Duolingo, Traffic, and the S&P 500

Welcome to Latinometrics. We bring you Latin American insights and trends through concise, thought-provoking data visualizations.

Thank you to the 50 new subscribers who have joined us since last week! Our vaccines chart reached Reddit’s front page last week, with 19.5K upvotes.

Today’s charts:

1. LatAm vs. the S&P 500

2. Which cities have people sitting in traffic the most?

3. Duolingo’s history and growth

Check out this week’s comment of the week at the bottom!

Stonks 📉

LatAm ETFs are Outperforming the S&P 500 This Year

The S&P 500 (SPY for short) is the gold standard for stock investors. SPY, maintained by Standard & Poor’s, is an ETF that tracks 500 of the US’s largest publicly-traded companies. Several books study how simply investing in the SPY often outperforms the so-called experts on Wall Street, especially in the long term (we recommend ‘A Random Walk Down Wall Street’ for investment advice). If you’d invested $1,000 into the S&P 500 10 years ago, your money would now be worth $3,147 — a 215% return. Keep in mind that the SPY outperforms every single one of the ETFs on our chart in the long term as you read along.

This year has so far been hard for most financial markets. In just five months, the S&P 500 has plummeted 16%. Other sectors have fared much worse; Cathie Wood’s ARKK ETF, which tracks ‘high-growth’ technology stocks like Tesla, Roku, and Zoom, is down 56% year-to-date (YTD). That’s quite the fall from grace from 2020 when the pandemic and bull market were rampant — that very same ETF was up ~200%. As the pandemic gains are virtually erased, many of the technology stocks that once soared are now being called ‘meme stocks’ or ‘pandemic stocks.’

MSCI’s LatAm ETFs have been thriving amidst all the crashing. These ETFs track some of the most notable publicly-traded companies in different countries. For example, the Brazil ETF tracks Vale and Itau, while the Chile ETF tracks Banco de Chile and Enel, among many others. All of LatAm’s top 5 economies that MSCI tracks are outperforming the S&P 500 this year. We think this is most likely because the sectors behind these LatAm ETFs, unlike the US economy and the S&P 500, are composed of fewer technology companies, which are suffering right now. These ETFs track more banks and energy companies, which often have a solid financial footing.

The public market is now looking for companies with ‘good fundamentals’ — a phrase you might hear a lot in the coming months. Investment in private startups is another market in which investors are now warier, limiting their bets to profitable business models or companies that are not burning through immense amounts of cash.

*This is not investment advice

Traffic 🚗

Bogota Has the Worst Traffic in LatAm

If you never miss one of our charts, you know that Latin America is very urbanized, even more than Asia and Europe. One of the most common (and frustrating) aspects of urbanization is traffic. Therefore, perhaps it’s not surprising that Latin America has some of the most congested cities worldwide.

As you can see on the chart, Bogotans have to deal with the highest congestion rate in the region, living in the 4th most congested city in the world and losing an average of 126 hours per year. Why so much traffic? These are some of the reasons for Bogotá specifically:

• Poor public transportation (which forces citizens to drive a car)

• More bicycle lanes (leaving less street space for vehicles)

• Infrastructure failures that lead to more accidents (40 accidents per hour in 2019)

• Growth in automobile usage (there are more than 2M vehicles)

As shown, congestion levels went down due to the pandemic as restrictions led to more people working from home and many establishments being closed. Interestingly, traffic levels in 2021 increased little from 2020 when the pandemic was in full swing. Time will tell if the “new normal” will be a more permanent decrease in traffic and congestion compared to pre-pandemic levels.

Business 🦉

Duolingo’s Revenue Grew 19x in Just 4 Years

Luis von Ahn is Guatemala’s most outstanding serial entrepreneur.

When he was eight years old, his mother bought him a Commodore 64 computer, and his fascination with technology began. Von Ahn attended a private English language school in Guatemala City, which he cites as a great privilege.

At age 18, Luis von Ahn earned his Mathematics degree from Duke University and later his Ph.D. in Computer Science from Carnegie Mellon University. In 2000, he co-created the CAPTCHA technology we all know: a security measure that prompts users to decipher distorted text and stops bots. He later launched reCAPTCHA, which makes this protection even more useful, by helping digitize old printed books with users’ inputs.

Still, he was just getting started; In 2011, he co-founded Duolingo. The app has become the world’s most popular language-learning platform, with over 40M active users and yearly revenues of $250M. It took ten years of hard work and growth for Duolingo to finally go public last year. On its first day of trading, the market valued it at $6.5B (today, it’s down as most technology stocks are as well, to $3.1B).

Luis Von Ahn is genuinely a remarkable Guatemalan entrepreneur that has made significant contributions to our world. He has shown that it’s possible to create useful and fun things. We recommend watching his 2011 Ted Talk, where he talks about the early stages of Duolingo and how he thinks when developing new products.

Realize Latin America’s Potential 🚀

Hand-selected job opportunities based on what we know about our audience (e.g., industries, job functions).

This week’s opportunity:

• Duolingo is looking for a LATAM Regional Marketing Manager in Mexico City.

• Requirements: 5+ years of marketing experience, excellent English skills.

Hiring Managers: Reply to this email if you’d like to feature an open role in our newsletter.

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That’s all for this week 👋

Want more?

Comment of the week from LinkedIn, a possible answer to last week’s question of why Costa Rica has so many cell phones (thank you to all that commented and shared your thoughts, we have the best audience!):

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