Capital Stack Jack (SS Model Torturer)

Here to learn

[Unemployed Capital Allocator @atelicinvest]

First of all, these models are S tier at three things:
1. 'transforming' information - including translation, explanation, summarization
2. finding patterns - in both numbers and words
3. generating hypothesis

They are not good at predicting the future. They might throw out a reasonable sounding hypothesis, but not a rigorous one.

Read: Use them to understand the past and the present. Stop using them to generate forecasts.

[Capital Stack Jack (SS Model Torturer) @Goldridge_Cap]

@compoundpapi @shywombats Future GOAT material

[Unemployed Capital Allocator @atelicinvest]

The world's richest companies told you that they were going to blow all their money - literally thousand yards+ a year - into buying literally every every computing hardware that's out there out on the market, and you had 6 months+ to adjust to this with all the evidence pointing towards it and you missed it entirely because you grew up in a world where computing hardware was a dirty word. You're literally no better than Hoult's character in this movie. You know how to sound like you know what you're talking about but when an opportunity comes knocking at your door you couldn't think from first principles out of a wet paper bag and missed out on a generational run that even a small % allocation would have changed your career entirely. Now you're just left holding your dick in your hand hoping desperately for this to be a bubble and everything to come crashing down so you look like a hero once again just like 25 years ago

[Uzo @Uzocapital]

In my first "Pattern Recognition" piece 3 months ago I laid out 10 similarities i saw in $EVC at $3 (+300% since) and $APP at $70 in June 2024 (now $515).

In today's write up I lay out the 10 similarities i see today in $MRLN at $5 and $ASTS 3 years ago, at $5 (vs $89 today)

[AuxReignots @Reignots]

New position in $HONAV - the when-issued stub for $HONA ahead of the June 29 separation.

At 320M DSO at ~$250 this is a $80B cap stock, +$15B net debt = $95B EV. 2025 EBIT $4.3B, guiding to 6-8% rev CAGR to 2030 and "faster" EBIT growth. At 10% (way too sandbagged) you are looking at $7B EBIT by 2030 putting this at mid-teens EV/EBIT on 1-2FY basis.

How did other Aero spins do? $HWM is up 18x from 2016, $GE is up 165% since $GEV spin 2024 and 585% since $GEHC spin 2023. $GE trades 35x 2027 EV/EBIT, $HWM 34x. $HONA over-indexes to avionics and auxiliary power in engines - and perhaps less-attractive sub-commercial - but I don't think it deserves a 50%+ haircut.

And of course, these big conglomerate unlocks always open massive synergies and streamlining and I think Aero has been a key proof point of this with Howmet and GE Aviation. This has become a largely non-cyclical catch-up supply-capped business. And there will be some defense tailwinds as well in the aftermath of US-Iran.

Not sure how this trades out the gate but I suspect people are not stupid and are well-versed in GE and Howmet and Rolls-Royce and other Aero monsters in recent years. You get another bite at the apple here. I suspect $HONA should meaningfully outperform $HON remain-co, but the real prize is a potentially 2x+ re-rate on top of an earnings figure that can grow well above LDD once the Aero-focused managers are free to grow and allocate capital away from the captive conglomerate shell.

[Capital Stack Jack (SS Model Torturer) @Goldridge_Cap]

@atelicinvest $FND

[Capital Stack Jack (SS Model Torturer) @Goldridge_Cap]

@n0th0stl3tk0v3r Put it all in the fridge drawer

[Shanu Mathew @ShanuMathew93]

Great walk-through & visuals.

Key point: "If token throughput per watt rises faster than price per token falls, revenue per gigawatt can net expand. This is compounded by models getting smarter, which unlocks higher value tasks for end users [justifying increased costs]"

[Unemployed Capital Allocator @atelicinvest]

On today's upgrade to better-edgar

1. earnings packets (pre-alpha preview). we now process every earnings and provide high level summaries. Good way to get a quick overview of who reported what.
2. MCP improvements. Honestly man, I did a lot here and I don't exactly remember what I did. It's not perfect, but it's pretty good. Connect it up to Claude / ChatGPT and just ask away to see how it works.

[Z22 @Z22Holding]

$TVK $TVK.TO news made a lot of noise yesterday for obvious reasons. Many different takes on the situation; some good, some terrible.

In my view, the gap between "intrinsic value" & "career risk" is exactly what caused that 40% intraday drop.

When an insider trading investigation hits the news, the math at an institutional PM’s desk changes instantly. It stops being an analysis of FCF or tank trailer synergies from the Entrans deal… it becomes a question of mandate, optics, and self-preservation.

For a PM who just built a position over the last few Qs as liquidity improved, this news is a sh*tshow. If they defend the name, add to it on yesterday dip, and more sh*t hits the fan (AMF lays formal charges that disrupt management permanently), that PM has to look at their CIO or IC & explain why they tried to catch a falling knife tied to an ongoing regulatory probe. In institutional firms, losing $$ on a bad earnings report is defendable; losing $$ bc you tried to play hero on an insider trading scandal is a career-ending move.

Another aspect that some people seem to forget is that many institutional mandates have strict ESG or corporate governance clauses. An active AMF investigation targeting the biggest shareholder & chairman can trigger automatic sell flags for them.

Last point: PMs w quarterly benchmarked funds have to dump it quickly to get it off their books before reporting periods. They just can’t afford to hold a 30-40% drag while waiting for a “potential” multi-year AMF process.

While institutional PMs have more rigidity in the way they invest (tracking error, active share, etc.), individual investors play a fundamentally different game (some might call it an edge). Retail/individual investors have the luxury of being patient if they want to. If they believe the business cash flows remain and the thesis is intact, you can lean in into that dip. It’s a classic case of different players playing entirely different games on the same field.

Anyway, that’s my take on the TVK saga.

@CJ0pp3l @JerryCap

[Andrew Pogue @UnderlyingValue]

You can learn a lot asking management teams to talk about their largest investors.

It's important to understand how they view owners of the company if you're going to become one:

-- First, do they know who their top five holders are? If they don't, this is normally a red flag in micro-cap land where the cap table isn't a bunch of passive institutions.
-- Has a shareholder ever changed your mind on capital allocation? Walk me through it.
-- What are some of the top concerns of shareholders? How are they being addressed? This is critical in any turnaround. Too often you find a business being poorly managed and it's because all the largest shareholders are passive and management doesn’t have skin in the game.
-- Who do they consult for strategic and operational direction. 'What was the biggest decision you made in the past year? Who helped you solve it and what was the outcome?'

[Capital Stack Jack (SS Model Torturer) @Goldridge_Cap]

@compoundpapi Yes brudda you got the contacts in the industry too

[Capital Stack Jack (SS Model Torturer) @Goldridge_Cap]

@compoundpapi Why tf aren't you in equity sales

[Capital Stack Jack (SS Model Torturer) @Goldridge_Cap]

@DiscountedTF AYO 🧐 congrats on the move

[Divergent Capital @Divergent7651]

It's a good day to re-read @HorizonKinetics commentary on why securities exchanges are great businesses:

https://t.co/tcUInA5Y7p

$CBOE $CME $ICE $MIAX

[buyhighsellhigher @ebitdaddy90]

Complete waste of time imo to do actual fundamental analysis now. You should be thinking about how these tools will cause others to make mistakes, flows, positioning etc. all your effort should go into the Keynesian beauty contest, the fundamental story can easily be digested in 5 minutes now with little juice left to squeeze by doing more work.

[FP&Anon @anonfpa]

Jesus the intern won’t stop asking questions like dude we gave you the Claude log in and unlimited usage

[Pythia Cap: Partially Conductive @PythiaR]

Collected thoughts on $GOOG:

1) Significant chunk of the ATM will be used for employee SBC tax obligations (screenshot).

2) Ruth Porat is a very savvy financier and zero chance she was not involved in this in some way, meaning how this was structured (specifically: equity vs. debt) was very deliberate.

3) All the hypers can see future capabilities, cloud pipelines etc. you cannot, and are making investment decisions accordingly h/t @GavinSBaker @TMTLongShort

4) The entire supply chain is strained and $NVDA is showing that the only real way to continue your lead is to throw money around that nobody else can match to secure supply. $GOOG can also play that game, and given #3... they probably should.

5) For $GOOG, this is existential. Larry Page stated internally he'd rather go bankrupt than lose this race. During Google's early days the vision for Google was AI that understood the web, it's no surprise they would pull every stop out with that kind of outcome in sight, and relatively few competitors who can credibly compete.

[Capital Stack Jack (SS Model Torturer) @Goldridge_Cap]

@ConsensusGurus 🤔

[Capital Stack Jack (SS Model Torturer) @Goldridge_Cap]

Anyone have any helpful resources to ramping up on large pharma & generics? 🙏