EndoCapital

Professional investor looking for quality equities that can be held for 5+ years. US/Asia focused. Tweets may include random memes. Not investment advice.

[Claire, aka Midwestern Hedgie 🏳️‍⚧️ 🇱🇧 @MidwestHedgie]

"I hired my 15-year-old as an intern this summer. He used Fable 5 to build a model for SpaceX and he says the stock should triple by 2030" is a thing that was just said with a straight face on CNBC.

[Lee Roach @leevalueroach]

SpaceX is the most overhyped IPO of the decade and it will end exactly the way every overhyped IPO ends. Facebook IPO’d at $38 and traded under that for 15 months. Uber IPO’d at $45 and is still below that adjusted seven years later for a while. WeWork tried at $47 billion and ended at zero. Robinhood IPO’d at $38, hit $85, then $7. Coinbase IPO’d at $381 and was at $40 two years later. Rivian IPO’d at a $100 billion valuation with no meaningful revenue and gave back 90%. Beyond Meat. Peloton. Lyft. DoorDash. Bird. Each one a “generational company” the day it priced.

Each one a wealth destruction event for retail within 18 months. The pattern is not a coincidence. Hype IPOs are designed to transfer wealth from the people buying the story to the people who built the story. The bankers get paid. The early employees get out. The VCs get a markup they can show their LPs. The retail investor gets the bag. SpaceX is a great company. That has nothing to do with whether it’s a great stock at IPO. Greatness was already priced in five funding rounds ago. You are not getting in early. You are buying the exit. The only IPO worth chasing is the one nobody is talking about. Those don’t exist anymore because every IPO is marketed like a movie release. So the answer is: don’t chase. Wait two years. Buy it down 70% when the lockup unwinds and the narrative breaks. Or don’t buy it at all and put the money somewhere the bankers haven’t already extracted the alpha. Hype is not an asset class. It’s a tax.

[EndoCapital @EndoCapital]

@HunterBiden Far more relatable than many of us would care to admit. Legend.

[Sean Pianka @seanpianka]

The central thesis of this episode of the Bloomberg Intelligence podcast with Leonid Mironov, a fund manager at Gavekal Capital, is that China is exiting its property drag into a stabilized, deliberately non-speculative housing market, and that the genuine investment story has migrated from real estate to a policy-curated set of sectors (semiconductors, power, commodities, AI).

Mironov's most load-bearing claim is that China's consumption weakness is a deflation-psychology problem, not a structural demand failure, and that a sustained PPI turn (which he dates to February 2026, confirmed in March) is the missing catalyst that could unlock large deferred savings.

Wrapped around both is a structural argument: Chinese capital markets are maturing toward sticky, return-of-capital-driven equity ownership, which changes the long-run quality of the opportunity.

Core Arguments and Talking Points

1. The drag from housing is dissipating, but this is a transition to a stable, low-speculation market rather than the start of a new property bull market.

2. Value-weighted vs square-meterage-weighted framing produces opposite pictures; tier-1/2 and tier-3/4 markets will resolve along entirely different paths.

3. Headline/raw inventory counts are misleading; the credible bearish signal is depressed and still-declining gross rental yields as completions roll in.

4. Property transmits to consumption through both jobs (direct and supply-chain) and the household wealth effect, which currently suppresses spending and inflates savings.

5. April retail weakness overstates structural softness because two large categories are lapping expiring subsidies; underlying services and online consumption are healthier.

6. Three years of deflation have trained consumers to defer purchases; only a sustained producer-price (PPI) turn can flip the mindset and release deferred spending.

7. Beijing's campaign to curb destructive competition is tailored per industry (EVs vs lithium vs solar), and that granularity is why Mironov expects it to succeed.

8. China exposure should be built bottom-up from excellent companies that pass a top-down policy-alignment filter, with no index exposure.

9. A concrete sector map of where policy alignment plus earnings quality overlap.

10. Mega-cap internet names sit ambiguously between funding sources and AI beneficiaries; there will be winners, but value articulation is the swing factor.

11. Allocator willingness to even meet on a new China fund has shifted markedly, signaling thawing institutional sentiment despite a more difficult macro.

12. Two catalysts could change the China narrative, a slow-burn structural reform toward sticky, capital-allocation-driven markets, and the symbolic milestone of a first trillion-dollar company.

Cross-Cutting Themes

- Two-speed / K-shaped everything: The same bifurcation recurs across property (tier-1/2 vs tier-3/4), the macro economy (exports vs consumption), and the consumer recovery itself (luxury / top-end first, trickling down). It is Mironov's default lens.

- Policy alignment as the master variable: "Houses for living," the 15th Five-Year Plan, anti-involution, semiconductor indigenization, and financial-market reform are all treated as a single coherent policy signal that should drive both sector selection and exclusions.

- Deflation-to-reflation as the hinge: The consumption case, the property-yield case, and the equity-flows case all ultimately depend on a durable shift from deflation psychology to rising prices, with the Feb/Mar 2026 PPI turn as the pivot.

- Structural market maturation: Buybacks/dividends exceeding net issuance, pension/insurance sticky money, M&A normalization, and consolidation toward fewer, larger producers all point to a more institutional, capital-allocating China market.

Contrarian or Non-Consensus Views

- "Bottoming, not rebounding" explicitly splits from both the bullish rebound camp and the still-bearish camp Mironov says divide the street roughly in half.

- Consumption bears are over-reading the data: April weakness is attributed to subsidy base effects (>15% drops in white goods and EVs), not structural demand failure.

- Anti-involution will succeed because it is industry-specific; implicitly counters skeptics who treat it as ineffective sloganeering.

- Fully ditch the index rather than manage relative to a benchmark, a stance against conventional China beta exposure.

- Solar involution is a deliberate strategic positive China will not aggressively curb, contrary to a uniform "crack down on overcapacity" read.

- A dissenting equity pick, not Tencent or Alibaba, as the first Chinese $1T company post-IPO, this year. Listen to the full episode to find out which one.😉

As always, a fascinating discussion on a widely misunderstood capital market from @Gavekal.

[EndoCapital @EndoCapital]

@PSAcard Becoming increasingly apparent that you guys are gating grades...e.g. a PSA 10 being graded as a PSA 9 more and more often to protect population, which drives up auction prices for existing PSA10s, and therefore demand for graded cards.

How can you ensure graded consistency?

[EndoCapital @EndoCapital]

@JeremiahDJohns Imagine thinking a random propaganda piece from FT is real news.
Embarrassing.

[EndoCapital @EndoCapital]

@MsMelChen @business “Old European model of values-based diplomacy” - the US invented this concept post WW2, alongside Europe, and centralized the power structure on itself.

What an intentionally misleading post.
You should be embarrassed by this.

[EndoCapital @EndoCapital]

@MikeZaccardi They’re all piling into Korea and Taiwan rn. It’s just typical rotation.

[EndoCapital @EndoCapital]

@scottcharts @MikeFritzell Just had index builds

[EndoCapital @EndoCapital]

"I bet you take all your girls here"

[RussiaNews 🇷🇺 @mog_russEN]

🚨⚡️ Xi was showing off 300-year-old ancient trees in the secret Zhongnanhai gardens.

Trump ignores the trees and asks: "Do you bring other Presidents here?"

Xi shakes his head: "NO."

-: Trump just wanted to make sure he’s the favorite. Peak Main Character Energy! 🤣😂

[goldenlabubuwatch @pandawatch88]

Tencent results were in line with what management has been guiding since early 2026 (and why the stock has been collapsing since, hitting 52w lows week after week):

-The age of 8-12% top line 18-20% bottom line is gone (or paused) since they have decided (later than others) that AI investment needs to ramp up fast.

-They also show that ex-AI investment, EBIT would be up 17% (hey, GAAP is a four letter acronym, and I'm with Martin here, if you can make investing in datacenters disappear from the P&L, why not disappear investing in models and customers too)

-The numbers show they are not offsetting this investment by squeezing more money out of customers, unlike Meta, Microsoft, Google. Why is that no idea, options are:
---A) they want to maintain product quality (although ad impressions are going up) or
---B) they don't have the pricing power that the US guys have (Microsoft raising your MS Excel price by 30% and calling it "AI ROIC" or Meta increasing ad inventory and pricing and calling it "better targeting with AI").

Three interesting things from management on the call:

1-Good macro signal on payments (nobody followed up on this in the call, or asked how 2Q is going):
--First time I see in many quarters that average Wechat pay transaction size goes up.
--James: "For commercial payment volume, year-on-year growth was faster than in the fourth quarter of last year, benefiting from an ongoing increase in the number of transactions, but also higher value per transaction in categories such as retail and dining services."

2-On bottlenecks, the drama remains GPUS and ASICs. Tencent is not tight in CPUs.
--GPUs deliveries picking up in 2H26. More fab capacity "in neighboring countries" being made available to Chinese players (presumably not Huawei) is likely bullish the new listed GPU/ASICs guys.
--James on GPUS: "GPU bottleneck has been much more pronounced in China than elsewhere combination of policy restrictions on certain foreign design GPUs being brought into China, China design GPUs facing limited fab capacity within China. That's now being addressed because the China designed ASICs are seeing more supply from fabs within China as well as more supply from fabs in neighboring countries."
--On CPUs: "by contrast, we haven't faced those sort of artificial additional constraints on CPU or networking chips. We have very long-term relationships with the companies that supply the CPUs and networking chips. On their side, while one might think that these suppliers would be sitting back and just selling at the highest possible price into the spot market, that's not actually the reality. The smart suppliers are taking very conscious 3 to 5-year forward views and negotiating long-term agreements in order to give them certainty of their revenue outlook over the next 3 to 5 years. We've been a big customer for Intel and AMD for many years. We will continue to progressively grow our volume for many years to come."

3-James is in the camp that current ad model is more at risk from AI on ecommerce players than Tencent (surprise right?)
--"it's certainly more of a issue potentially for e-commerce companies than it is for us because users actively choose and desire to spend their time watching short videos or listening to music or consuming content or chatting with their friends, versus generally speaking, you know, when users spend time on e-commerce, it's because they're trying to find the lowest price. It's not because they, you know, necessarily enjoy that process."
--"To the extent that AI agents play a bigger role in the future in facilitating price comparison, then it's possible that users will spend less time on e-commerce sites and be less exposed to ads than they are today, while the AI agents can scan infinite listings and are therefore not influenced by ads the way that human beings with a finite attention span are influenced.
--"All of that said, there's been many prior iterations of price comparison services, including search engines and the big e-commerce companies have generally thrived despite the existence of those price comparison services. It's premature for us to sort of have a definitive view on how it will affect our friends in the e-commerce industry."

I like Tencent management, being the most honest among all big tech players acknowledging they have no idea were AI ROIC is going to come from (echoing the interview the other day with the Databricks founder, who said all CEOs tell him the same in private)

Liking the management doesn't mean liking the stock though. The profit is only being made in one place, and seems to me we remain in the token machines > token sellers > token buyers paradigm for now. If AI really works, it will end up reversing the order. If it doesn't, this stops and we move onto the next thing.

[Noodles @criptopaul]

Axios reported an Iran deal as “imminent” five times in 19 days. Five times, no deal. Why does the same story keep coming from the same reporter?

His name is Barak Ravid. Deep sources in the White House and Israeli intelligence. Every time the administration needs to pressure Iran or move oil, Ravid gets the call. Is he reporting news or delivering a message?

$760 million in oil shorts placed 21 minutes before the April 20 Iran announcement. Who knew?

Yesterday Trump paused the naval operation in Hormuz. Markets rallied.
But zero US ships crossed the Strait on Tuesday. Iran says they “have not even begun yet.” Does this sound like a deal?

Iran wants 5 years on enrichment. The US demands 20. Is that a negotiation or a performance?

Every time the leak drops, oil sells off and futures rally. Every time, nothing gets signed. Ask yourself who benefits from the market believing a deal is close right now.

Now they say a response is expected within 48 hours. Again. This after Iran resumed attacks on shipping. I remain deeply skeptical.​​​​​​​​​​​​​​​​..

[Brett Caughran @FundamentEdge]

This is so true. I lived this.

Functionally, my career as a "hedge fund guy" was over at 32. I built my ego around being a rising star, working at blue chip hedge funds, big bonuses, living the hedge fund lifestyle (fancy dinners, Hamptons share, brokers rolling out the red carpet).

A bad career decision, a few bad trades, and not only did my self identity shift from "rising star" to "damaged goods", but my nervous system was so shot that I couldn't even muster the energy for a comeback attempt.

I pulled the plug and moved my family from NYC to Arizona. I thought the change of scenery & lifestyle would be an immediate balm to the the angst I felt inside. Instead, things got dark, and really for the first time in my life, I struggled with depression.

My advice to anyone who peaks early is the criticality of a new dimension of purpose. For me, three young sons (at that point, 6, 4 & 6 months) and a loving & supportive wife were the critical elements that kept me on track, and got me back on track. And, in retrospect, the pain was the biggest gift I've ever received, as it drove a deep exploration of spirituality & the true architecture of the universe. I had time and space to explore questions I never had time to explore before, like "Who am I and why am I here?".

[Donald J. Trump @realDonaldTrump]

Gas prices are at crazy levels--fire Obama!

[EndoCapital @EndoCapital]

Best thing I've seen in a while. Would be concerned as a shareholder but in a "Elon has your money" type of way. Could be positively surprised.

[Josh Young @JoshYoung]

Instant classic

[Mayowa @Mayoveli]

This cost them about $1 trillion.

The truth is, you cannot build systems like this exclusively on the logic of profit. You cannot expect to break even in 20 or 30 years. Projects of this scale are built because the government decides they must exist to serve the people.

And this is a problem with systems that are strictly, or overwhelmingly, capitalist. If you leave every problem in your society to the spontaneity of the market, some challenges are so large and so unprofitable that you will never have sufficient incentive to solve them.

[tae kim @firstadopter]

Nvidia CEO Jensen Huang says don't listen to CEOs with a god complex on AI (lol, Dario) $NVDA

On AI destroying jobs: "these kind of comments are not helpful .. somehow they became CEOs, you adopt a god complex and before you know it, you know everything"

"ground ourselves to talking about the facts" AI will "generate hundreds of thousands of jobs .. trillions of dollars [to the U.S. economy]"

[Bark @barkmeta]

Realizing the best performing asset of the last 5 years wasn’t Bitcoin, stocks, or gold…

It was Pokemon cards.

[EndoCapital @EndoCapital]

@sacredrain Indians bullshit their way to SO many top management positions in the US. The f are you talking about? Hahah

[EndoCapital @EndoCapital]

@coholismal @patrick_oshag @marvinliao And is there any risk to those global companies' international growth story?