumstances of the country. Further, that country is so uniquely positioned in international aviation that they can easily leverage the position they hold domestically to expand internationally.
And they are doing just this.
They have been growing revenue and profits consistently and this isn’t going to change anytime soon. As long as they hold this duopoly in the internal market, they will keep growing consistently and profitably.
What’s even better is that it’s currently valued at just 4 times earnings because investors are worried about a further collapse in Turkish currency.
Yet, this concern is largely misplaced because only 19% of its revenues is in Turkish currency while this goes up to 31% for costs.
This means that it’s positioned to benefit from further decline in Turkish currency, not harmed by it.
Overall, it’s a great choice for those looking for a high-quality contrarian bet.
Am I buying it? I’ll be for the second fund I’ll be starting soon that will focus largely on disregarded value picks as Pegasus.
This is because our main portfolio is outperforming the market by a vast margin and I don’t want to change its structure. But we also have many good ideas like this that we don’t want to waste.
As always, this is not a “I found this it looks good, do whatever you want to do with it” kind of pick. I will, certainly, have skin in the game!
Hi Oguz, thanks for another great read. Where do you find stories like those of Christensen and Southwest Airlines? I often felt you bring up really good stories to support the main thesis.
What's the reason existing airlines won't try to break into the Turkish market given how profitable it is?