 Good day, fellow investors! Something really interesting happened a few days ago, which might lead to interesting investment opportunities over the next year or two years. And that is that Walmart invested 17 billion to acquire Flipkart, the Indian online retailer. They will acquire 77% of it. And today I want to discuss what happened, what's going on, what's the long-term short-term perspective in comparison to what Wall Street's myopic short-term perspective and to see how they might materialize an extremely good investment opportunity for the patient investor. Let's see. So, Walmart announced that it will pay 16 billion for a 77% stake in Flipkart, where Flipkart had net sales of 4.6 billion in 2017 and grew at 50%. However, the company is not profitable and Walmart expects an earnings hit of $0.3 in fiscal 2019 and an EPS hit of $0.6 in 2020, as Walmart will heavily invest in growth in India. So, on the 4.6 billion in revenue, growing fast, Walmart expects to lose at least 1-2 billion per year respectively, 2019-2020. And that's a significant part of their 10 billion expected net income. And when a company says that it will lose money or it won't make enough of the same profits as it was planned, what happens to the stock price? It drops significantly. And you can see now that Walmart acquired a growth engine for the next 10-20 years. The stock price fell 3.71% in five days and 3% on the day of the announcement. On top of that, Walmart is down 15% from its recent top. Let's see the numbers to see what's going on. Forward 2019 earnings per share were up to $5 per share. Now they will be lowered by $0.30 and next year it will be lowered by another $0.30 or $0.60. So, those who look at price earnings ratio, short-term earnings, next quarters, next year, as Wall Street does, won't like this what's going on. However, Walmart acquired Flipkart. So, they made a $16 billion investment for 77% of the company. And you might say, okay, they overpaid. But let's put things into perspective and compare it with Amazon. So, Flipkart has now $4 billion in sales in India, which is one of the fastest growing countries in the world. Plus, Walmart's online business in the States has been growing at 40% in the last year. There was a slowdown in the last quarter because of some inventory issues. But still, there is huge growth and when you combine Walmart and their offline brick-and-mortar infrastructure with online, it could be a really good success over the very long term, similarly in India. Now, what am I seeing here is that, okay, Amazon is now a very big company. However, let's look at some numbers. So, Amazon's sales growth has been around 25% over the last years with the growth spiking to about 30% in the last quarters. Amazon's revenue is $193 billion with profits of $4 billion and $778 billion market capitalization. Walmart's revenue is $500 billion, net income of $10 billion, but the market cap is three times smaller than Amazon. Now, let's compare Flipkart and Walmart's online business revenues and their growth. Their online sales might be closer to $20 billion in 2019, which is exactly what Amazon had in revenues in 2008. Fast forward 10 years and Amazon has increased its revenue 10 times. So, if Walmart manages to continue to grow at its past online rates and makes the same thing that Amazon did in the last 10 years, then the $17 billion acquisition of Flipkart will be a bargain in a historical perspective. Something like when Facebook acquired Instagram for just $1 billion. So, you see how that works. If you look at the short-term, okay, but if you look at the potential of what Walmart is doing by acquiring these online retailers and building a long-term future because they have to go into online, okay, they are paying a lot of money for it, but when you look at the potential, when you look at, okay, Flipkart can be 10 times bigger or even more in 10 years. And when you look at, okay, how would that then look in perspective to Walmart, it just Flipkart in 10 years might be worth the same amount as Walmart's current market capitalization. So, if I would be a big company, I would constantly invest the $17 billion Walmart invested. The free cash flow that Walmart has is around $18 billion per year. So, I could invest $18 billion per every year in such growth stories over 10 years. And let's say five are Flops, let's say three are okay, but let's say two explode like Amazon, especially when you can leverage Walmart's brand and infrastructure on it. So, two could explode. So, you have Walmart and in 10 years I would have another two companies and eight losses, two companies that would have the same market cap at Walmart. Therefore, I see this acquisition as a bargain, especially when you see it from a long, long term perspective. At the moment Flipkart has 54 million customers in India where the smartphone penetration rate is still at just 30% and expected to grow at 55% in 2020. I know it's a difficult market, I know the logistics are expensive, but you have to be positioned to take advantage of what will happen in the future. And who knows what will happen in the future. Now, there is a but. The but is that Wall Street likes linearity, linear growth and they don't like these shocks. Okay, now you're going to spend in growth. So, I'm going to see my money even later. And that's why you will see depressed stock price for Walmart. You have already seen the hit on the announcement. And now we have negative, let's say earnings that will probably miss expectations. If they invest a little bit more, something bad happens. Then you have again strong pressure on the stock price. And then in 2020, there will be again a bigger 0.6 EPS hit that's 15% of earnings on Walmart. So, those valuations might or stay the same, thus the stock price might go lower, lower and lower. And it is exactly at that point in time when Wall Street is depressed, when Wall Street sees only clouds, temporary clouds that you can take advantage of the long-term picture, which Flipkart and other Walmart investments offer. I follow Walmart for a while. I like the company, the brand, the difficulties it has with online penetration, but I like the infrastructure, which is always key. And I like the profitability, but I always like it at a much, much lower price. And perhaps we will see it come to me at a much, much lower price for a long-term investment. So, I'll continue to keep an eye on Walmart. I just wanted to share this story with you, a different perspective, short-term versus long-term, and how we, do-it-yourself investors, can take advantage of such issues. It's not yet the time, but perhaps in the next two years, there will be an opportunity in Walmart. Thank you for watching. Looking forward to your comments, as always. And I'll see you tomorrow in the next video, when I will discuss Gramps Chapter 7. See ya!