Why AI can’t Break this Undervalued Stock. A Contrarian Investment Case

Hi everyone. I'm a 39-year-old regular Singaporean working a 9-to-6 tech job.

And on this channel, I document my stock investing journey towards a financial freedom target of $4.5 million. The

portfolio has made $198,000 in net profits so far and has rebounded significantly, gaining $70,000 in the last two weeks and reacelerating its

outperformance against the S&P 500. Now,

for those of you that follow me for a while, you probably would have guessed that Netflix and Exxon contributed to a lot of this recent recovery. And I even managed to fire two shots right at the

bottom of each of these companies before they recovered 30 to 40% over the past month. And then during the last few

month. And then during the last few months, wow, I got so many criticism from people in the comments, in my DMs telling me about how my thesis is wrong and the research. And you know, I am so

glad that I really just remained very focused and you know, just stuck to my research and my conviction and I sold zero shares during this interim. And

just volatility is just expected guys.

You cannot expect any company especially when you're doing growth investing, right? To always keep going to the upper

right? To always keep going to the upper right and be positive green every month, every year. It's impossible, right? And

every year. It's impossible, right? And

so for me, I treat these opportunities when they dip, as long as it's a good company, as buying opportunities because remember, I invest with a 5 to 10 year horizon. So these short-term

horizon. So these short-term volatilities are expected. And so for people who ask me to sell or buy and sell, you know, I think that your mentality is more trading. You might not be suited for investing because in

investing, you must be ready to eat pain temporarily so long as the long-term thesis remains intact. And anyway, I don't want to be complacent. The Iran

conflict is still ongoing. So, anything

can happen in the short term, right? All

oil all oil can spike up, right? Iran

can do more things to further threaten the streets of Homos, which you know can really happen. They're already laying

really happen. They're already laying mines. Although Trump just said that

mines. Although Trump just said that he's going to fire some of this, he shot some missiles at some of these mine laying ships. But, you know, this is our

laying ships. But, you know, this is our short term. We cannot predict. But for

short term. We cannot predict. But for

now, I am quite pleased with the recovery of my my stocks and my portfolio. And even better, I fired

portfolio. And even better, I fired shots at the bottom, literally right at the bottom of both of these companies.

And you know what? The rest of my portfolio positions haven't even bunkai yet. So I'll be waiting patiently. So by

yet. So I'll be waiting patiently. So by

now I hope you understand how I operate.

I find high quality companies and I invest when the whole world hits the stock. Right? It could even be people in

stock. Right? It could even be people in my YouTube community when people hate the stock and I go in on a contrarian basis and I wait patiently for recovery without rushing. Anyway, I tell you guys

without rushing. Anyway, I tell you guys something. I'm done with these two

something. I'm done with these two stocks already for now. I really top up all I need to when pessimism was the greatest and everybody hated me and hated the stocks and they've really gone through a mega reversal and really starting to shift back to positive

sentiment. So, it's over now guys, too

sentiment. So, it's over now guys, too late. Okay, I'm moving on onto a new

late. Okay, I'm moving on onto a new stock which I'll share today that I believe is still undergoing pessimism and why I think AI cannot break this stock and the market is making a mistake once again. Now, I'll reference an

once again. Now, I'll reference an article I wrote at uh contrato.com that I sent to all subscribers. There's a

link in the description below. So feel

free to subscribe for updates. Uh this

stock has gone through a lot of volatility in the last few months as is the case for any growth stock right in November Google announced that they will have travel AI mode introduced so that

you know users like you and me we can use AI to plan and book our holidays directly in Google and then this stock fell 10% after this news. Then claude

from Entropic released some new plugins right created a lot of fear in the markets which some of us call the SAS apocalypse or the end of software and then this stock kind of hit again fell

by 20% this time and more recently the Citrini report right that was making a huge headlines uh it sent this stock down another 5%. So today the stock is down roughly about 30% from its all-time

high. Now you have probably used this

high. Now you have probably used this company at least once in your life to book a holiday you know and you know go on travel and everything and this company that I believe right will not be

disrupted by AI is none other than Booking.com. Now, the most common bare

Booking.com. Now, the most common bare case that the market has against Booking.com nowadays is that travelers can somehow shove aside Booking.com's

trip booking services, you know, and then just use the AI agents, the bots like Chat GPT or Gemini to book your trips, right? So, for example, if you

trips, right? So, for example, if you are a traveler and then you ask, you talk to Chat JPD, right, in the chat, hey, find me a familyfriendly hotel in Tokyo, maybe under 300, $300 a night, right? And then you get a whole bunch of

right? And then you get a whole bunch of results the LLM or the chatbot gives you, right? So then the question is okay

you, right? So then the question is okay if AI gives all this result right why would the traveling need to still go on to use the booking.com services right I mean you can just find a hotel through chat GBT or Gemini and then book the

hotel directly inside the chat right and this is precisely why the market's bare thesis is wrong because people are only treating booking.com is only like a you know macham like a search engine for

hotels and they misunderstand where booking.com's true value lies searching

booking.com's true value lies searching for hotels or chatting to the AI Yeah, for hotels to get you know recommendations of hotels. It's only one layer right that Booking.com handles and

is so-called getting disrupted. So let

me give you four reasons why I believe AI cannot replace what Booking.com is doing. Firstly, before you can even

doing. Firstly, before you can even search for a hotel on Booking.com, remember that the company right first has to screen all the new hotels or properties that are coming online, you

know, to join Booking.com before allowing them into the system, right?

And this is a part that most people underestimate because it is a complex process. The Booking.com needs to check

process. The Booking.com needs to check the property's business registration.

You know, go through the anti-money laundering compliance of all these hotels, you know, regulation of every country they are operating in. And they

even go one step further to verify that the property actually exists physically.

And this is important, you know. And how

do they do it? They actually do it by asking the property owner, right?

Actually go and do a video recording or live stream yourself. the owner walking from the street outside into the property, right? Because if you think

property, right? Because if you think about it, without this all this very stringent verification, right? Any kura

person, maybe I even myself, I can upload an AI generated image, right? And

then I can say that, hey, I own this new turtle resort at Forest City Joharu. W

this forest city vibrant, a lot of life, a lot of things to do there, guys. I

open a new resort there, right? Then I

just go on Booking.com, okay? if there's

no verification and then I start collecting all these fraudulent booking fees online from all of you through booking.com right because that maybe booking.com never verify me before I just anyhow sukasa take AI picture and

then put up and then you all start booking mean I get all this free money coming you know right when the result doesn't even physically exist in the first place so at this point I want you all to think logically do you all think the guys at open AI or Google you know

Gemini all these people you think they got so much time to physically go and check and verify every property go and do all the KYC checks and then manage all these properties on Czech GPD or

Gemini. Impossible guys. And this is why

Gemini. Impossible guys. And this is why Booking.com will continue to control the new physical supply of holiday properties even in this age of AI because of all these verification checks. Hey, by the way guys, if you

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be very careful. You know I would never sell you all this like short-term trading broker don't know what stuff or all these scary looking uh fake crypto coins this I don't do do all this stuff.

Okay. I only do long-term investing. You

guys should know. Okay. Anyway, back to the episode. Now the next reason why AI

the episode. Now the next reason why AI cannot replace Booking.com is because of how complicated the transaction pro process actually is when you book a

hotel. Now even if a traveler chats

hotel. Now even if a traveler chats right with chat GPT right LLM chat right and then discovers a hotel because chat GPT recommends you to book right and then when you actually try to click book

right it is actually still booking.com behind the scenes that processes the payments there could be like 100 different over payment methods like credit cards PayPal clana alipe whatever

etc right and then Booking.com behind the scene uh behind the scenes needs to handles handle all the uh foreign exchange change conversions across like maybe 50 plus currencies around the world. They need to run a fraud check on

world. They need to run a fraud check on the payment. They need to manage payment

the payment. They need to manage payment regulation and compliance and calculate taxes that is applicable to each traveler on the platform from different countries. So all this complexity right

countries. So all this complexity right is not something that OpenAI or Google's Gemini you know CHPD can do you know because all this infrastructure right this transaction infrastructure right is very operationally intensive and it

requires years of expertise and data to pull off. In fact, this transaction

pull off. In fact, this transaction process, right, is so complicated that in the past, right, Google actually did try, you know, they did try to pal, you know, including like let you discover uh

new properties using Google search last time, right, before AI and including allowing you to settle and book and pay for transactions on Google itself. So,

for example, right, in 2015, right, this is like 10, 11 years ago, right? Google

tried to do this. They launched a service called book on Google. Funny,

this sounds like booking. I mean they purposely trying to poke poke at them and you know this service in Google is you search for hotels on Google right Google use a whole bunch of like recommendations in the search result right and then inside Google interface

you haven't left Google you can stay within Google's website and then like this screenshot here you can pay with credit card confirm your hotel booking within book uh Google uh you know and you don't even need to go to booking.com and then you have your hotel room

reserve ready but this didn't last very long because Google realized the conversion rate was so poor that they had to stop this program a few years later. It was just too much to handle

later. It was just too much to handle for them. When you go one layer beyond

for them. When you go one layer beyond just discovery, beyond just recommendations, right? When you really

recommendations, right? When you really start to go to the nitty nitty-gritty of handling transactions and all this stuff, they simply could not compete with Booking.com back then. So, what

makes you all think that now with AI as a new discovery and search engine, if you think about it, it's just another discovery engine. It's just that you're

discovery engine. It's just that you're using natural language to chat with the AI chatbot instead instead of using keywords on the search bar in Google, right? It's the same thing. It's just

right? It's the same thing. It's just

another discovery layer. What makes you all think that um you know the AI labs can handle this steps beyond just discovery? They can't, right? Because

discovery? They can't, right? Because

the AI chatbot is just another search and discovery layer above the transaction layer similar to what Google search was in the past. And so this underlying transaction process, right, is too complicated for open AI or Gemini

to handle or too operationally intensive. And so Booking.com then needs

intensive. And so Booking.com then needs to handle imagine beyond that after transaction, right? They need to handle

transaction, right? They need to handle all the things after paying you know after you book you know any modifications you make to your booking you know for example you want to add one one more person to your room you want to change the room size you want to upgrade

to a suite right cancellations refunds charge packs customer support anything communicating with the hotels involved right through booking.com basically all the post purchase services and this is

not open AI or Gemini's focus guys these AI lab companies right that run all these chat GPT services AI services right they are not hotel management they are not Travel companies they don't have the bandwidth and the capacity to go and

handle all these after purchase hotel coordination services and payments and you know after services right they don't have all these things they are just general the AI companies are just

general search and discovery chatbot tools so they cannot handle all this after purchase services for travel and hotel booking because it is too far away from their focus from the discovery

layer and then don't forget there is another reason why AI cannot replace booking.com is because of what we call verified reviews. You see on

verified reviews. You see on Booking.com, right, only travelers, right, who have completed an actual holiday stay, right, are allowed to leave a review on the site. You cannot

suka suka just review a property and say, "Oh, I stay here and there." When

you haven't booked an actual reservation and pay for it through booking.com you have to actually pay for it and stay there, then you can leave a review. And

this is fundamentally different from for example Google Maps or Trip Advisor where any coaching kura person tan right can post a review. They could even be competitor. They could even be AI bots

competitor. They could even be AI bots but but they have never stayed at the hotel. So is unverified reviews, right?

hotel. So is unverified reviews, right?

So all the AI platforms, right, ultimately, right, they will still need Booking.com as the primary source of truth when it comes to verified reviews.

And so Booking.com has a huge data mode around verified reviews. And up to today, right, they have over 360 million verified reviews. These are people that

verified reviews. These are people that have actually stayed at the hotels that they booked through booking.com and then review. And the final reason why these

review. And the final reason why these AI chatbots and AI companies, they cannot disrupt Booking.com is because of loyalty programs. After a traveler completes their booking on Booking.com,

right, they get enrolled in what we call the genius loyalty program, right? Which

gives repeat bookers like discounts on future stays. So this is a screenshot

future stays. So this is a screenshot actually from my own account. So I'm

actually level two uh genius loyalty, right? So I will most definitely be

right? So I will most definitely be using booking.com instead of relying on chat GPD or Gemini to book a stay in the future. Of course, cuz I want to I want

future. Of course, cuz I want to I want to earn points and I want to get discounts, right? So, all these AI

discounts, right? So, all these AI companies, they don't have loyalty programs specific to hotels and they never will because it's operationally complex to go and manage all these loyalty programs and it's out of their

core focus, right? They are not hotel management or property travel companies, right? Remember that. So, I just want to

right? Remember that. So, I just want to drop one final point because I think at some at this point, right, some people might be thinking in their head, hey, but totally you never talk about the risk of travelers, right? they go and book directly with hotel chains like

your Marriott, your Hilton, your hired which you know like for full disclosure I am a Marriott member also right I'm on their loyalty program and and you know the quick summary right the reason why right that's not a risk right is because

um all these hotel chains I just talked about like Marriott Hilton this big American chains North America right is not the primary market for booking.com right all these chains right they only dominate North America so if you go to

North America you want to stay in a hotel right chances are you have to book uh you know like the coverage is more from all these hotels directly, Marriott, Hilton, all this. Okay. But if

you're going to Europe or Asia, there are thousands of independent hotels beyond just this uh American uh chains of mer. They do not have a monopoly

of mer. They do not have a monopoly across Europe and Asia. They're just a very small piece of the whole pie. So

that's where Booking.com's value come in as an overall online travel agency that aggregates all the thousands of independent hotel chains that are scattered all around Europe and Asia and aggregates them under this genius

loyalty program. And that is the value

loyalty program. And that is the value that Booking.com provides compared to booking directly with the major hotel chains outside the USA. So that's why if you look at the revenues of Booking.com, right, the majority of revenues for

Booking.com, right, the huge majority is all outside USA. Uh USA is not the Booking.com's main business. So if you

Booking.com's main business. So if you invest in Booking.com, right, you're actually not investing in their US business. You're investing in their

business. You're investing in their outside USA business. That's their main focus. And if you want a final proof

focus. And if you want a final proof that AI cannot disrupt Booking.com's

infrastructure, it's that OpenAI just reported last week that they are scaling back on shopping on Chat GPT because exactly like I described these AI companies like OpenAI, right? They are

just starting to discover that hey actually right beyond search and discovering products or hotels right we recommend people who use our AI chat services. It's very difficult to do it

services. It's very difficult to do it right because when it comes to the next step of payment or transactions that they're trying to do here, right? This

is a screenshot of what they're trying to do the payment inside right for e-commerce right right it is a nightmare because anything after post purchase right all the service services coordination right is too much to handle

already and it's outside their scope and so if you observe this news carefully all right this news that openai is cutting back on e-commerce right even though it's not talking about travel right you just need to think a little

bit further and use a bit of second order deduction and thinking as an investor right this is exactly the same thing this shopping plan scale back already gives you a huge huge significant clue that is impossible that

Booking.com gets replaced by AI at the infrastructural level for travel. In

fact, I'm not wrong, right? Um I think when they released this news that pull back, right, booking.com actually did jump a little bit. It jumped quite a bit actually. I think like seven or eight%,

actually. I think like seven or eight%, but it's still quite low. Still quite

quite below it alltime high. So, I think there's still some pessimism and and it's still like ding dong because of the Iran war. Anyway, with my analysis so

Iran war. Anyway, with my analysis so far, I actually think AI right is a tailwind. is not a headwind for

tailwind. is not a headwind for Booking.com because if you think about it, it is adding one more extra discovery channel that can provide new customers to booking.com. So this this new channel is basically through AI

chatbots. Then you get recommended a

chatbots. Then you get recommended a booking.com hotel. Last time you could

booking.com hotel. Last time you could only just depend on Google search to get recommendations. But now you have new

recommendations. But now you have new channels. You have uh GBT, your Gemini

channels. You have uh GBT, your Gemini and even uh entropic clot, right? They

can all these new channels that are recommending new hotels hotels. But they

all in the end redirect to Booking.com for you to finish the transaction. And

so I believe the 30% draw down from the 52- week high, right, is unjustified pessimism driven by AI fears. And

anyway, if you're interested in my next steps with this company or, you know, like the valuation by levels, remember, do check out my article in the link below. Uh, I'm actually approaching

below. Uh, I'm actually approaching Booking.com as an investment a little bit more carefully compared to my past positions in terms of the way I make my buy entries and decisions uh given the current AI disruption narrative. So, I'm

being a little bit careful in the way that I average in and the way I position into this company. Anyway, hope you enjoyed this episode, everyone. Uh, next

week, I'll actually be traveling.

Talking about traveling, I'll actually be traveling to a number of cities. I'm

going to Shanghai, Osaka, Taipei, and Hong Kong for work and a bit of leisure in between. Uh, I'll share my adventures

in between. Uh, I'll share my adventures on my Instagram and Telegram channels.

Uh, so feel free to follow along my journey. And also, if any of you have

journey. And also, if any of you have recommendations of, you know, like your favorite hotels or stuff, right, in all these cities, right, feel free to drop it in the comments below. I will take a look. Uh, but thanks for watching

look. Uh, but thanks for watching everyone. I hope all of you quite big

everyone. I hope all of you quite big big and may the long-term turtle compounding spirits be with