Dialogue. Copart, Adobe, and Uber Business Updates

**SPEAKER_1** (0:05)
Welcome to The Synopsis, a business and investing podcast. Today, I'm joined by none other than Drew Cohen, portfolio manager and aspiring YouTube star who seems to keep getting pigeonholed into making videos about Adobe. Why do the people love Adobe so much? I don't get it.

**Drew Cohen** (0:23)
It is a video that does like three standard deviations better than my average video. So the people are gonna keep getting Adobe videos.

**SPEAKER_1** (0:32)
You know, Drew, the market is all about supply and demand, and let me tell you, you found where the demand is, but can you keep up the supply? How much can you talk about Photoshop and AI? I don't know, Drew, but you're finding a way to keep the topic alive.

**Drew Cohen** (0:45)
You know, I actually did about a hundred page report on Adobe, so I could probably say a lot, but two videos is kind of good enough for me.

**SPEAKER_1** (0:54)
Yeah, you know, in this day and age, nobody wants to read the hundred page report, Drew. They want the 30 minute video on four times speed and see if they retain anything like I do, you know. I probably know about four facts from Adobe after watching an hour of your YouTube videos because you know, three X speed, there's only so much retention there.

**Drew Cohen** (1:10)
And then you'll ask me, hey, what was that video about?

**SPEAKER_1** (1:13)
Yeah, what was that video about? What are we talking about today? But luckily again, I'm kind of I'm getting a little bit of a win today. We do have some AI software topics, but not too heavily. I think they're a little more exciting, but we're going to kind of do a hodgepodge of companies here. We want to touch a little bit on Copart, which we talked about throughout.
That's a company near and dear to my heart. I think that's, if I think of quality company, a lot of competitive advantages, good management, I think of Copart. I think that's a great business for anyone interested in quality investing, however you want to call what we do. I don't know, good decision investing, even though it's down 40%. I don't know.

**Drew Cohen** (1:50)
Good decisions.

**SPEAKER_1** (1:51)
Good decisions. Listen on paper. If you look at earnings in the boats, we're doing well.

**Drew Cohen** (1:56)
The stock price, earnings were growing a lot less.

**SPEAKER_1** (2:00)
Earnings are growing less. But anyway, a good, I think overall a very compelling company to learn about. And then of course, we have Uber that we want to talk about in the AI updates, especially around autonomous vehicles, how that has been kind of transitioning. And then lastly, talk about Netflix, which Drew said was one of his mistakes on our last video, not investing in Netflix in 2021 or 2022 whenever they were down. And guess what? It's at that price again. Is that right, Drew?

**Drew Cohen** (2:26)
Oh, it is definitely not at that price again.
Oh, it's like three or 400% more expensive still. It was trading at that point in time of 16 times multiple. Yeah, it was trading 16 times multiple. Right now, I think it's 23 times when I did the video. Maybe right now, it went up a little bit, so it's 24 times. But yeah, on both absolute dollar basis and valuation multiple, it's still a lot higher.

**SPEAKER_1** (2:50)
God, and that's why I'm watching these videos at 3x speed, because I thought you said somewhere in the video that it's at parity or it's been down a lot.

**Drew Cohen** (2:56)
I don't know.

**SPEAKER_1** (2:56)
I don't follow Netflix like you do.

**Drew Cohen** (2:59)
Insider secret, though, if you watch it at 3x speed, it records the full watch time, so I don't care. Works out for me.

**SPEAKER_1** (3:08)
So why don't we start with Copart? And I know you touched a lot on Copart with Chris Meyer, and then we kind of did a debrief after, so I'm not going to spend a lot of time talking about the motes of Copart. You wrote a report on it. We have a deep dive business breakdown on Copart, and we have a deep dive on Copart through The Synopsis, so a lot of information on Copart for those who want. But we had originally had this discussion about Richie Bros and IAA, in the little context there, IAA is the duopoly, is the other half of Copart, they are duopoly in this market. They were acquired by Richie Bros, which was a construction rental company.
And again, we were not exactly optimistic about that merger, specifically because IAA has been kind of acquired and spun off and acquired throughout its history and has not really ever competed well with Copart. We have now seen Jeffrey Law, who is the CEO of Copart, step down and have Jay Adair, who is the stepson of Willis Johnson, the founder. And Jay Adair really was probably the main operational driver behind Copart's run for the last 20 years. Obviously Willis Johnson was involved, but Jay Adair was, I think, probably the muscle, actually going around and doing a lot.