In this monologue, David Belle critiques Opendoor (OpenDoor) as an investment, arguing that the company’s business model offers no sustainable moat and has generated roughly $5 billion in losses over the past five years. He deconstructs the psychology that keeps retail investors attached to a declining stock, highlighting sunk‑cost bias, cult‑like shareholder loyalty, and the mistaken belief that a former Shopify CEO can replicate that success at Opendoor. Belle contrasts Opendoor’s thin‑margin, speed‑focused model with high‑end real‑estate agents that sell prestige, and he points out that any short‑term price spikes are merely market mechanics, not evidence of long‑term value. He stresses that markets reward earnings growth, not hype, and warns that investors would be better served allocating capital to opportunities with clear profitability trajectories rather than clinging to Opendoor’s speculative upside.
Chapters
I don't want to hate on Opendoor shareholders too much, but really delve into the psychology here of why people absolutely love stocks that continually go down. It's mind-boggling to me because at the end of the day, if the market is signaling to you for 5 years now that a stock really isn't doing that much, then you've probably got to change your tactics at some point, surely. Well, no. According to Opendoor shareholders, this is the greatest thing ever. Now, let's be very, very frank here. What is Opendoor? They are an online estate agent. An online estate agent is not doing anything different. It's not doing anything special. It is not really going to command this level of cult following. I do not understand why Opendoor has such a cult following. And if we take a real life view on this, okay, where Opendoor is going to earn greatest nominal fees is on, I guess, the higher end of the market. Now, near me there's a lot of high-end houses, villas, old houses, and what real estate agents are actually doing with these is they are selling the prestige, the heritage. They're selling something special about these properties. Now, In Open Door's case, what their moat is that you can sell a house very, very quickly. They're effectively acting, I guess, as a market maker of sorts. But really and truly, how much volume are they going to be able to put through that? And I mean, let's face it, they've lost $5 billion over the last 5 years, which is kind of signifying that there's not really that much demand for it. But really what their moat is here is thin air. There is nothing. I don't see why you would want to actually go online to sell your home. There's various different things that go into it, and I think the share price currently is really showing that. And the, the moat that they're trying to protect is kind of the speed of things, but the speed comes at a relatively decent cost for most homes. Sold on Opendoor, they're selling well below market, and it's kind of preying on desperation of the seller. Of course, my problem with the shareholders in Opendoor is that yes, you might get situations like here, for instance, where you do get, you know, a squeeze going on, but that's a good tactical long. It's not a reason to be basing your portfolio or a position in your portfolio Um, over the long term. There is no long-term value to be had here. And sure, you might get another squeeze here. I'm not doubting that for a second because that's just market mechanics. But it's not something where you can say, okay, yeah, they're going to be, you know, reporting an increase in earnings every quarter for the next year or something like that, which tends to be the reason why stocks go up at the end of the day. One of the other things that really bugs me with Opendoor is this conflation that just because the CEO came from Shopify, that he should repeat exactly the same thing at Opendoor. Shopify is a completely different business with a completely different moat in terms of distribution and technology, and there aren't any comparisons to be made at all. And it's bizarre to me this is one of the key selling points for shareholders in Opendoor. It's a very typical retail mindset, what's going on. They see a stock that people are talking about because other people are very much invested in it over the long term, and they think, oh yeah, just because loads of other people are invested in it, it must go up at some point. There's got to be a turnaround. Let's believe in the stock. Let's have that belief. No, what it shows is an abject dereliction of any kind of strategy or logical thinking. At the end of the day, markets go up because earnings increase. Let's face it. Or at least with growth stocks, there is an expectation that there should be some broad-based profitability in 5 years, 10 years perhaps. See Uber, for instance. But with Opendoor, there is nothing. It's a low-growth company. It's a low-growth opportunity. And so it behaves probably more like a very volatile utility. Because of that. And I just do not understand this sunk cost issue that seems to be stuck with retail investors in this particular stock. Because if we were to look at the same time at something like Google, okay, if we look at Google, last 5 years been pretty much up only, okay? You could have been long Google, which is an obvious bet over that time period, and actually made money. But no, Retail investors want to be stuck in something declining just because they feel like, oh, it's got to have this massive upside, but there is no basis for this massive upside. It is a real psychological trap that people get stuck into, and they feel like they cannot exit the trade because they spent so much time in it. Well, your capital doesn't really give a fuck about how much time you spent in a trade when it's losing. Your capital is completely outside of the realms of thinking. You're doing the thinking and you're applying your capital to something that isn't making any more capital. And I just desperately want those invested in Opendoor to understand that they can have 1,000 opportunities elsewhere to make money. But no, they're still stuck in this real mental battle every single day when they open up their portfolio.
