Chit Chat Stocks - Is Opendoor Actually a Value Stock? Plus, Another Investor's Take on Portillo's $OPEN $PTLO

Episode Date: October 1, 2025

On this episode of Chit Chat Stocks, Brett and Ryan speak to Stephen, otherwise known as Unemployed Value Degen, on his investments in Opendoor Technologies (Ticker: OPEN) and Portillo's (Ticker: PTLO). We discuss: (00:00) Introduction (02:25) The Appeal of Small Cap Investments (05:12) Opendoor (31:37) Portillo's Value Degen Substack: https://unemployedvaluedegen.substack.com/ ***************************************************** JOIN OUR EMAIL NEWSLETTER AND CHAT COMMUNITY: https://chitchatstocks.substack.com/  ********************************************************************* Chit Chat Stocks is presented by Interactive Brokers. Get professional pricing, global access, and premier technology with the best brokerage for investors today:  https://www.interactivebrokers.com/  Interactive Brokers is a member of SIPC.  ********************************************************************* Fiscal.ai is building the future of financial data. With custom charts, AI-generated research reports, and endless analytical tools, you can get up to speed on any stock around the globe. All for a reasonable price.  Use our LINK and get 15% off any premium plan: ⁠https://fiscal.ai/chitchat  ********************************************************************* Portseido is your best portfolio tracking & reporting solution that helps you track all investments in one place. We personally use the software to track our portfolio returns across brokerage accounts. Try it for free today: https://portseido.com/?fpr=ryan63  ********************************************************************* Disclosure: Chit Chat Stocks hosts and guests are not financial advisors, and nothing they say on this show is formal advice or a recommendation. Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to Chit Chat Stocks. On this show, hosts Ryan Henderson and Brett Schaefer analyze businesses and riff on the world of investing. As a quick reminder, Chit Chat Stocks is a CCM Media Group podcast. Anything discussed on Chit Chat Stocks by Ryan, Brett, or any other podcast guest is not formal advice or recommendation. Now, please enjoy this episode. Welcome to the Chit Chat Stocks Podcast, the podcast to help you find your next great investment. Today, we have a first-time guest. It is Steve from Unemployed Value Degen. We're talking two stocks at a crossroads, Opendoor and Portillo's. Two companies I think listeners of our show will definitely know. Opendoor has obviously been very popular in recent months because of the

new investor base, the management shakeup, and then Portillo's we've talked about. Unfortunately, I've held the stock for the last year as it's gone down about 50%. So that company is at a crossroads as well. But Steve, welcome to the show. As a first time guest, why don't you tell the listeners about the unemployed value degen strategy and the newsletter? Yeah, thank you very much for having me. I'm really grateful for the opportunity. My unemployed value degen, the Substack, you know, every day I'm turning over rocks. I'm just trying to look at new small cap companies that I think might be mispriced. And, you know, if you turn over enough rocks, you find some amazing treasure. And by being a bit of a generalist and seeing, you know, industry to

industry, sometimes you learn things in one industry that helps you in other industries. So it's been fantastic to be a generalist, just keep on turning over rocks. And sometimes the stuff you find is just incredible. You know, what sort of unique things are out there that gets overlooked. And I think there's a, our audience, if you've listened to our weekly episodes and you like the small cap of the week, I highly recommend going and checking out the unemployed value degen substack as well. And I I've heard you allude to it on other shows, but there's just, I guess I'll pose the question to you. Why do you focus specifically on small caps relative to other areas? Yeah. There's so much money floating around in large asset managers

that they kind of fall into two categories. One human being, even a professional, you really can't cover more than 30 things and know the company well. And if you're managing a billion dollars and you can have 25 positions, the small caps are just so illiquid. They're really off of your radar. They're off of your menu. So if you're thinking about where prices are going to be efficient or inefficient, the small caps have the best chance of being mispriced because some of the most skilled investors can't look at them. And at the other end of the spectrum, you have the quantitative funds that might have 2000 positions, but nobody's listening to those earnings calls, Right. You're nobody's. There are so many things that happens to a company. For example, a miner is building out a new mine and they're taking all of their cash flow and sticking it into the ground.

Well, their quantitative metrics look terrible because all their cash flow is CapEx. And then overnight, the new mine turns on and the CapEx turns off and their their revenue doubles and their cash flow goes up by 10 times. and a human being that was listening to that earnings call can know what's happening and the algos can't. So, you know, the large professionals with 25 positions, they can't be in small caps and the quantitative strategies that are in 2000 positions, they'll miss everything important about them. So I'm in small caps for the mispricing and every once in a while, large caps are mispriced. I remember when Facebook was like a hundred bucks a share, I was listening and I was pitched the perfect information for that. Somebody was on a podcast and was saying, look, all this CapEx that everybody thinks is for the metaverse, the vast majority of it is for artificial intelligence.

This is going to drive their advertising revenue. I didn't pull the trigger because I was stuck in my small cap mentality, but sometimes there's mispricing in large caps. I'm still kicking myself because I had every piece of information. I had the right thesis served up to me on a silver platter and i didn't buy it what an idiot hey we uh we're in the same boat there and it isn't you know it's not as if there aren't like you said there are mispricings on occasion in some of the world's most followed companies but there's a a lot more room for mispricings in the small cap universe let's start with open door we'll get to portillo's in a bit i think brett mentioned that both of these companies are sort of at a crossroads. Opendoor has become, I guess,

a well-known ticker, a well-known stock for a lot of people. But maybe let's set the groundwork for starters. What attracted you to this company? And can you explain the basics of the business model and sort of the evolution over the last year of what all has happened? Yeah. I wrote about Opendoor in my sub-stack June of last year. And I had a really kind of salacious title this is why i think this company could have a trillion dollar market cap um and that's you know that's that's a little aggressive because i think when i wrote about it it was you know uh maybe two billion um but there aren't uh there aren't many so there were two companies at the time one was open door one was cardlytics they had this real capacity to be

a 50 bagger based on their position in the market. But they had bad management teams. Management was just not delivering. And a lot of value investing is just figuring out, okay, what kind of problems can you solve? And what kind of problems can't you solve? Which problems are going to go away on their own because of the macro? Which problems could a decent management team solve? Are they going to change the management team to someone who's going to solve these problems? If something's undervalued, if something's cheap, it has problems, and which problems are going to get solved? open doors position in the market you know so much of our lives are getting disrupted by tech and we bought our house in 2019 with really lucky timing on that after my our oldest was six months

we wanted to get out of an apartment and into a house and the process was just archaic you know the process we go to a you know you search for months and you start the process to close on a house. That process takes over a month. You do the final document signing at a title transfer office. It takes all day just with stupid amounts of paperwork. And how home buying is going to get disrupted by somebody. And home buying is a huge market. It's more than $2 trillion annually trading hands. That sounds like a massive number because our GDP is what, 26, 28 trillion. And so people have a hard time believing how big the housing market is. Because homes aren't goods that are finished this year, because they're existing, it doesn't show up on GDP. This is a

$2 trillion market. It is enormous. And whoever disrupts that is going to be a trillion dollar company easily. And another thing about it is they have the possibility. So some markets, One of the companies I like a lot is SoFi, although I just sold my stake in it because the price had run up too much. And maybe it'll keep going, but I'm into undervalued small caps and pricing growth is harder for me. Banks have no capacity to be a network good. There's no benefit that you have from being a part of the same bank as your friends, right? So SoFi is growing aggressively. They're trying to become a top 10 bank.

But the banks are set up, the rules of the banking system are set up to be a cartel, not a monopoly. So no bank has any advantage over any others. But you can take a company like Uber. The people that want a taxi go to the company with the most drivers, hoping there's one nearby, and the drivers go to the company that has the most passengers because they want the largest volume. So that creates a feedback loop, right?

The customers go to Uber for the most taxis. the taxi drivers go to Uber for the most customers, and it becomes a winner-take-most market. And recently, I've been trying to do this really aggressive pricing around airports. So I actually installed Lyft on my phone just because they wanted to charge me $200, something absurd, to go five miles from an airport. I just knew it was a massive ripoff. So if they just don't try to abuse the pricing so much, I would have never installed Lyft on my phone if that was a $40 ride instead of a $200 ride. So the market was theirs to lose. They're a network good. the housing market has the capacity to be a network good.

And this is one of the most encouraging things I've seen out of this new management team is the new CEO, Kaz, was talking about one of their first priorities is also connecting to the buyer and not just the home seller. And what that has the potential to do, if they're successful,

is right now the whole housing market, it's like the banking system. No real estate broker has an advantage over any other because every house is listed on this NMLS database, National Mortgage Lender, whatever that acronym is. if Opendoor comes in there with this disruptive tech platform and the seller goes to them to put it on their system, not on NMLS, and the buyer goes to them to go to their system, not on NMLS, they have a chance to disrupt the whole package, the entire thing. And that means that Opendoor,

they could fail. You know, I'm buying Opendoor stock knowing it could be a zero. This could be a goose egg, but they could also be the network good sitting on top of a $2 trillion annual industry. And that's completely insane. So if you were to do a flip of the coin and say, okay, heads, there is zero tails, it's a trillion dollar company. What should that trade at today? And what, what probability weighting do you put that they're going to succeed at this thing? And my answer is, you know, I think they, after listening to interviews of the new chairman of the board, Keith Raboy from Kozla Ventures, you know, he's a pretty famous venture capital fund and PayPal mafia guy. And their new CEO, who is the former chief operating officer of Shopify and

the vice president of product development. Those guys are going to move quickly. They're going to iterate rapidly. I think the odds they're going to be successful. Okay. Be conservative, put it at 20% chance that they're going to create a network and disrupt the housing market. That's, that's a minimum 100, $200 billion company, maybe a trillion dollar company.

So what would you pay for a 20% chance of a 200 billion or a trillion dollar company? I think is extremely exciting. And for reference, for anyone listening today, I think the market cap, I just checked about $6 billion. dollars so that's kind of the number we're working with now obviously a couple months ago it was a

lot lower we'll talk about the actual business a bit although it's kind of uh well what is the business going to be in the future so we might be speculating on that uh but you talked about in your newsletter on some of the other podcast appearances you've been on that uh listened to before doing this interview talk about the importance of management why is it so important And why is it helpful to find, in relation to that, the quote-unquote secret of an industry and matching that up with a competent management team? Yeah, so as a generalist, you crash the surface of a new industry and you just, you know, like, I do not know anything about this thing. And every once in a while, you listen to some speaker at a conference and they give you the key to unlocking the whole industry. I think the first time that happened to me, it was shipbuilding or not shipbuilding, but the shipping industry, you know, tankers and and cargo containers and dry bulk.

And as a guy at a conference said, look, all you need to know is the order book, right? It takes, you know, the shipyards are booked out a couple of years in advance. It takes a couple of years to build a ship so you can see the order book. You know what all of your competition is going to be for the next three, four or five years. You know what the supply is and the demand. You know, the global economy grows one, two percent a year. So that's all you need to know about the shipping industry is look at the order book and you know what's going to be in short supply and what's not. And that really was most of shipping investing.

There's some other rules. Some are more of a joke. Some are more serious, like don't invest in Greek ship owners. That one always struck me as funny. And there's also geopolitical events. But that really does unlock most of the whole shipping industry. I was listening to a conference for tech and somebody got up and says, all that matters in tech is how fast the CEO is solving problems. That's the only thing that

matters. And the audience was having none of this. The audience was pushing back. What if they're in the wrong product? What if they're in the wrong business? Well, if the CEO is solving problems fast enough, they're going to get out of a bad business. They'll be in the right business. All you really need to do in tech is just invest alongside the right people. And I took that thesis and I wasn't a hundred percent sure that that unlocked the whole tech industry for me. And then Carvana happened. And Carvana was like the butt of a joke on CNBC and Bloomberg. Everybody was just laughing about Carvana. It was one of those scenarios where I knew like the talking heads on CNBC, they have to know a little bit about a hundred companies. None of them had looked

under the hood. None of them had looked in this company deeply. And I was like, hold on. There was a false confidence in all these people just laughing about Carvana. So I dug into the company. And this guy, Ernie Garcia III, listening to him on earnings calls, he's a legitimate genius, easily 160 IQ. The speed at which he was talking about the math behind solving all the problems of his inventory turnover, how he's going to get to profitability. And then on top of that, they had just done an acquisition and they had $2 billion of unencumbered land. So they had at their burn rate, they had easily five years of liquidity and a CEO who was just solving problems so quickly. And also every step they did along the way, I would just see what the actions they

were taking. I said, that is genius. So I put my preconceived ideas aside, listened to this guy that said, all you need in tech is a CEO who's solving problems quickly. And the day that CarMax missed earnings. Carvana sold off along with it on a sympathy crash. And I bought Carvana for $3.92 a share. And then like a total idiot, I sold calls on it at $5 a share. So I think it's probably going to be the largest investing mistake of my entire life to sell calls on Carvana at $5 a share. Yeah, it's 373 for listeners that want to feel the pain that Steve has here right now. I bought 4,000 shares of Carvana at $3.92 a share. And I sold calls on it at $5 like a total idiot. But the underlying idea that investing in tech, all you need is the CEO that's solving

problems quickly. I think I genuinely believe that now after seeing Ernie Garcia, how quickly his brain was firing and how fast he was solving problems and finding out. No, that is really is true. Even if every person on CNBC thinks you're a joke and you're going bankrupt, if you've got $2 billion of liquidity and a CEO that solves problems that quickly, the smarter bet was on Ernie Garcia III. I feel like a similar thing is happening now with Keith Raboy and Kaz Natajian at Opendoor, that the structure of the market, the opportunity there, how fast those two are able to iterate and solve problems. Another thing that makes this opportunity so rare is that venture capital has become so systematized that a lot of the venture capital

in the tech world, when these companies are small, stays private and they IPO when they're a hundred billion dollar company. What makes I think the retail investor, this is sort of a unique experience for the retail investor because you usually don't see serious venture capital in small caps, right? Serious venture capital is all private behind the scenes and you don't really know what they're doing. There's a lot of companies that people would love to own a piece of, and they're not going to get a chance until they exit in the public markets at 10 times their current size. That's why I think it's such a rare and unique opportunity. Before we move on, we want to talk about our friends at Interactive Brokers. Interactive Brokers is our favorite brokerage

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Let's talk about the financials at the moment. They don't look great. To put some numbers on it, negative four and a half billion in cumulative free cashflow since inception. 8% gross margins. It's kind of the nature of the business model that they're going for and pretty capital intensive.

Can this existing business model work, do you think? or is it going to require some sort of monumental pivot? The business model is going to change. And the CEO has been talking about this already and also announced a new product rollout, I think, next week. But whatever the business model is, they have to price a house. And pricing a house is a very difficult job. You have an information asymmetry.

And sorry to get into too much jargon. I was a former finance professor. We call this adverse selection. There was an old paper by a guy named George Akerlof, The Market for Lemons, and this adverse selection, when I was explaining it to my class, I would always talk about, do you want to get into the business of insuring against male pattern baldness? Do you think that's a good business idea? And try and let the class think their way through whether or not this is a good business idea. And I would ask them, you know, is your dad bald? And, you know, a third of the class would say, yeah, my dad's bald.

They're like, well, does the insurance company know that your dad's bald? They're like, no, the insurance company has no idea if your dad is bald, but you know if your dad is bald, which means if I try to come up with an insurance business for male pattern baldness, I would only get customers whose father is bald. And since baldness is hereditary, I would go out of business pretty quickly. I wouldn't be able to price insurance for male pattern baldness. There are so many qualitative aspects of housing, you know, curb appeal, floor plan layout. quote, there are so many aspects of housing, which is going to affect the price of a house and a large data set in the past was not able to really handle that. So Opendoor had, and also Zillow with it, it's inherent in this business where the person selling the house knows more

about it and the person buying the house, you're going to have the lemon market problem. You also have the problem that when Opendoor was cashflow positive, money was at 0%, right? You had, you had free money. And the CEO of Redfin was in an interview a couple months ago and said, this business model does not work at 4% interest rates. And that's, you know, it's an aggressive take, but his company lost $50 million and he gave up on that business. I think AI can solve a lot of this stuff. Now you can feed pictures of houses into a machine learning program, and you can come up with a curb appeal score. Previously, we were talking about using LIDAR drones to map out the floor plan, but now they can do it all with pictures. If you have enough pictures of the

interior. They can, I can fully map out the floor plan and you can figure out, is this an awkward layout or is this an attractive layout? So every advantage that a local real estate agent has in helping to price a house, all those advantages are going to be destroyed by artificial intelligence. So the last time interest rates rose, Zillow lost $900 million and Opendoor lost a billion dollars on their inventory. And you know, that's, that's a huge loss, but it's directly related to the lemon problem that people selling their house to your platform they know more about it than you do and they have all these these problems with it machine learning is going to solve so much of this that i i think that problem is going to get solved that they are going to be able to price houses

correctly they have gone on the record and saying they're only interested in the middle part of the bell curve they're not going to worry about high-end luxury homes because the prices of that is you know that's more art than science which by the way that's one of the reasons i had written about the realtor Douglas Ellman in the past, and that's still one of my favorite picks for the real estate market, especially with Trump as president. They focus on the high end. I know you guys were looking at, I think, a realtor company on your last podcast. Anyway, even if open door disrupts the realtor market, I still think the high end luxury, you need to have some people involved in that. But the rest of the realtor space, I would be terrified about being a realtor, especially

So you had that monopoly ruling as the National Mortgage Realtors Association because they were, you know, they were a cartel and they were enforcing the 6% transaction cost in every home. And now you've got open doors going to come just aggressively like a gorilla into this room and come for the whole market. You know, they're already talking about laying off 50 to 70% of the staff, flipping to net income profitability, you know, writing new codes, iterating quickly. I think you're going to be shocked to see what kind of changes roll out in the company week after week after week. And I think one of the first ones is going to be, so the chairman of the board, Keith Raboy, who was also an initial startup funder in another company called Roam, which is a tech platform that'll help for people. If you live in a state where the mortgage is assumable or portable, you can bring your mortgage from one house to another.

That's about 30% of the country. I bet one of the first things that's going to happen is a stock-based acquisition of Roam, and then Opendoor will be able to assist 30% of houses with unfreezing the market because you can take your mortgage with you or the buyer can come in and assume your old mortgage. That'll be a large game-changing innovation.

This thing is going to change so quickly. I know there were some pretty famous short sellers looking at how Opendoor had done in the past, and I think that it's not going to be the same company in three months or six months. So I think it's very hard to judge it based on what it has done in the past. And I think some of my subscribers were shocked that I was talking about this because I talk about, you know, underpriced things. Two of my biggest holdings are, you know, offshore oil drillers and platinum miners. So I'm into some pretty low tech salt of the earth sort of stuff

in very cyclical commodity based industries. I think a lot of my subscribers are surprised that I'm this enthusiastic about a tech network. But I mean, as far as underpricing goes, if they're successful, it's a trillion dollars. It's hard to get a deeper discount to valuation than where it is right now. So we've seen the stock price go from, I believe, and you can correct me if I'm wrong, in June, it was at 50 cents and it shot up to $10. It's gone on a rollercoaster ride since then. Today, I think we're around eight. As an investor, how do you manage a position, position sizing, trimming, buying, selling, what have you, that has also become a meme stock? Yeah. So I have a model portfolio on my sub stack and I had put Opendoor

at 1%. And then in July, when it went from 50 cents to $1.50, I told all my subscribers to look at this really closely. So I think I brought it up to three or 4% of my portfolio, but because it's gone up so much since then, now OpenDoor is 15% of my personal account, which is, it's a sizable position. But I look at, okay, well, there's going to be huge ups and downs, but this is a battleground of call buyers and put buyers. The price is not being determined by even on the margin of who wants to own the stock and who wants to sell the stock. The price is being determined by people who are buying call options and buying put options. And it is going to whipsaw and zigzag around. It is going to be a wild ride. So I wouldn't have a huge concentrated position in a

company like this while I had, you know, margin or something. I'd get margin calls from the volatility. This is going to be a very, very volatile stock. But I would not be on, I would not want to be on the short side of this because for one thing, tech companies routinely trade at three, four, five times price to sales. And this thing is still only about if it's maybe one and a half times price to sales. It has a really powerful, a really deep bench, really powerful leadership team that would usually give it some sort of a premium. It has the genuine capacity to be a network good. It has a huge total addressable market. So I, and then on top of that, you're going to get the positive benefit of whatever new products get launched, but you also

have the free advertising from being a meme stock. You saw with GameStop, there were people on Reddit posting pictures of the receipts. For example, I'm doing my Christmas shopping for my nieces and nephews. I'm going to do 100% of that at GameStop. So there's the meme stock component where it actually drives revenue. You get all this free advertising. You get this really dedicated customer base. And because housing transactions go to these national databases, there's data services that track OpenDoor's daily volume. And because of the meme stock behavior and the increased notoriety, they're on track to beat revenue guidance this quarter. They're, I think, $28 million above guidance for revenue this quarter on the back of this increased attention.

And this is at a time where the housing market is dead. So on top of that, you add the macro tailwinds. Everybody knows we're heading towards rate cuts. I suspect Jerome Powell is going to pause in October, even though Goldman Sachs and JP Morgan thinks we're going to have a cut in October and December. I think Jerome Powell has one last turd for the punch bowl and he's going to pause in October and then cut in December. That's just my guess. But we're in a rate cutting environment. You have a real estate developer in the White House who has stated that he is going to unfreeze the housing market. You have a new Fed chair in May. May is just around the corner. Uh, you've got rapidly iterating tech bros in charge. Um, I, I would not be on the

short side of this thing. This is just no way. Um, so 15% of my portfolio is, is already a massive waiting, but at cost to me, it was like 3% of my portfolio. And, um, what would I rotate the money into that between now and call it may has, you know, I think there's pretty good odds. It could easily be 20 or 30 bucks by may. And when I look at all the other stocks in my portfolio, what else could triple between now and May? There's a few things, but there's not a lot. So I'm not trimming yet. I haven't, I under extreme pressure from some of my former students who I keep in touch with, I did trim 10% at about $8 and 60 cents. And I, you know, I don't think I'm going to be trimming anymore until we get to the 20 or $30 range. I don't know, I might not

trim anymore for a couple of years because after watching what happened to Carvana and being so scarred from, I think the largest investing mistake that I've ever had, but I will be watching management. So if I see them doing the wrong things, if I see them, you know, rolling out products, they're going to burn through cash and doing the wrong stuff. But I don't think they're going to do that because for one thing, especially if you listen to Keith Raboy, because he was one of the co-founders of his company, he's been thinking about this business model for the last 10 years. And this was kind of his white whale. This is his one that, that got away. And he's there like, you know, call me Ishmael. He's, he's on this crusade

to make this thing work. And I think he's going to do it. This has been eating away at the back of his mind for the last 10 years. And the guy is, is coming in with a plan. They're going to roll out some amazing innovations. And unless I saw some, some really enormous mistakes coming for management i think i would uh i would ride this thing as long as the the positive developments of the company keep on improving and there is i think you you gave a earlier on in your answer you mentioned that there let's pay it a 20 chance this happens i i can already imagine that there's people in the audience or listening to this podcast right now that are thinking oh i i don't think they're going to be able to turn around their hemorrhaging money and and what the business

model is flawed for whatever their beliefs are of the business if you are right it's asymmetric upside and if you're wrong it's not the end of the world it's one stock potentially whereas as you mentioned on the short side i think it kind of goes back to uh brett maybe you know the name of the asset manager that's the australian guy who said it's like shorting some of these stocks has been like shooting fish in a barrel but every once in a while they shoot back it when it comes to some of these cult like followings around stocks it even if they are potentially right on the business they can easily be wrong uh with their investment is that is that a fair characterization yeah i think if they're wrong because of the liquidity that they have access

to from their banking relationships, even if they're wrong, I think it'll take us a couple of years to find out if they're wrong. And so there is a lot of time to take in information as it comes and to update your priors and to figure out if you still want to hold on, especially when we're entering into this rate cutting environment. So, you know, the macro tailwinds of it coming into a rate cutting environment with a new Fed chair, I don't think we're going to know the answer for a couple of years. And you could think, you could look at say yeah maybe it's a maybe it's a five percent chance they'll take this market maybe it's a ten percent chance they'll take this market um okay i'm okay with disagreeing on the probability

um personally after judging kaz and uh keith raboy in long form interviews i think it's much higher i think those two are on fire and they're gonna really surprise people and it's not like people have you know low expectations i mean they're they're seasoned professionals who've done done amazing things with their previous roles. But yeah, I fully acknowledge that there is a chance they could fail and this is a zero. And so right now I have 15% of my portfolio on something that could be a zero, but I also think that it won't be a zero in a month. We won't know for a couple of years. And those couple of years are going to have a lot of new product rollouts, a lot of interest rate cuts. On volume last time, their last peak volume was $15 billion in a year.

So when you have interest rates cut and you have the housing volume pick up, you're going to look at, OK, what's the price to sales on 15 billion dollars a volume? And if you give it a two times price to sales on 15 billion a volume, it's a 30 dollar stock. Three times is a 45 dollar stock. So even if it does become a zero, I still think it's going to go to 30 or 45 bucks before it becomes a zero. but maybe the problem is unsolvable maybe whoever buys a house 30 years from now is going to sit in a dingy title transfer agent's office and sign 27 pages of paperwork it takes a whole day and it's terrible but i think i would bet on tech disruption and i think these guys have a pretty solid chance of being the ones who disrupt it and five years later because you know they went public five years ago machine learning is so much better now they do have better tools at their

disposal and i think they've got a much better chance of solving this problem now let's talk about another stock one that i personally have a love hate relationship with it is portillo's i heard you on uh which people should go listen to value after hours talking about this company i said hey look i think that we should get this guy on the show would be a fascinating conversation to hear this pitch you uh i believe own portillo's but tell the audience yes or no uh what was the initial thesis on this business so um there's as a value investor i'm constantly finding companies with problems there might only be two companies that i've found in all the rocks i've turned over that it was a value it was mispriced it was cheap but it was also a quality company

one of those i think was jackson financial and portillo's that it has that quality aspect this is a company that is going to be incredibly profitable it'll be incredibly profitable even in bad years it'll be massively profitable in good years um and i think they have um i think they have the right niche one thing about food is it's highly competitive but one one good thing about it is that it's it's forever people are going to eat forever i mean these these restaurants can be there for decades. I think the niche they've carved out in this space is really perfect. I think it's just the right spot to be in. Their niche is, if you look at restaurants, the cost of ingredients for fast food hovers around 20, 22%. So if you go to Taco Bell and

you spend 10 bucks at Taco Bell, you've got $2.20 worth of ingredients. If you go to maybe be a casual restaurant like a Chili's or a Carrabba's, you're at like 30%. Well, Portillo's is doing 30% cost of ingredients in fast food. So when you eat it, you can tell, right? You go to Portillo's, you have a hot Italian beef. You're like, wow, this is real beef. You know, if you have the hamburger, you're like, wow, this is a nice third pound hamburger. This is like something you would get at a sit-down restaurant, but it's fast food. This enormous quality that they do for a good price has created an absolute fanatic fan base. So there's an aspect in brands called net promoter score. It's a one question survey. Would you recommend this to somebody? And Portillo's

crushes any fast food chain that you think people are fanatic about. Portillo's beats them on net promoter score, even, even in an out burger in California, it doesn't matter. Portillo's comes in number one net promoter score. The people who love it get absolutely fanatic about it. And in a world where Google and Facebook just soak up all the money of advertising, you know, having, having ways to get your story out there that is not expensive, having that word to mouth, uh, word of mouth advertising, I think is, is critical. I mean, sometimes you get clever advertising campaigns, like, like when Red Bull was just leaving crates of Red Bull with a parachute attached to it and it looked like it looked like they had like para dropped red bull

onto your college campus it was very cheap highly effective advertising but for most of it it's just google and facebook just take all your money and it doesn't do anything so having the highest net promoter score of pretty much any restaurant i think is critical and also because they have such high cost of ingredients what's shocking is they also have the highest profit margins if their stores reach the volumes they're capable of reaching. So in the Chicago area where Portillo's was founded, even though they have the highest cost of ingredients, each location has a higher profit margin than your Chipotle's.

Chipotle's, I think, is running at about a 28% profit margin, and the Chicago area restaurants have an over 30% profit margin. So you ask, how can they spend more on ingredients and have a higher profit margin? They do it with the most absolutely insane amounts of volume. these things are so busy. It was just, it's just shocking. So for 2023, I've got the numbers here for 2023. Um, Chick-fil-A was doing about seven and a half million dollars per location in revenue in a year. McDonald's is doing about $4 million per location in a year. Um, what else in and out

burger doing a little over 5 million in volume per location. I think Chipotle is, is, um, I think Chipotle's roundabout between three and four million volume per location. The Chicago area Portillo's do over $10 million a year in revenue. So this $10 million per year location revenue is netting $3 million in profit per location. I mean, $3 million, that's most fast food restaurants, that's their gross, not their net. So one location can net $3 million a year. I think it's a perfect niche for restaurants, especially where a lot of sit-down restaurants, you have really high costs. And then also the tipping culture has gotten insane. It's like you're a bad person if you don't tip 20%.

And you take a place like Portillo's where you bust your own tray, but you're getting real food that feels like you're at a sit-down restaurant. And they sell beer. They have this enormous menu where they have something for everyone. So they have great milkshakes. They've got great slices of chocolate cake. They have salads. So I think Sweet Greens does about $2 million a year. Portillo's locations do about $600,000 or $700,000 a year in salads. So I mean, Sweet Greens, it's not that much more than that for their salads. So they have this enormous menu, something for everyone. It feels, you know, they also have interior decoration that's a lot like a Chili's. You know, they got the bric-a-brac, they got the tchotchkes on the wall. So it feels like you're going to a sit-down restaurant, but you're paying fast food prices.

And you've got, I think, average ticket per customer at Chick-fil-A is about $15. Depending on the city, I think Chipotle's is $18. If you like double steak, it's like $22 for a burrito. the average ticket size at and this is 2023 numbers average ticket size for portillo's was 11 a person so you're you're making 10 million dollars in revenue three million dollars in profits on 11 bucks a person that people are so satisfied that they become these fanatic aggressive promoters they tell all their friends about it i think it's a it's just a fantastic position. And it's just the same as in value. So that's the quality aspect. The value investing of

it is right now they have problems and what kinds of problems are going to get solved on their own with the macro tailwinds and what kinds of problems are they in the process of solving with management. And there are a lot of problems right now. This episode is presented by our brand new partner, Port Sido. Do you know what your actual investment returns are? Well, if you're like me, then the answer is probably no. And that means you need to try Port Saito. Port Saito is the ultimate portfolio performance tracker. With Port Saito, you can easily aggregate your various brokerage accounts and instantly see your actual investment returns. That includes all your investments too, stocks, ETFs, even crypto, if that's your thing. You no longer have to guess

what your returns are. With Port Saito, you can find out in minutes whether or not you are actually beating the market. And that includes a dividend tracking dashboard and even tracking of short positions. I have been looking for a tool like this for a long time because I was sick and tired of tracking it manually and Port Sido has finally built it. If you want to find out what your real returns are, check out Port Sido. The link will be in our show notes. Let's talk about those, the guidance update that they had last. I think it was on around an investor conference. They reduced their full year guidance. Of course, the entire, as you mentioned, restaurant industry is in a tough spot. Just take us through, again, how you're thinking about the current number

to T-Guration, the activist investor, and as of this recording a couple of days ago, the CEO resigning, but most likely getting the gentle firing from the board of directors. Yeah. And usually when a CEO steps down, they kind of keep it pretty vague. But I think in this case, They were pretty open about it. We're not happy with your performance. I personally believe, and I could be wrong, that the vast majority of Portillo's problems is because their chief marketing officer got poached to be the chief executive officer of Giordano's Pizza. They've been operating for the last year without a chief marketing officer. And I think the CEO, I think he would not have been fired if he rolled up his sleeves and just took over the chief marketing officer's job as opposed to having that job just lapse.

There is a narrative that it's a tough time for restaurants, and it is, but the restaurants that are able to delight their customers are crushing it. So Texas Roadhouse and Chili's are doing fantastic. And also two of the big darlings in restaurants, Kava's and Sweetgreen's, they started their growth trajectory in the Washington, D.C. area. And Washington, D.C. is really struggling with all the government employee job cuts. So I think the narrative that this is a tough time for restaurants is really dominated by Kava's and Sweetgreen's saying like, oh, my God, it's Armageddon out there. And that's really just the Washington DC area. You have private wages growing 5.1% year over year in this country. You've got IRS tax receipts up like 7.6% year over year. I know it is,

you still have, during COVID there was a massive inflation spike, rents went up, wages didn't go up. But I don't think the consumer is as stretched as people are making them out to be. And also we just had a record-breaking back-to-school season. So I also follow the company that owns Sharpie and Expo and Elmer's Glue is called Newell Brands. So I'm keeping an eye on the back-to-school season. Record-breaking back-to-school season. I don't think the consumer is as bad off as people are making them out to be. I really believe most of Portillo's problems are from not having a chief marketing officer. And a narrative has taken root that Portillo's can't be successful outside of Chicago. So the Chicago area restaurants are doing $10 million a year in revenue.

The 2024 cohort of restaurants, which was two in Florida and eight in Texas. So the 2024 cohort of restaurants is on track to do $4 million of revenue each, which is still more than a McDonald's, but the Portillo's buildings are significantly bigger than a McDonald's in anticipation of enormous volumes which aren't coming. Now, one of the reasons why I don't believe it's the case that they can't be successful outside of Chicago, and I don't think it's the case that it's because of the consumer, is in the 2023 cohort of restaurants, they opened their first Texas location in Dallas. And it was in the same shopping plaza as Nebraska Furniture Mart. That location that was open in 2023, when Portillo's had a chief marketing officer to actually take care of the launch of a new restaurant, did $17 million of volume in one year, right? One Portillo's did $17 million of volume in a year. That's the volume of five McDonald's. That's the volume of like two and a half Chick-fil-A's in one. And that's at $11 per person, not at Chick-fil-A's $15 a person.

that's absolutely insane and the customers loved it um now the 2024 cohort they did a hub and spoke and they opened more portillos in that area to siphon business away from the 2023 store that nailed it and they also didn't have a chief marketing officer so that's when you start having these restaurants only doing four million dollars of volume in a year i really think so many of their problems are from not having a chief marketing officer and they just hired a new one and she started on the 22nd of September. And I'm pretty encouraged by her story. So she grew up working in her family's Greek restaurant. She is a Chicago native. She's eaten Portillo. She loves Portillo's. And she was the chief marketing officer of Marco's Pizza. And her three years

as chief marketing officer of Marco's Pizza, the only pizza chain that beat their year over year same restaurant growth was Domino's. But her time as chief marketing officer, they were growing at over 8% same store sales year over year. And they crushed Little Caesars and they crushed Pizza Hut. And her specialty, her area of focus while she was there was two things. One was online ordering and the other was the rewards membership. And another aspect that I'm so encouraged in the near term about Portillo's is they have a new chief marketing officer coming in. this chief marketing officer gets to inherit a rewards program that only started in march of this year and since march of this year portillo's has had 1.9 million people register for their

member rewards program now they only have 86 locations of 1.9 million rewards members for 86 locations that's that's insane chipotle has about 5 000 rewards members per location portillo's now has 22,000 rewards members per location. That is absolutely crazy. So the new chief marketing officer comes in with experience on how to use rewards programs and gets to inherit a rewards program with 1.9 million members on it. So I think they're going to come in and they're going to like relaunch, re-grand open some of the stores that kind of had a failed opening, maybe do a marketing blitz. And I think you're going to see a very different outcome now that there's a chief marketing officer. And I, some of it is going to be macro headwinds versus macro tailwinds,

but I really think the big story is just, you know, and I don't think the CEO would have necessarily had to have been fired if he had just rolled up his sleeves and taken over the marketing role more seriously. There's another company I wrote about recently. It's a little tiny tech company called Transact Technologies. It's kind of an odd one. Their CEO was actually the first CEO of Salesforce under Mark Benioff, old timer in his early 70s. And he was an interim CEO after the other CEO stepped down. And he rolled up his sleeves and went straight to the marketing team. And he personally, you know, re devised their whole marketing strategy, their whole sales funnel, and their commission structure. And it's, I think a CEO, that's one

role you just can't leave vacant for a year. I don't think the CEO would have been fired if he just you know realize that what the company you can't have a vacancy in the chief marketing officer for a year and have your restaurants launch that when you when you're capable of doing 10 million dollar revenue you do four million dollars in revenue and um one last thing about this narrative that they can't be successful outside of chicago they opened four restaurants in arizona about 10 years ago i think there was a lot of chicago transplants that moved to arizona the four Arizona restaurants are doing volumes that are comparable to the Chicago area restaurants. And I think, you know, that could just be, it takes, if you don't have the right kind of

marketing campaign, maybe it takes 10 years for people to learn that you exist and for things to spread slowly by word of mouth. But I think the Dallas opening with $17 million of revenue is you could also just tell people about your product and food is so competitive. It really takes that aggressive marketing. And another thing that's so good about Portillo's is the kind of marketing that works the best is people just have to try the food. I mean, when you're trying a food that has a 30% cost of ingredients versus everybody else having a 20% cost of ingredients, you recognize right away how good it is and you become hooked. So their version of marketing is like they'll go to high school football games and set up a stand and make sure everybody tries the food.

so that's that's what they're going to be doing more of so and we'll find out really quickly if i'm wrong with a new chief marketing officer coming in in september so this upcoming quarter i think will not be a full quarter of her term here but um we'll see what happens two quarterly earnings calls from now and see if the problem really was just not having a chief marketing officer like i think it was and i i think it's going to surprise a lot of people yeah it's such an interesting setup because like you said the brand is so well loved by especially people from chicago but even people it's been well received in dallas obviously there's probably some some sort of a honeymoon period when you launch a new store in a certain city but the the auvs are off

the charts and yet over the last couple years we've just seen kind of negligible comp sales now the valuation seems to have priced that in so maybe we can talk about the financials here what does the valuation look like today why do you think it looks that way and maybe you could talk about sort of the board and activist involvement as well yeah so um now portillo's has been doing a lot of experiments and i'm not against this so i i you know i do think it is right for a company to try and figure out what works so that when they grow aggressively they're doing the right stuff but they also were growing aggressively when they experimented so they opened 10 locations in 2024 and that would have been off of like a 76 location

base that is an enormously aggressive growth trajectory and they were on track to open 12 locations in 2025 but the they just recently paired that back they're going to open eight and they're so they're they only have one so far so we're talking about like in the next four months opening seven more locations they're going to do another eight in the first half probably of 2026 so that's kind of 16 locations in the next 12 months give or take so um but they did they have paired that back they've slowed it down uh pretty considerably um so on these experimentations they're doing so for one thing the floor plan of portillo's is enormous the one that i have here in Tampa, um, it's an enormous floor plan. And so they wanted to bring the cost of opening a

restaurant down. So that, that location costs about 6.8 million to build. And they're on track to get a new build location down to being under 5 million. And that comes from having a smaller footprint, but also a lot of it is just a more efficient design in the kitchen. So there's a lot of just professionalization that has to take place. I'm of two minds about the floor plan, Because if so much of the marketing is people just have to try the food, I think there is an advantage to being the only place in town where if somebody is having a large birthday party or if you've got a bus full of like a traveling sports team and you just need to seat 40 college athletes or 30 college athletes, a place that's big enough to handle that, that ends up becoming, you know, hey, here's 25 new customers that have never tried your food and now they're trying it. So I'm not 100% sure that the smartest thing is to shrink the footprint. And they shrunk the footprint a little bit, and mostly they're getting the efficiencies out of the kitchen space, which I think there is room to do that. There is room for efficiency gains there.

Another experiment they did is four of the Texas locations, they experimented with no beer. Well, it turns out people like beer. So that was not a great experiment. But one of the experiments that was maybe more successful is they brought the salad menu down from eight salads to three. Well, maybe, maybe you only need three salads. Maybe that was a good experiment. One of the problems of having a large menu is if you start making mistakes, if you start giving people a bad meal, you lose customers pretty quick. And so one of the problems in Dallas is you have this $17 million of revenue per location. Well, okay, but you start having people that have

to wait too long. You start making mistakes. People get bad food. So that really was a problem. They really don't want to have a $17 million location. They do need to siphon some business away from that. So there were, and so going from eight sales down to three might end up having fewer mistakes. In Chicago, they were experimenting with breakfasts. So they got now this new experience of saying, can we do $10 million per location?

They weren't even doing breakfasts. They've recently suspended that now because I think, and I'm not against that. So it's hard for me to say just as an armchair general, you know, Monday night quarterback, what's a mistake and what isn't. But they're opening a location in the Dallas airport. And because an airport is, you know, all day, all night there, they needed the breakfast menu to service that restaurant. So their experiments with breakfast in Chicago area, you know, that gives them now the ability to open this this location inside of Dallas airport. So again, it's hard to say, you know, as an armchair quarterback, what's a mistake and what's

not. But what's important is that they're experimenting, they're taking the data and they're trying to do things better. I think the retail investors didn't like this experimenting. And also the financial metrics get really messed up if you try to grow too fast, you have too much CapEx. The operating cash flows of Portillo's is still really healthy, even in this down market, even with comp sales down like 0.7% year over year, operating cash flows are fat. But when you're opening $68 million of new restaurants in 2024 for a company going from 76 locations to 86, that eats through your cash flow pretty darn quick. And they were actually growing so aggressively, they were growing not just out of cash flow, but also with some debt.

And the new activist that came in wants to slow down that growth trajectory so that they are free cashflow positive, like keep growing, but only keep growing in such a way that you're free cashflow positive. That might even open up the ability for some small amount of share buybacks in the future. So if you have something like Marco's Pizza was able to do, if you have, instead of like 12% year over year restaurant count growth, what if you have 8% year over year restaurant count growth and 8% year over year same store sales growth, and you're still growing 16% year over year, which is amazing. And I think right now the price to sales is 0.66. Companies like Chipotle, it's a five or seven times price to sales. I think that once the market believes

that Portillo's is able to be successful outside of Chicago, I think it would go to a price to sales of at least three really fast. And they have a pretty deep bench of talent that knows what they're doing. They just got the chief financial officer of Chipotle to come and sit on their board. I forget his name at the moment, but there is an incredible deep bench of talent that is behind this company and an incredibly enthusiastic customer base. I think all it needs is a narrative shift and a rewriting from price to sales of 0.6 to 3. That would be a 5x. And then on top of that, you'd be growing revenue. Again, 8% sales growth, 8% store count year over year, would be a pretty aggressive growth story.

I think that's, at this price, I'm pretty excited. Because again, value investing, it's all about what kind of problems there are. And are those problems on track to be fixed by the current management team? Are those problems on track to be fixed just by macro tailwinds or headwinds? And I think all of Portillo's problems

are going to get fixed. I'm very optimistic about the new chief marketing officer. I don't think the chief executive officer really made all that many mistakes, but sometimes it's, you saw what happened with the CEO of Toyota. The CEO of Toyota successfully anticipated that electric vehicles were overblown and that the market needed hybrids for the next 20 years. And he positioned Toyota to be a market leader in hybrids. And he ended up being right, but he was still fired. So sometimes you just can't hang on long

enough to be proven right, but Toyota's in a fantastic position. The CEO that just stepped down, you know, he wasn't a nobody. He was a former CEO of PF Chang's. And I don't think everything that he did was a mistake the way that I think a lot of people on Twitter are beating up on him. Um, but sometimes that's just how the dice rolls and somebody else is going to take over. They have a pretty deep bench of talent to choose from. And, uh, I, even the interim CEO who's handling it, he was the former CEO of another restaurant chain that was, I forget the name escapes me, but it wasn't small. They've got a lot of talent. And yeah, I think the real mistake was just not having a chief marketing officer for a year and the CEO didn't step up and take that

more seriously and handle it personally. All right, folks, before we move on, we need to tell you where we get our financial data. Fiscal.ai. Fiscal.ai is the complete stock research platform for fundamental investors. I use the platform pretty much every single day. you'll see the charts on our podcast and you'll see it in our newsletter. This is our one-stop shop for stock research. They've got up to 20 years of financial data on all companies globally, including company-specific segment and KPI data. That means Amazon AWS revenue, SoFi's total members, Google's paid clicks growth, and literally millions of more data points. They've also got earnings call transcripts, ownership data, company-specific research reports, and much

more. If you want complete financial data at your fingertips, then you need to check out Fiscal.ai. And if you use our link, fiscal.ai slash chitchat, you will get 15% off any paid plan. Again, that is fiscal.ai slash chitchat. The link will be in the show notes. Yeah. And I believe the CFO is from Domino's. I had a long extensive period there as in the accounting position. I could be thinking of the wrong company, but I hope the thesis of 0.6 price to sales to three times works as a shareholder. I would be quite happy with that scenario. One note on the valuation, and then I have a follow-up as we wrap up this Portillo's discussion. If you look at their market cap per restaurant location, which I think you mentioned

on your value after hours appearance, I think right now it's $4.7 million. And of course, they have some debt on the balance sheet. They have that tax receivable liability that adds some things in the mix there, but from a market cap to location perspective, you're at $4.7 million when you have these locations that in Chicago can do $3 million in operating cashflow. And then maybe these other locations in a conservative, uh, place can do one and a half million to 2 million. I mean, that seems very, very cheap to me. Uh, when you look at it that way. Yeah, most of the financial metrics, once you look past the capex of the growth trajectory, are amazing still. But obviously, the quantitative strategies don't look past all the capex. I think it's really telling. So these professionals who all want to be a part of Portillo's, whether they're from Domino's, or they're from P.F. Chang's, or they're from Chipotle's, I mean, really, really big chains.

I think what they're looking at is a company that is going to have this amazing growth story over the next 20 years, and they get to be a part of it. And I think that's really behind why Portillo's has such a deep bench of talent for such an 86 location restaurant chain. Um, and I think you have to, you have to look through the eyes of these restaurant professionals that are jumping ship from their multi-billion dollar companies to say, Hey, I could be a part of this thing, growing it out for the next 20 years. And that's going to be an amazing and satisfying career and an adventure. I think that's a pretty strong predictor of the future success of the company is just how many really, really talented and seasoned restaurant professionals are just itching to be a part of this thing.

but yeah the the especially some locations in chicago area they own the land underneath them and those are the ones that can do three million dollars of just net income on their own in a year the company berkshire partners the private equity firm that acquired it from the founder they paid a billion dollars and i think they had a little over 40 locations so at a market cap of $479 million for 86 locations, you're buying it at about a fourth of the price per store than the private equity firm who bought it initially. And again, it's short-term problems, maybe some mistakes, maybe some leadership mistakes. I think this thing is when it finally turns, I think you're looking at a company that you could own happily into one of those,

If you're looking at one of those future, you know, outrageous compounders like people that bought Domino's Pizza in the 1990s or people who bought O'Reilly Auto Parts in the 1990s, I think Portillo's has a chance to reach that sort of outrageous extreme compounding over the next 20 years as they take over the country. And yeah, it's got this just amazing niche of providing everyday value, just great food and make people fanatic about it. As we wrap up, what are three, you know, for takeaways for listeners, what are three or maybe two or whatever, how many you have metrics you're watching for portals as a comp stales, restaurant level operating margin, store count expansion, operating cash flow. What are you going to be watching to see if saying, hey, I'm right or I'm wrong over the next few quarters? The one thing that they could do that would make me cut my positioning close out is if they abandon the everyday value approach. Like if they start jacking up prices, if they want to trade, you know, hey, we could start charging, you know, three dollars more per sandwich and then, you know, revenue will fall by two million, but profits will go up. I think that would look good for a year, but that would be part of the death spiral that you'd lose your fanatic customer base. So the one thing they could do would be to start jacking up prices and to and to to abandon their 30 percent cost of of tickets as being the food cost.

That would be a structural change. Other than that, you know, I don't mind giving management time to work out their problems. And I think they are. There were only a couple of things that the activist investor that came in that were shooting for. There were only a couple of things that struck me as, you know, probably a bad idea. Like they wanted to modernize some of the Chicago locations. Like that's, I don't think that's necessary. People that are there love it. Like that's, that's, you're, you're taking away their, their culture and their heritage. So there's, there's not much that I think that they are at risk of doing that I think

would hurt them. But the, the real disaster would be jacking up prices. And we saw this, like the private equity firm that bought out Subway, they were charging, trying to charge $13 for a sandwich. I, I just saw, so both Subway and McDonald's realize it's not working and they're re-embracing more of a value approach. Uh, so I saw there was, it wasn't a $5 foot long. It was $6 each for two foot longs at subway. So they're, they're recognizing you have to do some kind of value to reach customers, uh, which is going to be, you know, increased competition for Portillo's

in the short term. Cause it was great when McDonald's is overcharging for Portillo's because, uh, you know, they get to be the only everyday value chain, but I just, uh, as long as management doesn't try and make the same mistakes that subway and McDonald's are making and try and overcharge. I'm willing to give management a long time to figure it out because even while they're making mistakes, the fan base is just so fanatic. And if you take places like Arizona, even if they're not marketing aggressively, you give them enough years and those restaurants become, you know, nine, $10 million of revenue because people have to learn the food. There was, um, so looking at customer feedback, when you, when Portillo's enters a new location,

there's a certain amount of teaching them how to eat at the restaurant that has to happen. So their, their signature recipe is this, uh, you know, hot Italian beef sandwich. And if somebody is not holding their hand, the customer can, can order it wrong. So this hot Italian beef sandwich, they can, they can dunk it in the, in the au jus and in the, in the broth. And if you dunk it too long, it's a soggy mess. And if you don't dunk it at all, it's, it's a dry sandwich. And you, so you order it kind of like a medium dunk, or you can get the au jus on the side

and dip it like it's an Italian or a French baguette sandwich. So that there's kind of like right in some of the Chicago addicts will have it like extra dunked. But if it's your first time there, people need to be handheld through their first Portillo's experience a little bit better. So there there have been a rash of negative reviews, I think, because people just don't know how to order from the menu. And a lot of that just comes from, you know, either having somebody handhold them through how to order stuff and or just the restaurant being more established and people learn how to eat it from their friends. So this is just the, you know, I think time is on their side because the food is so good. Just over time, people will learn about it. So the one thing that would make me cut my losses in abandoned Portillo's is they start

jacking up prices. Okay. We appreciate you taking the time to join us today, Steve. Thank you. I think the audience is going to really enjoy this episode. We have maybe more of a value investment play versus an interesting risk reward opportunity with Opendoor, two fascinating companies, as I mentioned at the start at a crossroads. Before we get out of here and before we hit the disclosure, why don't you tell the audience about what you do

at value or sorry, unemployed value DGN, the sub stack there, which we will have in the show notes that people should go check out. Yep. So I've got a sub stack. It's $7 a month. I'm just turning over rocks every day. I don't publish every day, but I'm just always looking for new small cap opportunities just unique interesting companies trying to expand my circle of competence which is hard there's a lot of sectors and industries that are tough nuts to crack um i have a model portfolio uh you know i i do include a little bit of macro so i have a macro opinion i think we're heading towards you know maybe a decade of sustained inflation and then uh it's inflation's been so tame for the last couple years a lot of people think that that's uh barking up the wrong

tree. But I have a model portfolio that includes half of that model portfolio is inflation protection, which is gold, oil, and land, which is what worked in the 1970s. And so a lot of gold bugs and a lot of mining stock enthusiasts like it when I write about those mining stocks. But as long as I can get my circle of competence around it, I'll go into any industry or sector if it's cheap and undervalued. Beautiful. All right. Thank you to the listeners. And as a disclosure, actually, excuse me, say thank you to our sponsors, Port Sido, Interactive Brokers, and Fiscal.ai. Go check those ones out in the show notes as well. As a disclosure, we are not financial advisors. Anything we say on the show is not formal advice

or a recommendation. Ryan, I, or any podcast guests may hold securities discussed in this podcast, may have held them in the past, and may buy, sell, or hold them in the future. Thank you, everyone, for tuning in. This was another episode of the Chit Chat Stocks podcast, and we'll see you all next time.