"Price is what you pay. Value is what you get."
That Buffett quote has become a cliché plastered on every financial coach's Instagram profile. But you know why it became a cliché? Because 99% of people repeat it and 1% actually apply it when it's time to hit the buy button.
And that's exactly where we need to have a serious conversation about Nu Holdings.
The Purple Darling Is Damn Good — So What?
Look, I'll be honest: Nubank is probably the best thing that's happened to the Brazilian banking system since the Real Plan killed hyperinflation.
Anyone who lived through the era of showing up at a Banco do Brasil branch at 7 a.m. to stand in line just to fix a wire transfer knows exactly what I'm talking about. Nu came in and did what the big banks had zero interest in doing: treat customers like human beings, with an app that actually works, and without some branch manager trying to shove a capitalization bond down your throat like it was the opportunity of a lifetime.
The customer acquisition is insane. Over 100 million clients across Latin America. A purely scalable fintech operation. The cost to serve a customer is a fraction of what traditional banks spend on physical branches, stale coffee, and armed security at the door.
Is the business beautiful? Hell yes.
But this is where the movie changes genres.
The Price of Perfection
A Seeking Alpha analyst — Christopher Leder, a German business student who works at PwC and builds his own models in Excel (respect, the kid has skin in the game, he's long on the position) — brought up the point everyone wants to ignore: Nu is expensive.
And not "expensive like a little bit above fair value." Expensive like a Price-to-Book (P/B) multiple that would give any Benjamin Graham disciple a full-blown anxiety attack.
You know what happens when you buy an excellent business at an absurd price? You can spend years — YEARS — waiting for the fundamentals to catch up to what you paid. Ask anyone who bought Cisco in 2000. Good company? Damn right it was. Still is. The stock price took over a decade to get back to the top.
That's the difference between a good business and a good investment. They're completely different things.
The Risks the "Buy and Forget" Crowd Ignores
First: competition. Mercado Pago, Inter, C6, PicPay — everybody wants a slice of this pie. And the big banks aren't asleep at the wheel. Itaú with Iti, Bradesco with Next (which they've already killed and resurrected). Competition is going to squeeze margins. It's inevitable.
Second: regulation. This is Brazil, my friend. A country where the Central Bank can change Pix rules from Tuesday to Wednesday, where the SEC equivalent invents new regulations on a whim, and where any government — left or right — can decide that fintechs "need to contribute more" to the system. Regulatory risk in Brazil isn't a hypothesis. It's a guarantee that some surprise is coming. The question is when and how bad the damage will be.
Third: Latin America itself. Expansion into Mexico and Colombia is part of the growth thesis. But operating in emerging markets is like walking through a minefield of currency swings, political instability, and crumbling infrastructure. Anyone who thinks it's a straight line has never seen the reality up close.
So, Don't Buy?
I didn't say that. I said price matters.
Leder — who owns the stock and still has the intellectual honesty to call it "expensive" — follows a GARP philosophy (Growth at a Reasonable Price). And the guy himself is signaling that the current price isn't all that reasonable.
Nubank needs to keep growing like a machine AND defend margins at the same time, in a market that's going to get more competitive by the day. If everything goes right, the investor who bought today will make money. If any gear slips, the multiple compresses and the price drops like a staircase — step by step, no mercy.
It's that old Taleb lesson: the risks you don't see are the ones that kill you. And when everyone agrees something is wonderful, the risk is hiding precisely in the consensus.
Are you buying Nu because you analyzed the numbers, or because everyone on Twitter is saying it's the future?
Think about that before you hit the button.
