JP Insights

I write about the boring stuff behind AI.
Power, cooling, optics, networking, semis and data centers.
Ex-Big 4 Auditor
NFA

[JP Insights @jpinsights]

I decided to publish my latest Substack piece here on X Articles as well.

I go through why I believe Vertiv $VRT could relatively comfortably double from here over the next two years.

I lay out the math behind that view, share my thoughts on the latest report, and take a closer look at the balance sheet and cash flow.

And finally, I reveal how large the position has become in my portfolio.

[JP Insights @jpinsights]

https://t.co/bPPKubRsWe

[JP Insights @jpinsights]

@TheEquityHub 💯 There is a reason its my biggest holding

[JP Insights @jpinsights]

Moving 20% of my portfolio into $VRT after the post-earnings selloff has worked out pretty well so far.

[JP Insights @jpinsights]

@cashflowmuse Love to see it. Will check it out tomorrow

[JP Insights @jpinsights]

Which earnings reports have impressed you the most so far, and why?

For me, $BE and $VRT. $BE delivered the bigger positive surprise, while $VRT combined strong demand, improving margins and another raise to the outlook.

[JP Insights @jpinsights]

@Stockxshane Agree with that take. The market seriously overreacted here. Seen it plenty of times before. Stocks sell off on the headline, but once you dig in, the report is often much better than the initial reaction suggests. Vertiv was a perfect example

[JP Insights @jpinsights]

@JackOh28 Good point. I haven’t gotten that far yet. I’ve mostly been looking at the financials, but they’re strong enough to warrant a closer look at the company as a whole.

[JP Insights @jpinsights]

I know Reddit $RDDT isn’t what I usually write about, but I can’t help thinking its balance sheet is a rare 10/10.

The company ended Q2 with roughly $2.8 billion in cash and marketable securities, against only about $351 million in total liabilities. It also generated $262 million in operating cash flow during the quarter.

What are they going to do with all that cash?

For now, a large part of the answer is buybacks. Already spent $239.6 million by the end of Q2 on a $1B share repurchase program so roughly $760 million still available.

What do you think? More buybacks? Acquisitions?

[JP Insights @jpinsights]

@xbhuslapwk Got it. Well, lets see how they do. So far buying back their stock seems like a good choice.

[JP Insights @jpinsights]

@outerbridgecap @TacticzH Hehe, think in going to browse around a bit. Any subreddits you recommend?

[JP Insights @jpinsights]

@TacticzH First time I ever make a list 🥳

Keep it up Hazel. Or only you could use your dms more 😂

[JP Insights @jpinsights]

@xbhuslapwk Did I say it was a concern? Im curious on the different options they see fit going forward

[JP Insights @jpinsights]

@TacticzH Haha fair.

I don't know much about it as a platform. I have been there a few times but there is 0 serious comments. It's all memes and jokes and I have to read them in some weird thread format.

But numbers look good.

[JP Insights @jpinsights]

@otigart @Sandeman52 I find those motivating if done properly.

[JP Insights @jpinsights]

@TheAIShrink What?

[Weary Centurion @weary_centurion]

Over the last few months Iv realised how many people on here really have no idea what they are doing, and it’s A LOT

I can count on one hand how many truly objective, rational investors there are running large accounts

You may think I’m joking but I’m not

The vast majority of large FinX accounts place importance in price action above all

If a stock is up and it’s been on a strong run, then its time for a bullish echo chamber

If a stock is down or has been trading sideways for more than a few months, then it’s a dead company and nobody will even look at it anymore

The hindsight bias is eye watering

A companies performance is judged by the stock chart, not the numbers it reports each quarter

Stocks like $NBIS which have run from $20 to $300 can literally do no wrong

If it drops it’s automatically a buying opportunity

If it goes up then it’s time to start making claims that it’s going to $1000

Anyone who challenges the thesis is attacked by the rent a mob

People are judged by their YTD performance instead of their actual content

They gambled their way to a 300% return in a year? Genius. New Warren Buffet

They are invested in a stock which is down 50%? Loser. Ignore at all costs

People don’t realise that relying on short term returns as validation for credibility is the equivalent of idolising someone who just won some money in a casino

People like Kevin Xu, who did the equivalent of putting his entire net worth on red or black multiple times and was lucky enough to keep doubling his money until he had a vast sum

He then used that experience to market himself as an investing genius and now charges people $200 a month to listen to his knowledge, which consists of “this is a good story let’s go all in”

The amount of grift that has crept into this platform over the last couple of years has been depressing to witness

And the amount of bad advice being propagated by self proclaimed geniuses has created an environment so toxic, it’s almost impossible to get noticed with high quality authentic content anymore

Nobody wants it. People just want the “get rich fast” handbook and there is a long list of grifters on here willing to sell it to them in some form or another

When this market eventually breaks (and it will) there will be a massive reset

I look forward to that period not because of the amount of people who will inevitably leave the market forever, but because it may create an environment where value is popular again

I still think monetisation on here was the worst thing that ever happened

It has ruined the platform

Judge a man by his content, his reasoning and his character

Not how much money is in his bank account or how much profit he made this year

Rant over

Not financial advice

[JP Insights @jpinsights]

https://t.co/bPPKubRsWe

[JP Insights @jpinsights]

@embgaspbaud Thank you! I really like the risk/reward here.

[JP Insights @jpinsights]

https://t.co/bPPKubRsWe

[JP Insights @jpinsights]

@AtlasShrug1 @Christi39963492 Ah sorry misread your comment 😊

[JP Insights @jpinsights]

@AtlasShrug1 @Christi39963492 Basket of shitcos?