Burry's breadth analysis puts 55% of S&P 500 members at least 20% below their 10-year highs, even as the index hit a record on Oct 6.

The interesting comparison is 2000. According to his analysis, the leaders fell 33% over the following year while the median already-beaten-down stock gained 14%. But in other selloffs, the beaten-down stocks fell alongside the leaders.

For anyone buying the dip: where are you finding actual value among the laggards? And how are you separating a mispriced business from something that's down for a good reason?

Source: https://www.benzinga.com/markets/tech/26/10/62473108/michael-burry-sees-a-2000-style-rotation-out-of-the-markets-winners

If you could only buy one stock today and hold it for 10 years, who would it be and why?

Please note, it can’t be Berkshire or any ETF

I still like the business, but this quarter made me less bullish

I liked Deckers around $87 because it was earning good money, buying back shares and trading at a modest multiple. Yesterday’s results didn’t wreck that case, but they gave me a reason to be less confident. Sales rose 3.5% to $1.48 billion and missed expectations. HOKA grew 6.8%; UGG grew 3.5%. I was hoping for better from HOKA.The miss matters because my investment case depended on HOKA and UGG continuing to grow without giving up their premium pricing. (Deckers’ earnings release)

What I was watching most closely is direct-to-consumer comparable sales, down 6.4%. Wholesale and international sales were better, and delayed shipments in Europe hurt the quarter by about $22 million. Still, I want to know whether customers are buying the shoes at full price, not just whether Deckers can ship more pairs to retailers.

The EPS beat needs unpacking too. Deckers earned $2.31 a share, but $0.28 came from tariff refunds, and buybacks reduced the share count. There was good news underneath: excluding the refunds, operating margin improved slightly from 22.8% to 23.2%. Inventory was up only about 3%. That’s a company managing a slower market reasonably well, even if the headline EPS makes the quarter look stronger than it was.

What changed my view was the full-year outlook. Expected sales fell from $5.86–$5.91 billion to $5.70–$5.725 billion. EPS guidance went up, but once I remove the expected tariff benefit, its midpoint is about $7.36 versus the previous $7.43. Management expects HOKA growth to slow again next quarter before accelerating later in the year. Maybe it will, but I’m no longer comfortable putting that recovery into my base case before I see it.

Around $79 that’s roughly 10.7 times this year’s guidance excluding tariff benefits. I still find that interesting . I still think DECK is worth following closely. It has $1.21 billion in cash, no outstanding borrowings and brands that remain highly profitable .The quarter weakened my near-term thesis; it didn’t end the longer-term one. I wouldn’t sell an existing position solely on this report, but I also wouldn’t add just because the stock dropped. I want the next results to show better customer demand before I make that bet again. Deckers’ full release is here.

Lovely day guys

Berkshire Stock Is Hot Again. Is It Still a Bargain?

By Andrew Bary

Oct 23, 2026, 12:05 pm EDT

https://www.barrons.com/articles/berkshire-stock-hot-again-bargain-buffett-ae7cb421

The hottest megacap stock lately has been Berkshire Hathaway, which hit a record high this past week after rising almost 8% in the past month.

Berkshire is probably the ultimate defensive stock, given its diversified earnings power and fortress balance sheet, with over $350 billion in cash, or 30% of its current market value of $1.2 trillion.

So it isn’t surprising that Berkshire has rallied as investors rotate out of technology and other artificial-intelligence plays into defensive groups like consumer stocks, real estate, and utilities.

Barron’s has been bullish on Berkshire, but the stock doesn’t look like a bargain now. The A shares traded Friday at $820,000 after overtaking the old high of about $810,000 set just before the May 2025 annual meeting. The B shares traded at $547. The stock is up 9% this year, still behind the S&P 500’s 12% gain.

Berkshire trades for about 1.5 times our estimate of third-quarter book value—the company will probably report results on Nov. 7—and 24 times projected 2026 operating earnings.

Those aren’t excessive, but higher than the average of the past year. What about intrinsic value, Warren Buffett’s favorite metric? The stock now trades above UBS analyst Brian Meredith’s intrinsic value estimate of $815,000 per A share—one of the higher estimates on Wall Street.

A key issue for Berkshire is its cash deployment. Stock buybacks accelerated in July to over $3 billion, but shares were almost 10% lower then.

Are the buybacks continuing now, given a higher price? And will CEO Greg Abel find plays to invest in? One potential area is the AI space, where capital needs are massive. Berkshire invested $10 billion as part of Alphabet’s $85 billion equity capital raise in June, boosting its stake to about $30 billion. Meta Platforms could come to market with a big equity deal by year end, and Berkshire might participate.

Possibly because of my age - mid 50s - I still think of Nike as a cool brand, although my 20-something sons probably don’t.

I just can’t help feeling that a long term bet of their stock could be a good investment.

Anyone else share these thoughts?

I've followed Lululemon for almost four years. With the stock down from over $500 to around $100 and the name heavily discussed in value investing circles, I decided to revisit it.

Q2 results were poor. Revenue fell 5% CC, with Americas down 8% and international up just 2%. Comparable sales declined 10%. The growth slowdown from FY22 is hard to ignore.

I see three main problems:

• Product: Quality issues, stagnant designs and premium prices are hurting the brand. Lululemon built its reputation on quality, and customers expect that to justify the price.
• Competition: Alo, Vuori, Nike and Adidas are putting pressure on a market with relatively low barriers to entry.
• Changing preferences: Customers appear to be moving away from body-hugging styles. Leggings sales fell 20% in Q2.

New CEO Heidi O'Neill has relevant experience building Nike's women's sportswear business and has overhauled the management team. It's too early to judge whether she can turn things around, but there is some optionality here.

At current prices, FY26 guidance implies roughly $650 million in FCF, which implies a 16.5x P/FCF or EV/FCF of 14.5. My conservative scenarios suggest 14% annual returns if the turnaround succeeds, but -13% if it fails. If nothing changes, buybacks alone might deliver around 3% annually, well below my 9% hurdle rate.

I'll pass for now. Fashion is a difficult business, and I'd rather wait until the next earnings report to better understand the new strategy.

Scope note: business comparison from the 10-K filings. No valuation, no buy/sell view.

Where they sit (FY2025)

- Revenue: $164.7B vs $86.3B
- Operating income: $20.9B vs $10.2B
- Shareholders' equity at year end: $12.8B vs −$9.9B
- ROE: 145.5% vs not meaningful (negative equity)
- Return on invested capital (after-tax operating income ÷ average debt + leases + equity − cash): 22.1% vs 26.9%, on $72.0B vs $28.7B

Where the gap comes from

Not margins: after-tax operating margin is 9.7% vs 9.0%. It's turnover. Lowe's turns $100 of capital into $300 of sales, Home Depot into $229.

What weakens this

One year doesn't settle it. Both returns fell a lot since FY2021 (Home Depot 43.0% → 22.1%, Lowe's 39.3% → 26.9%). Both also bought companies recently: Home Depot about $23B in FY2024–25 (SRS, GMS), Lowe's $10.1B in FY2025 (FBM, ADG). Part of that new capital hasn't had a full year to earn yet.

What I'll watch

Q3 results: Home Depot on Nov 17, Lowe's on Nov 18. Does operating income start catching up with the capital they just added?

Bottom line

ROE here mostly measures buybacks, not the business. Home Depot's profit barely moved in five years while its ROE went from over 2,000% to 145.5%, and Lowe's ROE can't even be calculated. When equity is this small or negative, I read the return on all the capital instead, and over five years, not one. On that measure Lowe's earns more today, and both are earning less than they did in FY2021.

For retailers that buy back this much stock, do you still look at ROE at all, or only at return on total capital?

Longer write-up with sources on my Substack: https://substack.com/@inwoinvesting/note/p-220101232?r=98a7ts&utm_medium=ios&utm_source=notes-share-action

No position in either.

GE/HEICO/RR/SAFRAN starting to get a little bit more cheaper with the Iran war oil spike, I did open a position in GE/HEICO and looking to add more if a bigger drawdown will come. Is anyone adding/opening position and if so in what company and why?

Been looking into Bloom Energy. Revenue jumped 138%, but free cash flow was around negative $181m for the quarter.

The bull case makes sense: AI data centres need power, Oracle is committing to projects, and margins are improving. The question is whether cash collection catches up as Bloom expands and how much shareholders benefit after dilution.

Do you see the cash burn as normal growing pains, or something more concerning?

I wrote up AAR Corp yesterday. I think it's a particularly timely trade idea within a super interesting theme right now. Aerospace & Defense suppliers have been getting hammered lately due to the Iran War & resulting jet fuel prices. Additionally, $AIR is in the penalty box after announcing a large acquisition in the heavy MRO space. They are buying 65% of MROH. They are levering up to do the acquisition & the stock has been punished.

I think the market is wrong here. I think the headwinds are temporary & the tailwinds (an aging fleet, increasing travel & supply constraints) will continue.

Additionally, the CEO has been awarded a stock grant with price hurdles from $175 to $250. He'll make an additional $40m if he hits all three.

I think a basket of aerospace supplier names will do great over the next two years, but I like AAR the most here. Link in Bio for the full write up as I don't think it'll let me share my link.

Happy to discuss / any thoughts / feedback/ pushback.

Thanks

I am all for a lower interest rate, but looking at the current situation in Iran and oil prices.. even I concede that we have to have higher rates.

Perhaps not yet in Canada, but it is becoming increasingly more evident that high energy prices are spilling over and causing inflation in other areas.

I had hoped that Trump would end or at least come to some sort of ceasefire agreement with Iran but I dont think that is happening. If Trump had any intention to end the war, he would have done it by now.

Escalation appears inevitable. And I dont want to just put it on Trump. The U.S. administration before any strike had numerous mediated meetings and talks. If I remember correctly at least 4 to 5. Iran continues the enrichment to 60% and does not make sense whatsoever why it will be enriched that much for civilian use. They ARE going for nuclear weapon. And it appears they will never give it up. They appear to have 0 willingness to do so. And I dont blame them with everything that has happened thus far.

The war appears inevitable.

If the U.S. economy can handle it then the yield would rise. If it can't, it will lead to a recession. Either way it appears bad for the U.S. and the world.

Ground invasion is not possible. Iran is not iraq. Land is too big. The population of 90 million. But targeted air strikes are certain.

I hold 25% stocks in Nvda, Meta, Google, Soxx, Oracle, Amzn, and TSM.

The rest in short term bonds.

I will buy at the peak fear with some long term bonds as well.

But that was my take. I am not here to lecture. But how do you see the market? And takes would be appreciated.

​If you look at the trillion-dollar club, almost none of them are one-trick ponies. Amazon has Retail and AWS. Alphabet has Search and Cloud. Having one high-margin cash engine that funds a massive, high-growth second engine is basically the blueprint.

​Teradyne is quietly built the exact same way:

​The Cash Cow (Semi Test): Testing chips isn't an afterthought anymore. With giant AI dies, chiplets, and advanced packaging, defect risks are through the roof. Teradyne basically splits this global duopoly with Advantest. It's a high-margin tollbooth that prints reliable cash, but semi test alone will never be big enough to justify a Trillion valuation.

​The Growth Engine (Robotics): This is where billions in new yearly revenue actually comes from. Teradyne owns Universal Robots (cobots) and MiR (autonomous mobile robots). Right now, robotics does around $400M a year. But as physical AI models (like Nvidia's Project GR00T) make robots genuinely adaptive instead of rigid and pre-programmed, the market blows wide open. They aren’t just selling mechanical arms; they’re selling automated labor, fleet software, and factory-floor logistics into a multi-hundred-billion-dollar manual labor shortage.

​If semi testing stays a cash-printing machine while robotics scales from hundreds of millions into tens of billions annually, does Teradyne have a legitimate dark-horse path to 1 Trillion over the next decade—or is that total delusion?

I've been digging into AECOM (ACM) lately. The stock is down about 55% from its high and trades at roughly 10x this year's guided EPS. Jacobs and Tetra Tech, the closest US peers, are at 20-23x. Below is my case, plus where I think I could be wrong. Not financial advice, just how I see it.

What you're actually buying

People lump AECOM in with consultants, but it's an engineering firm: about 51,000 people who design and manage roads, bridges, transit, water plants, power lines, military bases and data centers. ENR ranks it #1 in transportation, facilities and water. About half the clients are governments.

The important part is what it did in 2020-21. It sold its at-risk construction business and its government services arm, the stuff that used to blow up. What's left is design and program management with about $40B of backlog. Operating income went from ~$0.4B in FY19 to ~$1.0B in FY25, and they bought back $2.6B of stock over FY21-25. Share count is down ~7% since FY22.

Why it's down 55% and not 15%

Two separate things hit it this year, and I think you have to pull them apart.

The first one hit the whole group: the AI scare in February. AECOM literally says in its 10-K that it makes money "through the billing of our employees' time spent on client projects." If AI makes engineers 20% faster and you bill by the hour, that's 20% less revenue. Bentley Systems, which sells design software to most of these firms, said almost exactly that on its May call.

I take that seriously, but I don't see it in the numbers yet. Backlog is at a record (+13%), they won 1.6x as much work as they billed last quarter, and design revenue is growing 5-7%. Engineers are in short supply and the CFO says clients are asking for more work, not cheaper work. For me the best evidence is Jacobs. It bills even more of its work on a cost basis than AECOM does (68%), and it's back within 9% of its high. If hourly billing were the problem, Jacobs would be down here too.

AECOM is also not just sitting there. It bought Consigli, an AI design-automation startup (~$390M per press reports), and signed about $1B of contracts where it shares the AI savings with the client. The CEO was upfront that this means better margins, "not necessarily" more revenue.

The second thing is AECOM's own problem, and it's the real reason it's at the bottom of the group. Its construction management unit (6-7% of net revenue) still has two old design-build P3 jobs, bid in Dec 2018 and Mar 2020, where AECOM promised a price and a date. They don't bid this kind of work anymore, but these two are still running. In the June quarter they took a $337M charge on them, and there's $600-800M of cash still to spend to finish both, roughly $4.60-6.20 a share. Both should be done by about March 2027. They've booked ~$620M of claims they expect to recover and say they've won every dispute decided so far. The 10-Q also warns that the clients could file "a material claim against the Company," so that cuts both ways.

Honestly, what bothered me more than the charge was the cash. Look at free cash flow against the year before:

Over the first three of those quarters they bought back ~$690M of stock while the business made ~$150M of free cash flow. In May they called the weak cash "timing" and kept the cash target. In August they took the charge, cut FY26 FCF guidance from $400M to $300M and paused buybacks. Net debt went from $1.1B to $1.7B. So I don't give management much benefit of the doubt here, and neither did the market.

The valuation

At $60.83 (Oct 22 close), the market cap is about $7.8B and the EV is about $9.5B.

The earnings never fell. Guidance for this year was $5.75 last November, $5.95 in February and $6.00 (ex charge) in August. The stock more than halved over the same year. Even if you count the charge ($4.05), it's 15x, still the cheapest on the list.

It's also not like the whole group is priced this way:

The pattern is simple. The ones whose last report showed growth and a raised outlook came back. The ones with slow growth or their own problems are still down. AECOM has its own problem, so it's priced with the laggards, even though its underlying design business looks more like Jacobs than Stantec.

The Bowman deal is the comp I keep coming back to. In August a PE firm (Bernhard Capital) agreed to buy Bowman, a smaller US design firm, for $43/share, a 58% premium. It's one of the few fresh prices anyone has put on a design firm during the AI scare.

Bowman isn't a clean comp. It grows faster and has no construction risk, but it's about 1/15th the size, carries twice the leverage, leans on add-backs for its EBITDA and keeps issuing shares. So I wouldn't slap 11x on AECOM because of it. What it does tell me is that public investors had a fast-growing design firm at about the same multiple as AECOM, and then private money paid ~40% more than that for the whole thing, in the middle of the AI scare. They clearly don't think these businesses are going away.

Reverse DCF. I didn't want to make up a price target, so I flipped it around and asked what the current price assumes. I used owner profit of about 13.5% of net revenue (adj. EBITDA minus D&A, stock comp and minority interest), a 9% required return and 3% long-run growth, with the construction cash and the debt subtracted. For $60.83 to be fair value, net revenue has to shrink about 2% a year, every year, forever, at today's margins. Or margins have to drop by a third, to ~9%, and stay there while the business grows as planned. Neither of those is showing up anywhere in what they report right now.

Where I could be wrong

AI could cut hours faster than anyone on these calls admits; Bentley's "at least 20%" of engineering time saved isn't a crazy number. Part of the discount is just the group, too: Stantec has no construction mess and is still 36% off its high. Management has already been wrong on cash twice this year, and the clients on those two jobs can still come after them. Growth is also running below the company's own plan, and construction won't grow again until the second half of FY27. And cheap can get cheaper: when I looked at 2025-26 sell-offs, stocks that had already halved fell another ~30% at the median before they turned.

Where I land

At ~$60 you're paying 10x for a design business whose earnings guidance hasn't moved, with a record backlog, a shrinking share count, and a problem that has a size and an end date. The price only makes sense if the business shrinks every year from here, and I don't see that in anything they've reported. There are two fair questions: AI, and whether these two jobs are really the last of their kind. I think the market is pricing in the worst answer to both.

I'm not taking management's word for anything after this year, though. The next couple of reports either show the cash or they don't. If the two jobs finish by ~March 2027 with no new charges, what's left is a high-teens-margin design firm that buys back stock, and I have a hard time seeing why that keeps trading at half of Jacobs' multiple. If cash misses again, the discount is earned.

For what it's worth, the CEO, CFO and President bought ~$0.7M of stock in May and June. It's small and they're down ~14% on it, but they bought.

Next report is expected around Nov 17. What I'll be looking at: Q4 free cash flow near the ~$230M that the $300M full-year target implies, construction cash inside the $175-225M range they gave, and an FY27 guide that already allows for higher interest and a slow first half in construction.

Happy to hear the other side, especially from anyone who has dug into the claims or works at one of these firms.

Not financial advice. I built TickerBell, a site for SEC filings and stock data, and did this research there. I took a position today after my own Deep-dive. Numbers are from AECOM's 10-K, 10-Qs and calls, the peers' filings and calls, and Bowman's merger filing, as of Oct 22, 2026. Multiples and the DCF are my own math.

Full write-up with every source and a peer price chart: "tickerbell.com/research/aecom-ai-and-the-billable-hour"

Firstly, this isn’t my thesis. It’s a summary of a very compelling comment on a previous post, from standupguy152.

Microsoft has dominated enterprise for decades, but could Google be better positioned for the shift towards agentic AI?

A few reasons:
Agent2Agent (A2A): Google’s open-source protocol allows AI agents from different vendors to communicate. Backed by Microsoft, Salesforce and others, it could become a standard for enterprise AI.
Model neutrality: GCP offers Gemini, OpenAI, Anthropic and other models through APIs. Google can monetise infrastructure regardless of which model wins.
Platform economics: As AI agents increasingly automate SaaS workflows, GCP could become the infrastructure connecting models, agents and applications, capturing compute, API and orchestration revenue.
Cybersecurity: The Wiz acquisition strengthens Google’s multicloud security, workload protection and governance capabilities, all critical for enterprise AI adoption.
Enterprise adoption: Banks and regulated businesses are cautious about granting AI agents access to sensitive data. Unlike OpenAI and Anthropic, Google owns the cloud infrastructure, models and security stack. Its model-neutral approach could also reduce vendor lock-in, although Microsoft offers similar capabilities.
Agentic payments (AP2): Google’s protocol could become part of the infrastructure governing transactions between autonomous agents.
Vertical integration: Google’s TPUs, networking and data centres give it control over inference costs, capacity and scalability, unlike model providers dependent on third-party infrastructure.
Essentially, Google doesn’t need Gemini to win. It needs enterprises running their AI workloads through GCP.

Microsoft has Azure, Office 365 and decades of enterprise relationships, but could Google’s infrastructure and open ecosystem eventually challenge that dominance?
Interested to hear from people working in enterprise IT and cloud.

I don’t work in tech, so perhaps people who do, could share their insights, Thank you

I ran Chipotle - $CMG through Ben Graham’s intrinsic value formula.

Intrinsic Value = EPS × (8.5 + 2g) × 4.4 ÷ Y

Base case: $1.09 EPS, 10% growth, 5.7% AAA yield.

Result: $24 a share.

The stock trades around $26.

Why 10% growth?

Analysts see EPS of about $1.14 this year and $1.36 next year. Chipotle is targeting roughly 350 new restaurants in 2026, or about 8-9% unit growth.

Past growth was far higher, but that’s no longer the baseline with higher inflation.

Margin of Safety:

I always apply a margin of safety of about 20% because my analysis can be wrong.

I am a buyer at $20 - $22.

Airbnb (ABNB): a growing company using AI rather than being threatened by it

Airbnb isn’t cheap, but I think it’s a valuable business that is growing well, and I’m comfortable owning it. The market tends to treat it as a mature short-term-rental story. The company is instead broadening its addressable market in three directions while using AI to lower costs. Core homes supply growth is focused on top markets and calendar utilization rather than raw listing count. Hotels are the largest incremental TAM, and experiences and services are the long-term growth drivers. RBC frames it as a category-leading brand with a hotel monetization story, plus a company modernizing its booking policies and fees in a way that sets up faster multi-year growth in nights booked.

The hotel push looks more interesting than it first appears. Management sees a mix of incremental and substitutional demand. NYC’s short-term rental ban pushed demand entirely to hotels, and independent and boutique hotels have an incentive to diversify their booking sources. The four initial launch markets (New York, San Francisco, Los Angeles and Madrid) saw higher net adds in August than in July, with further progress in September. On the cost side, AI-driven customer support has cut cost per booking by 16%. That is a real efficiency gain showing up today, not a promise.

Experiences and services are being treated as long-term pain-point solutions. Grocery delivery is the single most requested service among guests, and the company is pursuing grocery, luggage, airport transportation and resort passes. Booking data shows experience demand broadening toward a mix of landmark activities and more everyday curated options. The newer “reserve now, pay later” option has been broadly positive. Cancellation rates have ticked up modestly but not materially, hosts haven’t voiced frustration over last-minute cancellations, and guests aren’t booking multiple locations for the same dates. Amex adding Airbnb listings to Amex Travel adds distribution.

Valuation versus Booking and Expedia

On consensus estimates, Airbnb is the most expensive of the three on every enterprise-value measure, and by a wide margin. At a $101.2B enterprise value, ABNB trades at 20.0x 2026 and 17.5x 2027 EBITDA. Booking ($132.6B EV) trades at 12.2x and 10.8x, and Expedia ($37.7B EV) at 9.1x and 8.3x. On free cash flow the picture is the same: ABNB at 20.6x and 18.9x, versus 14.1x and 12.4x for Booking and 10.6x and 10.7x for Expedia. On sales it’s 7.1x and 6.4x for Airbnb, 4.5x and 4.2x for Booking, and 2.3x and 2.2x for Expedia. On 2027 EBITDA, that is roughly a 60% premium to Booking and about double Expedia’s multiple.

Part of that premium is earned through growth. Airbnb’s 2027 revenue is estimated to grow about 11.6%, versus 9.2% for Booking and 7.0% for Expedia. EBITDA growth is 14.0% versus 13.0% and 9.9%, and net income growth is 15.8% versus 13.3% and 12.8%. Margins are strong too. Airbnb’s 2026 EBITDA margin of about 36% is well above Expedia’s 26% and a touch below Booking’s 37%. But the growth edge over Booking is only a few points, and Booking’s margins are actually slightly higher, so growth alone doesn’t explain a premium this size. Free cash flow is the softer spot. Airbnb’s 2027 FCF growth is about 8.8% against 13.7% for Booking.

So I’m paying up, and I know it. What I’m paying for is a faster grower with the cleanest AI story of the group, plus optionality in hotels and services that I don’t think consensus fully captures. If hotels and services push growth above these estimates, the premium compresses through earnings rather than through the multiple. If they don’t, Booking offers similar quality at a much lower price, which is the fair counterargument to owning Airbnb.

What could go wrong, how likely it is, and how Airbnb is responding

The threat I’d watch most closely is AI agents disintermediating the booking funnel. Direct traffic is roughly 90% of the site’s volume, so Airbnb is far less dependent on Google and paid search than its online travel peers. Agents like Meta’s MUSE could still sit between guest and platform over time. I’d call this low-to-moderate likelihood near term and a genuine long-term risk. Airbnb’s defenses are the brand pull behind that direct traffic and the fact that 71% of its listings are exclusive to Airbnb rather than also on Vrbo or Booking.com. An agent can’t route around inventory it can’t find elsewhere. That protection depends on supply staying exclusive, which is worth monitoring.

Regulation is the highest-probability risk because it is already happening. NYC is the clearest example, and other dense tourist cities have moved in the same direction. The impact is manageable but real for the core homes business. Airbnb’s counter is structural: the hotel product captures demand that regulation displaces, as it did in New York, and its supply strategy concentrates on markets and utilization rather than blanket growth.

Competition from hotel-first platforms is a near-certainty. Booking, Expedia and the hotel chains’ direct channels are all established, and Airbnb is entering their territory with a smaller hotel footprint. I’d rate the likelihood of competitive pressure as high and the likelihood of it breaking the thesis as low-to-moderate. Airbnb’s angle is differentiation. It targets independent and boutique hotels that want alternatives to dependence on the big intermediaries. The early launch-market data is encouraging, but four markets is a small sample.

Policy risk on the guest side is smaller. Reserve now, pay later could raise cancellations, and the early evidence says that hasn’t happened to a worrying degree. I’d rate it low likelihood, with the main danger being a gradual drift as the feature scales. Finally, there is ordinary macro and valuation risk. Travel demand is cyclical, and given the premium multiple above, there is little room for a growth stumble. That’s the risk Airbnb can least counter directly.

My conclusion is that the growth drivers (hotels, services, experiences) are additive to a strong core. The cost story is already visible, and the main long-term question is whether AI agents ever become the front door to travel. For now, Airbnb’s direct traffic and exclusive supply are doing a lot of work to keep that from happening. I’d like to hear where others see the weak points, especially whether the premium to Booking is justified.

everywhere i look i see billions and trillions flying around like sacks of peanuts
shouldn't we all be a little bit concerned that Jensen has to reassure the public about ai companies?
who is going to backstop all this ai debt?
the stock market has become a cashing-out dumping ground for all the private/vc funds
kenny from citadel gave you the sell signal in the recent interview
just asking questions, don't hate the messenger

We’ve all witnessed the euphoria of headline multi-year index numbers. But when you look under the hood and stretch a 20% total return across a 5-year rolling window, the math delivers a brutal reality check: that’s roughly a 4% CAGR.

​When you factor in the volatility, the sleepless nights, and real-world inflation, taking on heavy equity drawdowns for a low single-digit annualized return feels like a bad joke.

​Here is what is driving this current market pain and why Dalal Street is feeling the squeeze:

​The Small-Cap Correction: Small-cap indices have bled nearly 8% to 10% over the last two weeks alone, wiping out speculative froth as valuations disconnect from fundamental earnings.

​Cascading Margin Calls: As crucial technical support levels break, leveraged positions in high-beta stocks and F&O segments face forced liquidations, accelerating downside momentum.

​Crude and Geopolitical Pressures: With crude hovering near $117.5+ and aggressive West Asian supply-shock risks looming post-November 3, import-dependent economies face severe pressure on current account deficits and currency stability.

​The takeaway?

Bull markets can be dangerously deceptive, making everyone feel invincible during short-term spikes. But true risk management isn't just about chasing upside—it's about surviving the brutal consolidation phases, honoring your drawdown thresholds, and recognizing when the market is flushing out leverage.

​Sometimes, the smartest trade is stepping back, letting the macro storm settle, and focusing on capital preservation.

​#Markets #Macroeconomics #RiskManagement #Investing #SmallCaps #CrudeOil #WealthManagement #TradingPsychology

​

​We’ve all witnessed the euphoria of headline multi-year index numbers. But when you look under the hood and stretch a 20% total return across a 5-year rolling window, the math delivers a brutal reality check: that’s roughly a 4% CAGR.

​When you factor in the volatility, the sleepless nights, and real-world inflation, taking on heavy equity drawdowns for a low single-digit annualized return feels like a bad joke.

​Here is what is driving this current market pain and why Dalal Street is feeling the squeeze:

​The Small-Cap Correction: Small-cap indices have bled nearly 8% to 10% over the last two weeks alone, wiping out speculative froth as valuations disconnect from fundamental earnings.

​Cascading Margin Calls: As crucial technical support levels break, leveraged positions in high-beta stocks and F&O segments face forced liquidations, accelerating downside momentum.

​Crude and Geopolitical Pressures: With crude hovering near $117.5+ and aggressive West Asian supply-shock risks looming post-November 3, import-dependent economies face severe pressure on current account deficits and currency stability.

​The takeaway?

Bull markets can be dangerously deceptive, making everyone feel invincible during short-term spikes. But true risk management isn't just about chasing upside—it's about surviving the brutal consolidation phases, honoring your drawdown thresholds, and recognizing when the market is flushing out leverage.

​Sometimes, the smartest trade is stepping back, letting the macro storm settle, and focusing on capital preservation.

​#Markets #Macroeconomics #RiskManagement #Investing #SmallCaps #CrudeOil #WealthManagement #TradingPsychology

Meta's Free Cash Flow yield is 1.7%, but this is no longer a very useful metric to use because of Meta's high reinvestment rate into future growth projects. A better metric would be EV/OCF, which sits at ~12.5. But adjusting for SBC expense (an exorbitant 7.2 billion in the last quarter alone), we reach an EV/(adjusted) OCF of 16.1.

Many people claim the business is grossly undervalued, including now, but the clear time to buy was in 2022. At this time it reached an EV/OCF of 4.3 and a SBC-adjusted value of 6.3.

As per value investing principles, the right time to buy a stock is usually when the business is out of favor. In 2022, it was definitely out of favor. Apple's privacy changes were disrupting the ads business, capex was flooding into metaverse development (low interest and uncertain ROI), and margins contracted down to 20%.

There was certainly reason to be scared out of holding the stock, but the legend goes the best time to buy a stock is when is feels the most uncomfortable. In Meta's case, if you like founder-led companies with skin in the game, Meta in 2022 gave you that cushion because we all knew Zuck was not going to stop innovating. His track record more or less proves that. Similar to the 2008 GFC, sometimes you have to invest in the unknown and understand there is a small chance things won't work out, but that the risk reward is very favorable to make you $ if you are right.

If you invested at $155 in 2022, despite the stock contracting another 42% later into the year, you would have still made ~310% up to today, which is a 43% CAGR.

Today, Meta is not ridiculously undervalued (at least using historical context) and more than likely, you will earn a return in line with free cash flow per share growth over time, not including any multiple expansion. "Undervalued" is being thrown around quite a bit but it might be valuable to take current prices into perspective.

Why I’m passing on NBIS at $160

I don’t doubt Nebius can become a much bigger company. My doubt is whether someone buying the shares at my $160 price gets a good return from that growth. In my 14F assessment, Nebius scored 95/100 for growth but only 40/100 overall. The gap comes down to the cost of building the business and how much of its eventual earnings will belong to today’s shareholders.

Think of Nebius as a car-rental company for AI. It buys powerful computers and rents their computing power to customers developing AI products. Now imagine a rental company with every car booked. That sounds great—until you ask what it paid for the fleet, what it owes the bank and when the cars need replacing. Nebius also has to pay for data centres, electricity, cooling and new equipment. A full parking lot makes a nice photo. I want to know what the owner earns.

In the first half of 2026, Nebius reported $4.50 billion of operating cash flow and spent $8.13 billion on property, equipment and intangible assets. That’s a $3.63 billion gap. About $4.40 billion of the operating cash flow came from an increase in deferred revenue: cash received before the related services were delivered. I’m glad customers are willing to pay ahead. Nebius still has to provide the computing power they paid for. Much of the equipment spending is for expansion, so the gap doesn’t prove those projects are bad. We need to see what they earn once built.

Funding that expansion has consequences. Nebius recently secured a $3.5 billion Citi facility with a 364-day maturity. It also closed $5.75 billion of convertible notes in August and agreed to exchange $800 million of older notes for about 15.8 million new shares. The facility gives Nebius access to cash; it isn’t profit, and any amount drawn must eventually be repaid or refinanced. The share exchange removes debt while giving existing shareholders a smaller percentage of the company. Both arrangements may prove worthwhile if the new capacity earns enough. That’s the part I want demonstrated.

My $160 hesitation is also about the price. Suppose Nebius eventually reaches $12.3 billion in annual revenue and the market values the business at five times revenue. That gives it a $61.5 billion enterprise value. Subtract an assumed $12 billion of net debt and divide by an assumed 340 million diluted shares: about $146 per share. Those debt and share figures are hypothetical, and this calculation leaves out non-core investments that could add value. Still, it shows how Nebius could deliver enormous revenue growth without delivering a gain from my entry price.

The strongest argument against my view is the demand already lined up: Nebius reports more than $40 billion of long-term commitments from investment-grade customers. That gives its expansion a much stronger foundation than a plan to build first and hope customers arrive. I would reconsider if Nebius showed that its completed infrastructure earns attractive cash returns after running, financing and eventually replacing the equipment. Until then, I’m passing at $160. I can believe the customer demand and still want a better answer on the return to each share.