Reasons not to own $KARO

I've been wrong about Chinese tech, Turkish equities, and various other bets where my conviction exceeded my competence. So let me tell you about a South African fleet telematics company headquartered in Singapore that started as a stolen car recovery business. Pinch your left earlobe and say: this is NOT stock advice. **Why you probably shouldn't buy this** The currency exposure alone should scare you off. Most revenue is in South African Rand and the Rand does Rand things. If you've ever watched the ZAR/USD chart you know it moves like someone's having a panic attack. It's a $1.4B market cap which means institutions can't really buy it even if they wanted to. Liquidity is thin. Four to nine analysts cover it depending on the quarter. The stock dropped 16% in October because they traded margin for growth in Southeast Asia and Wall Street threw a tantrum. South Africa has political risk. Southeast Asia has regulatory complexity. Europe has GDPR. Twenty countries means twenty ways things can go wrong. Still reading? Okay. **The actual business** In 2001 Johannesburg, car theft was so bad that insurance companies were basically running recovery services as a side hustle. A guy named Zak Calisto started Cartrack to find stolen vehicles with GPS. Niche problem, right? It was not. Once you've put trackers in a million vehicles you're sitting on a data goldmine. Where are trucks going? How long are they idling? Is this driver taking the scenic route to the warehouse? (He is. He's always taking the scenic route.) Cartrack pivoted from "we find your stolen car" to "we optimize your entire fleet." Same hardware, same subscriptions, 10x the value proposition. They rebranded to Karooooo (four O's, because three wasn't distinctive enough), moved the holding company to Singapore, and listed on NASDAQ. **The numbers** ||| |:-|:-| |P/E|\~25| |Revenue growth|21% and accelerating| |Net margin|\~20%| |ROE|31.6%| |Debt/Equity|0.08| |Founder ownership|64.81%| Rule of 40 says SaaS is attractive if growth plus margin hits 40. KARO is flirting with 60. For a company tracking trucks in Johannesburg this is unexpected. **Why I own it anyway** Zak Calisto owns 65% and isn't selling. When the stock cratered in October, the guy who built the thing held. I like owner operators in unsexy industries. Hardware in 2+ million vehicles across 20 countries creates real switching costs. You're not ripping out GPS devices from 500 trucks because a competitor offered 10% off. ARR has accelerated for three straight years which is the opposite of what usually happens as companies mature. And nobody's paying attention. Compare 4 analysts to 23 for Shift4 or 30+ for Nubank. The market doesn't spend time thinking about South African fleet telematics. **The bet** I'm not saying this is cheap. At 25x you're paying a real multiple for a real business. But sometimes the stolen car company becomes the fleet management platform becomes the category leader. Sometimes it doesn't. I continue to be bullish (read stupid) about this one. Will I be wrong? Historically yes. My cost basis in various positions would make you cry. But that's the bet. Positions: Long KARO. Do your own homework. What's your most eclectic holding?