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6. End of cheap compute - Joost van Dreunen

7. The fourth exponential - Tae Kim

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9. Small-cap lottery tickets - Daniel Rasmussen

10. Scaling versus profitability - Aswath Damodaran

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Letters, Presentations, Writeups…

Industry Insights: ai | autos | exchanges | healthcare | oil and gas | software

Geographic Insights: Argentina | India | Ireland | Taiwan

Letters: J.P. Morgan | Second Wave | Silver Beech

Company Insights: Applied | Deckers | Flitto | Nvidia | Shurgard | Vivendi

Company Slides: AEO | Descartes | Energean | Glenveagh | Gym Group | Inditex | Korn Ferry | Macy’s | Playtech | Teck | THG | United Natural Foods

5 Videos We Are Watching This Week

1. a16z - Why investors are rethinking almost everything about the AI era

2. DoubleLine - Jeffrey Gundlach on long bonds and the Fed’s next move

3. David Senra - Zach Dell on building Base Power for the next 50 years

4. Six Five Media - Marvell CEO on where AI’s next bottleneck now sits

5. Mohnish Pabrai - A Q&A with Copenhagen Business School students

5 Podcasts We Are Listening to This Week

1. Norges - XPeng’s co-president on physical AI, robots and flying cars

2. How I AI - Inside Kai, the AI agent used weekly by 10,000 Stripe staff

3. Mindscape - Jared Diamond on the course of history and its leaders

4. The Insight - Oaktree’s credit co-CEOs on risk in direct lending today

5. Price-to-Value - Neil Vogel on brands and capital allocation at People

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In 1997 Jeffrey Sprecher, then a power-plant developer, bought the Continental Power Exchange, a struggling electronic energy-trading platform in Atlanta, for a token sum plus the assumption of its liabilities: a dollar by the oft-told account, a thousand by others, and Sprecher has said he cannot remember which. He relaunched the platform in 2000 as Intercontinental Exchange (NYSE: ICE). ICE now owns the New York Stock Exchange, the Brent crude oil and TTF natural gas benchmark contracts, and the European Union’s carbon market. Its FY2025 net revenue of $9.9 billion was its twentieth consecutive annual record, and its market capitalization on August 31, 2026 was roughly $90 billion.

The report describes the investment case as toll roads on capitalism: an exchange collects a very small fee on a very large and recurring volume of trading, hedging, and price referencing, on a platform whose costs are mostly fixed. CME Group (Nasdaq: CME) earned just under $0.70 per contract in FY2025; on an E-mini S&P 500 future with about $300,000 of notional value, the roughly $0.61 it collects is about one-fiftieth of a basis point. Operating and EBITDA margins across the major exchange groups were 50–79% in FY2025, and derivatives volumes rise in periods of market stress, when most other businesses suffer. The fee is not guaranteed, however. Between 1993 and 1998 the all-electronic DTB, later Eurex, took the Bund futures contract from LIFFE’s London trading floor: its share of volume went from roughly 24% in 1993 to above 50% in January 1998 and above 99.9% by October 1998. The report explains why that migration happened and why no cleared derivatives franchise has migrated to a rival in the twenty-eight years since. Those two answers cover most of what an investor needs to know about competitive advantage in this industry.

Shareholder returns since these businesses became investable are the report’s starting point. Fourteen major venues have returned a median of roughly 16.7% a year since their IPO or demutualization, against about 10.5% for the S&P 500 measured from CME’s December 2002 listing. Ten thousand dollars invested at the first day’s close became roughly $1.24 million at Hong Kong Exchanges and Clearing (HKEX: 388) and $699,000 at CME, but only about $15,000 in dollar terms at the predecessors of Brazil’s B3 (B3: B3SA3), a spread of roughly 80x within one industry. The report’s argument is that the variables behind that spread, captive clearing, entry price, the shift toward data revenue, and the quality of capital allocation, were observable in advance and still are. This is the first primer in a weekly series whose purpose is to help readers expand or deepen a circle of competence, one industry at a time. Exchanges are a good place to start: the industry’s history is well documented, its unit economics are disclosed monthly, and its long-run return data go back decades.

The companion deck. Exchanges & Financial Market Infrastructure: a self-contained summary of the report in slide form.

Companion Deck - Exchanges

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What’s inside

The primer has two parts: a 223-page report (attached below) and a 53-slide companion deck (attached above). The report has eight parts, twenty-five chapters, and four appendices, with 26 exhibits, 28 tables, and three photographs; every figure is dated and sourced in the notes. The highlights, part by part:

Part I, Orientation. Why the industry is worth studying, how an exchange group makes money, and a map of the industry: eight venue types with different economics, the clearing and settlement layer that determines who keeps the profits, and the data and index businesses where most of the strategic activity of the last fifteen years took place. The listed universe is roughly 45 companies with a combined market capitalization of about $700bn, less than that of a single mega-cap technology company, plus several user-owned utilities that cannot be bought.

From Chapter 1: annualized total shareholder returns of fourteen venues since their first trading day. The two best performers, Euronext (Euronext Paris: ENX) and Japan Exchange Group (TSE: 8697), were also the cheapest at listing, at roughly 10.6x and 7x earnings. The table includes only survivors; an unscreened buyer of demutualized exchanges earned high-single-digit returns.

Part II, Evolution. The industry’s history from 1602 to 2026: the Dutch East India Company’s share issue and the Amsterdam exchange of 1611; the Buttonwood Agreement of 1792, whose minimum commission survived until 1975; the invention of financial futures and listed options in Chicago in the 1970s; the end of fixed commissions in New York in 1975 and London in 1986; electronic trading, demutualization, and the consolidation that followed, in which vertical and data acquisitions closed while antitrust and national politics blocked nearly every large cross-border exchange merger after 2011. Four case studies: the Eurex–LIFFE contest for the Bund, ICE’s acquisitions from 2001 to 2026, the regulatory reduction of the NYSE’s share of trading in its own listings from roughly 80% to about 22.5%, and the two modern clearing crises, the Aas default at Nasdaq Clearing in 2018 and the LME nickel crisis of March 2022.

From Chapter 5: the share of Bund futures volume traded on DTB/Eurex versus LIFFE, 1993 to 1998. The report identifies three preconditions for the migration: order flow sponsored by the challenger’s owners, a genuine all-in cost advantage, and open access. No later challenger has had all three.

Part III, Structure & Economics. Where the profits sit along the life of a trade and why: execution margins are low wherever the product can be traded elsewhere; clearing margins are high wherever positions are held in the exchange’s own clearinghouse, which earns both fees and interest on margin balances; and data and index revenue earns software-like margins. Volume drives transaction revenue and volatility drives volume; the report tests the claim that exchange volumes rise in market stress against the episodes of 2008, 2022, and April 2025 and finds that it holds. Each exchange group is a combination of six business models on a largely fixed cost base, which is why incremental margins at the major groups were 76–95% in FY2025 and why earnings fall as fast as they rise when volumes turn. The chapter on moats examines seven attempts since 1998 to take a benchmark futures franchise from its incumbent. Six failed; the seventh, FMX, backed by BGC Group (Nasdaq: BGC), is still running.

From Chapter 11: the two ownership structures for clearing. Clearing the same trade supports margins of 60–80% where the exchange owns the clearinghouse and roughly 0% where clearing is done by a user-owned utility at cost.

Part IV, The Players. Profiles of the listed companies, organized by three variables: whether clearing is captive or shared, how much revenue is recurring, and whether the franchise depends on a regulatory grant. CME, ICE, and Cboe Global Markets (Cboe: CBOE) hold the main derivatives and options franchises; London Stock Exchange Group (LSE: LSEG), Nasdaq (Nasdaq: NDAQ), and Deutsche Börse (Xetra: DB1) have shifted toward data and subscriptions; the regional exchange groups each depend on one structural feature of their home market; and India’s exchanges, which form the world’s largest derivatives market by contract volume, are the most exposed to regulatory change, with the National Stock Exchange’s IPO filed in June 2026 at a valuation of up to roughly $60bn. A chapter on the executives with long value-creation records compares Sprecher’s acquisition-led strategy at ICE with Terry Duffy’s distribution-led strategy at CME; they produced returns of about 18% and 19.6% a year respectively, and both kept clearing inside the company. A final chapter covers the unlisted institutions, DTCC, OCC, and Euroclear, whose governance determines where the listed companies’ profits form.

From Chapter 12: the share of net revenue from transaction and clearing fees at four groups in fiscal 2005, 2015, and 2025. ICE went from 88% to 49%; LSEG from 46% to 32%; Nasdaq’s share was already 18% in 2005 and Deutsche Börse’s about half, and neither changed much.

Part V, Speaking the Language. A glossary of the industry’s terms and a guide to its operating metrics, distinguishing the ones managements emphasize from the ones that matter. A chapter on accounting covers the features that make comparisons difficult: gross versus net revenue (Cboe reports $1.94 of revenue for every $1 it keeps after liquidity payments, regulatory pass-through fees, and index royalties), clearing-member collateral carried on both sides of the balance sheet (CME’s total assets grew from $137bn to $198bn in one year for this reason alone), and the gap between adjusted and GAAP earnings, which ranged from 7% to 76% at the acquisitive groups in FY2025. A chapter on the filings covers the monthly volume releases, which allow transaction revenue to be estimated before it is reported, and the CPMI-IOSCO quantitative disclosures, where the clearinghouses publish their risk figures.

Part VI, Analysis & Valuation. A six-step procedure for analyzing an exchange, which builds the revenue model product by product and normalizes volumes before capitalizing them; twenty years of valuation multiples by type of exchange, against which the sector in August 2026 sits near the middle of its historical range, at a median of 25.1x trailing earnings across eighteen companies; acquisition multiples, which rank assets in the same order as the public market does; and a decomposition of long-run returns into their sources. CME’s return of 19.6% a year since 2002 came in roughly equal parts from per-share revenue growth, a one-time increase in margins, and reinvested dividends, with the change in its multiple contributing only about two points a year. MarketAxess (Nasdaq: MKTX), which ICE agreed in July 2026 to acquire for $167.00 a share in cash, is the chapter’s example of entry price mattering as much as the quality of the franchise.

From Chapter 19: MarketAxess’s revenue, share price, earnings per share, and trailing price-earnings ratio, 2019 to 2025, with ICE’s offer at right. A shareholder who bought at the record close of December 22, 2020, about 75x that year’s earnings, and holds to ICE’s offer loses roughly 20% a year over 5.6 years, although revenue rose every year.

Part VII, The AI Inflection. What can be measured about AI in this industry as of mid-2026. There is no credible public evidence that language models make money as autonomous traders; the development that is real is order entry by software agents, which routes through exchanges rather than around them. Within the exchange operators, AI is used mainly in surveillance, financial-crime detection, and operations; Nasdaq’s Verafin unit is the only AI-related business in the sector with disclosed financials; and the matching engines themselves are largely closed to AI by design. The largest open question is whether consumption of market data by machines will raise or lower its price. The most measurable opportunity is hedging demand from the AI economy: ICE’s US power futures volumes rose 30% in 2025, and CME’s compute futures launch on October 5, 2026.

Part VIII, Risks & Debates. Six ways investors in this industry lose money, each with the indicators that give early warning: clearinghouse losses shared among members (the 2018 default at Nasdaq Clearing consumed €107m of a €166m default fund; in March 2022 the LME canceled every nickel trade executed since midnight); regulation that opens the matching business to competition; long periods of low volatility, and record-year earnings capitalized as if they were permanent; technology failures; acquisitions at multiples of 30x; and the model of clearing without intermediaries that FTX proposed and Hyperliquid now operates offshore. The final chapter sets out the seven main debates of 2026, with the bull and bear case for each: prediction markets, the US Treasury clearing mandate, tokenization, the SEC’s proposal to rescind the trade-through rule at a time when 55.7% of US equity volume already trades off-exchange, same-day options at two-thirds of SPX volume, exchange consolidation in Europe, and the volume booms in India and Hong Kong, including the NSE IPO.

The appendices. The investable universe, roughly 45 listed companies by segment with tickers, listing venues, market capitalizations, and one-line descriptions; a sixty-question due-diligence checklist ordered to match the analytical procedure of Chapter 18; a reading list of books, shareholder letters, interviews, podcasts, and data sources; and the sources for the report.

What the primer is for. A reader who works through it should be able to explain how an exchange group makes money, and why the same activity earns 60–80% margins under one ownership structure and roughly nothing under another; use the industry’s vocabulary, from ADV and RPC to open interest, net capture, and the default waterfall; read the filings without being misled by gross revenue, clearing-member balances, or adjusted earnings; appraise an exchange the way specialists do, product by product, through the cycle, against twenty years of multiples and the acquisition record; and recognize the managers and business models that have compounded value over decades, and the four observable variables that distinguished them.

How to use this primer

The report does not need to be read in order. Suggested paths:

• a generalist with limited time, Parts I and VI plus the checklist in Appendix B;

• a reader interested in the history, Part II with Chapter 13;

• an accountant, Part V;

• an analyst working on a specific company, Chapter 12, then Parts III, V, and VI in order;

• a risk officer, Part VIII with Chapter 17;

• a technologist, Part VII.

Every chapter ends with a “What to remember” box, and the twenty-five boxes read in sequence summarize the report. The checklist follows the order of the analytical procedure in Chapter 18; a company that fails the franchise questions in its first section rarely needs the rest.

Feedback and requests

Please reply to this email or leave a comment with what was useful, what was missing, any errors you find, and the industries you would like covered next. Member requests will inform the order of coverage.

This content is published by MOI Global for educational purposes only. It is not investment advice, an offer, or a solicitation, and no security mentioned herein is recommended for purchase or sale. The publisher and contributors may hold positions in securities discussed. Figures are believed accurate as of the dates stated but are not warranted; readers should verify all data against primary sources before relying on it. Nothing herein constitutes legal, tax, or accounting advice.

This program follows the written primer in fifteen sections. It opens with the toll the industry charges and with what the record of shareholder returns since demutualization shows, including a median of about 16.7 percent a year and a spread of roughly eighty times between the best and worst performers inside one industry. It then works through the life of a single trade and the six places it pays; the four regimes the industry has passed through and what each one proved; what anchors a pool of liquidity, and why some franchises have never been taken while others fell in a year; volume, capture and operating leverage; the three groups of listed companies and the unlisted institutions at the center of the system; the two capital allocation philosophies of Jeffrey Sprecher at Intercontinental Exchange (NYSE: ICE) and Terry Duffy at CME Group (Nasdaq: CME); the accounting that defeats comparison; the sequence a specialist runs on a single name; where the multiples sit, and where entry price rather than franchise quality decided the outcome; where long-run returns actually came from; what is countable in the industry’s newer businesses and what is still narrative; the six ways investors in this industry have lost money; and the due diligence checklist, spoken.

Ten examples are worked aloud, with the inputs stated in order and the arithmetic done one step at a time. They are the life of one E-mini S&P 500 futures trade in dollars; Cboe Global Markets (Cboe: CBOE) from gross revenue to the revenue it keeps; an estimate of a CME quarter built from the monthly volume releases; what a move of twenty percent in volume does to CME’s earnings; a reading of the quarterly clearinghouse disclosures at CME and at LCH; the bridge from ICE’s adjusted earnings to its reported earnings; a sum of the parts for London Stock Exchange Group (LSE: LSEG); MarketAxess (Nasdaq: MKTX) from its record close of $590.32 in December 2020 to the $167.00 a share in cash that ICE agreed to pay in July 2026; a decomposition of CME’s and ICE’s returns since listing; and the ladder of prices paid in past acquisitions.

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This program runs from Amsterdam in 1602 to the prediction markets of 2026, in thirteen sections. It opens on a December afternoon in 2012, when an Atlanta company most people had never heard of agreed to buy the New York Stock Exchange and said on television that it wanted a London futures business rather than the building or the brand. It then goes back to the night the subscription for the Dutch East India Company closed at Dirck van Os’s house in Amsterdam, with the clause in the capital book that made a share transferable; to the London brokers who paid sixpence each in 1773 to rename their coffee house the Stock Exchange; and to the twenty-four brokers who signed seventy-three words under a buttonwood tree on Wall Street in 1792 and fixed a commission that lasted 183 years.

From there the story follows the club as it becomes property and then a public company. It covers the price of a seat on the New York exchange across a century and a half, and Richard Whitney, who bid for United States Steel on the floor during the crash of 1929 and was sentenced nine years later for looting a members’ fund. It covers Leo Melamed, who crossed Siberia as a child on a Japanese transit visa, answered a classified advertisement he took to be from a law firm, and thirty years later put currencies into a futures market. It covers the paperwork crisis that closed the New York exchange every Wednesday for half of 1968 and produced the depository that holds the certificates still; the end of fixed commissions on May Day in 1975 and London’s Big Bang in 1986; the German government bond contract that moved from a London trading floor to a Frankfurt screen in the 1990s; the two professors who noticed that dealers almost never quoted in odd eighths; the eleven days in 2006 in which a seat on a New York commodity exchange turned into about $12 million of stock; the $9 trillion of Lehman Brothers interest rate swaps that a London clearinghouse worked through in 2008; the flash crash of 2010, and the software release that cost Knight Capital more than $400 million in about forty-five minutes in 2012; the night in March 2022 when the London Metal Exchange suspended nickel trading and canceled a day of trades; and the prediction market that was fined for operating without a license, then bought a licensed exchange and clearinghouse, and then took a $1.6 billion investment from the owner of the New York Stock Exchange.

The program runs about an hour and a half. The written primer, a 223-page report, and its companion 53-slide deck are on the Latticework Substack under the title, Industry Primer: Exchanges & Financial Market Infrastructure.

Part Two of the podcast on the industry, the deep dive for professional investors, is available to members.

This audio program is published by MOI Global for educational purposes only. It is not investment advice, an offer, or a solicitation, and no security mentioned herein is recommended for purchase or sale. The publisher and contributors may hold positions in securities discussed. Figures are believed accurate as of the dates stated but are not warranted; listeners should verify all data against primary sources before relying on it. Nothing herein constitutes legal, tax, or accounting advice.

This is the thirteenth issue of This Week in Special Situations, our curated survey of actionable ideas. We do not attempt to profile every special situation. The universe of activist campaigns, buybacks, insider purchases, strategic reviews, and merger arbitrage spreads is vast, and most of it is noise. We filter for situations with a misaligned price or a noteworthy structural reason for market inefficiency.

Over time we will likely narrow this list further. That is where you come in. Please tell us which situations added value to your process and, just as importantly, which were of no consequence. Brutally honest feedback is the most valuable input we can receive. It will shape what we keep and what we cut. Our goal is to make this survey progressively more useful to you.

This week’s report (available as a slide deck) profiles 27 situations across four buckets: activist campaigns, capital return and insider conviction, M&A, and strategic alternatives. Below we highlight the handful that stand out on catalyst clarity, valuation, and asymmetry, followed by thesis summaries covering a broad cross-section of the report.

This publication is provided for informational purposes only and does not constitute investment advice. The information is based on publicly available data and regulatory filings. Errors are not only possible but likely. Readers should conduct their own research.

The Situations That Stand Out

Signet Jewelers (US: SIG) has authorized repurchases equal to ~18% of its market value, holds about $530M of cash against no funded debt, and trades at ~9.1x the midpoint of raised FY27 EPS guidance. The board lifted the remaining authorization to $700M on September 9 and will enter a $125M accelerated share repurchase this month, leaving $575M behind it, though the stock at ~$102 sits well above the ~$85 average paid in the quarter ended August 1. FY27 adjusted EPS guidance rose to $10.45 to $12.15 and adjusted EBITDA guidance to $730M to $800M, putting the enterprise at roughly 4.4x EBITDA net of cash. An early Bread Financial renewal through December 2035 brings $80M of cash this quarter, so the repurchase is covered from cash on hand while the balance of the authorization depends on FY27 FCF.

Lands’ End (US: LE) had $89.2M left on its repurchase authorization at July 31, roughly 28% of its market value, and is buying back at ~0.64x book value. The company retired 910,253 shares at an average of $11.60 in the quarter ended July 31 and kept buying into August, taking the count from 30.0M to 29.5M by September 1. The April 1 sale of a 50% controlling stake in a new Lands’ End brand JV to WHP Global brought in $300M, repaid the $234M term loan, and cut quarterly interest expense from $9.3M a year earlier to $1.0M. The same agreement obliges the company to pay the JV a guaranteed minimum royalty of $50M a year, and with first-half operating cash flow at negative $86.5M, near-term repurchases draw on the ABL.

First REIT of New Jersey (US: FREVS) is one shareholder vote away from liquidating a fourteen-property northern New Jersey and New York portfolio at a management-estimated $24 to $30 per share, as compared to a $22 stock. The August proxy puts the plan to a September 29 special meeting, with a midpoint NAV of about $27 built from roughly $340M of gross asset value, less about $120M of mortgage debt and $20M of liquidation expenses, and JLL opined in May that the range is reasonable. The vote, not the real estate, is the risk: approval needs a majority of the roughly 7.5M shares outstanding, abstentions and broker non-votes count against, and 25% of the register sat in broker non-votes at the August annual meeting, against directors and officers holding 21% who intend to vote in favor.

Medipal Holdings (Japan: 7459) trades at 0.9x book value, and its largest shareholder is using the Companies Act to force shareholder-friendly action. At March 31 it held ¥289B of cash and ¥212B of investment securities against ¥5B of debt, before bank loans funded the ~¥192B PALTAC buy-in in July. Silchester, a 12% holder since 2021, filed an Article 297 demand on September 2 for an EGM by October 30: dismiss director Shuichi Watanabe, let shareholders vote on dividends, pay a ¥122 special dividend, and repurchase up to ¥95B, about 16.5% of the shares. Watanabe drew 61% support in June against 74% to 92% for the others. On September 8 the board named Kuniaki Imagawa president effective October 1 and moved Watanabe to chairman, leaving the dismissal vote and the ¥120B ask live.

Pacific Current Group (Australia: PAC) trades at A$11.10 per share, as compared to the board’s fair-value NAV of A$16.18 per share. On September 7 the board disclosed it had rejected Roc Partners’ cash-and-scrip approach, received in May, because the cash leg came largely from PAC’s own balance sheet; no revised all-cash bid has followed. PAC in turn owns about 30% of Roc, carried at A$60.1M. Flagstaff Partners is advising on three paths: buying Australian manager River Capital for about A$80M in roughly 6.3M escrowed shares at A$13.00, an outright sale, or a delisting and orderly realization. The River deal requires River’s funds to sell their whole ~10M-share stake, about 36% of the register, into a bookbuild first, and approval from shareholders other than River.

Quick Thesis Summaries

The balance of this week’s report, in brief.

• Kobayashi Pharmaceutical (Japan: 4967) — Oasis has lifted its stake to 14% at an average cost of ¥5,472 against a ¥5,700 price, told regulators it intends to add more than five points within three months, and reserved the right to seek the representative director’s removal, a delisting, or a sale of control against a family bloc holding roughly 21%.

• Air Liquide (France: AI) — Elliott holds an undisclosed stake below the 5% AMF disclosure threshold and is pressing a nine-point operating-margin gap to Linde, roughly 21% against 30%, ahead of an October 5 Capital Markets Day at which management must present a new medium-term plan, with the shares back below their pre-report level.

• Xerox (US: XRX) — Starteepo has built a 7% stake at ~$2.40 a share and wants a board-led review of Xerox Financial Services, which it values at $1.3-1.5B, or about $7.70 per share, against a ~$3.17 per-share leveraged equity stub.

• Byrna Technologies (US: BYRN) — Founder and 9.6% holder Bryan Ganz won one of the two board seats he sought, leaving the September 25 annual meeting uncontested, with the stock at $3.63 against a $30.62 52-week high after fiscal Q2 revenue fell 43% to $16M and with inventory alone equal to 36% of the market value.

• QVC Group (US: QVCG) — GoldenTree has taken its post-emergence stake to 19%, buying 830K shares at about $16.30 in the four weeks to September 3, and holds one of eight board seats alongside Oaktree, Silver Point and Strategic Value Partners, with roughly $870M of equity sitting beneath $1.24B of 10% first-lien takeback notes.

• Air Canada (Canada: AC) — A C$800M modified Dutch auction at C$29.00 to C$33.00 expires September 24 with the stock at C$28.25, below the floor, so a full take-up at C$29.00 with proration is the base case and the odd-lot exemption the only clean arbitrage, funded by the C$2.5B sale of a quarter of Aeroplan.

• Telephone and Data Systems (US: TDS) — Having withdrawn its exchange offer for the 18% of Array Digital Infrastructure it does not own, TDS turns back to a repurchase pool of roughly $520M, about 12% of its market value, on a stock whose listed Array stake alone covers roughly 62% of that value.

• GDEV (US: GDEV) — A $20M self-tender at $11.03 for 10% of the shares sits below market, and with the founder and the Bukhman brothers’ vehicle (~78% of the company), declining to participate, a full take-up would absorb roughly half of every other holder’s stock.

• Liberty Latin America (US: LILA) — Director Alfonso de Angoitia paid about $10M for 9% preference shares at a blended $20.96, roughly 16% below their $25 liquidation preference and an 11% yield, while John Malone kept buying the common near $8.50 and added to a preference position now worth $94M at liquidation value.

• United Therapeutics (US: UTHR) — The final ~$480M of a $2B authorization goes into an accelerated repurchase, exhausting the program six months after approval and leaving roughly $3.8B of cash and investments against no debt, with the stock left to trade on 2027 FDA decisions for Tyvaso in IPF and ralinepag.

• Oddity Tech (US: ODD) — The company has retired 20% of its shares this year at an average of $13.93 and repurchased $50M face of its 2030 exchangeable notes for $35M, leaving $87M of authorization against a stock that jumped 29% on results even as Q2 revenue fell 25% on the IL MAKIAGE advertising dislocation.

• Public Financial Holdings (HK: 0626) — Public Bank Berhad’s final HK$2.50 scheme for the 27% it does not own leaves a 14% spread at HK$2.20, roughly 35% annualized on a four-to-five-month completion, but the 10% disinterested-vote blocking threshold means about HK$73M of stock can defeat a deal priced at 0.35x book.

• Gabia (Korea: 079940) — Macquarie’s tender at KRW 48,000 leaves a 13% spread with eight days to the September 17 expiry. The trade depends on the ~3.3M-share minimum, which needs roughly three-quarters of the stock held outside Align’s 14% and Miri Capital’s 24%.

• Dominion Energy (US: D) — Shareholders approved the NextEra merger on September 3 with better than 98% of votes cast in favor, leaving a 4% gross spread on a package worth about $68.63 against a $66.22 stock, with the outcome now resting on a Virginia SCC decision due by January 11, 2027 and a close guided to the second half of 2027.

• MarketAxess (US: MKTX) — ICE’s $167.00 cash offer trades at a 2% gross spread with the HSR waiting period expiring September 25 and completion guided to the first half of 2027, a regulatory carry backed by a reverse termination fee of about $330M.

• WaFd (US: WAFD) — The reverse merger with EverBank leaves WaFd holders 40.8% of a $75B-asset bank guided to 2027 EPS of $4.34 against a $3.37 standalone consensus, at the cost of a 59% sponsor bloc whose shares unlock over twelve months after a 1Q27 close.

• UWM Holdings (US: UWMC) — A $400M rights offering carries a $2.00 subscription floor some 44% above the $1.39 stock, so unless the shares rally before the pricing window closes on November 9, Oaktree and Mat Ishbia’s SFS take the 200M shares under the backstop in what amounts to a controlled recapitalization.

• Samhällsbyggnadsbolaget i Norden (Sweden: SBB B) — Registry clearance sets completion of the SEK 6.8B residential sale to KlaraBo for September 23 and redemption of Morgan Stanley’s SEK 2.4B of 13% preference shares by September 30, a dated deleveraging step for a stock at 0.39x long-term NAV with 54% LTV.

• ASA Gold and Precious Metals (US: ASA) — The Saba-installed board voted on September 4 to convert this gold closed-end fund into a Saba-managed credit BDC with no tender at NAV, so holders buying at an 18% discount are betting the conversion vote narrows the gap rather than swapping gold exposure for BDC fees.

• Team Internet Group (UK: TIG) — The board reaffirmed on September 7 that its Domains, Identity and Software division should fetch materially more than $160M, about 116% of the £102M market value, with a deal targeted for around year-end and about $118M of net debt deciding how much of it reaches shareholders.

• MSG Sports (US: MSGS) — An amendment to the Rangers Form 10 fixes an end-of-October target, leaving the consolidated equity near $390 per share, as compared to roughly $570 per share implied by the latest Forbes marks for the two franchises, a discount of close to 30%.

• Resonac Holdings (Japan: 4004) — Resonac distributes 81% of petrochemical unit Crasus Chemical on October 1 through a September 29 direct listing, and because Nikkei Inc. adds Crasus to the Nikkei 225 for the listing day only and deletes it the next, index funds must sell the stub within a single session.

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• Ideaweek 2027 (FULLY BOOKED), St. Moritz (Feb. 1-4, 2027)

• The Zurich Project 2027 (COMING SOON) (Jun. 1-3, 2027)

Murray Stahl grew up in Bedford-Stuyvesant, in a household that spoke Yiddish and Russian. He went to Brooklyn College and joined Bankers Trust in 1978. He stayed sixteen years, working up investment strategies off the beaten path. He and Steven Bregman left the bank in the fall of 1994 to start Horizon Asset Management. Kinetics followed in 1996 and FRMO in 2001. He wrote with a ball point pen to slow his writing. He died on April 7, 2026.

On his account, the indexes behind ETFs changed their calculation around 2006, from market cap to float, the shares in public hands. The index is price indifferent, with no price at which it stops buying. On a call in October 2016 he described what he looked for: “For us, a true alternative asset is a rare company that’s not likely to access the capital markets. Therefore, in the long run, the behavioral characteristics will be based on a certain scarcity value. That’s kind of what we’re looking for, scarcity value of a hard asset, encased in scarcity value of corporate structure.”

An owner-operator, he said in 2018, is a company whose leaders own more equity than anyone else. Dormant assets, he said in October 2015, are potentially productive but dormant at the moment. Spin-offs he compared to expelling the worst student from a class: the average grade goes up, but the average student learned no more. The opportunity was with the parent. In late 2007 he launched a fund to own securities exchanges. In 2008 he could not find a single person who agreed with him. One royalty company he worked through had more reserves in its 2021 annual report than thirty years earlier.

The program opens at the Best Ideas conference in January 2018. Near the end of that talk he said he had owned one stock since 1984 and bought more that day in his own account. It goes back to 1984, when he turned the wrong way out of a downtown elevator and read an unfamiliar name off a door. It follows the business plan he and Bregman made at a Burger King table in 1994, which put a ceiling on assets. In 2008 every investment he touched did poorly, and he did not blame his own analysis. It quotes the July 2010 letter telling shareholders he had begun designing indexes of his own. Its last section covers the quarterly call of March 3, 2026, on which he answered what he most regretted.

He spoke at MOI Global’s Best Ideas conference in January 2018 and at the Latticework summit in September 2018. At Best Ideas he said he could not run a diversified portfolio and worked through Texas Pacific Land Trust. At Latticework he named companies one at a time, with his reasons for each, and withdrew the timing call he had made in April 2016. For more, see Replay of a Fireside Chat with the Legendary Investor at Latticework 2018.

The program runs sixty-nine minutes.

Get the next program the day it comes out. The Great Investors podcast is on Apple, Spotify, and YouTube. Subscribe there, or add the feed to any app.

Ideas from our Weekly Inspiration newsletter

We highlight a few stock write-ups from the latest Weekly Inspiration:

Alphabet (GOOGL) now ships two custom AI accelerators a year rather than one, an inference-optimized eighth-generation TPU and a training-optimized sibling, because the workloads have diverged too far to serve with a single design. Tae Kim’s distillation of the Hot Chips presentation is the clearest public account of what that buys. The inference chip carries 384 megabytes of SRAM, double the previous interconnect bandwidth, and performs collective operations inside the IO die rather than reaching across the package, which cuts on-chip latency by 5x and fixes the main deficiency of the prior generation in serving mixture-of-experts models. The training chip runs on a new Virgo fabric that links 134,400 chips in a single non-blocking domain, and customers are already training frontier models on tens of the prior generation’s 9,216-chip super pods. At ~17x trailing earnings the valuation looks undemanding for vertically integrated AI infrastructure, though capital spending compresses the free cash flow yield to 1.3%.

HAL Trust (Amsterdam: HAL) is a family-controlled Dutch holding company whose stated net asset value of EUR 180 per share understates what the assets are worth, by construction rather than by accident. The largest piece is Boskalis, the world’s largest non-Chinese dredger, carried at EUR 5.3 billion, or 6.8x average 2024 and 2025 earnings, against 14x at listed peer DEME; Andrew Brown of East 72 marks it at 6x EV/EBITDA for roughly EUR 8 billion of equity, a EUR 2.7 billion uplift on the carrying value. Vopak sits at 7x proportional EBITDA against 9-10x in comparable transactions. His sum of the parts comes to EUR 228 per share, trimmed ~6% from EUR 242 after a soft half at Boskalis, where EBITDA fell 26% to EUR 553 million on thin salvage work and slow Middle East contracting. Against EUR 161 shares that is a ~30% discount, on a portfolio compounding at 15.5% a year since 2002, and every divestment so far has cleared book value comfortably. He owns the shares.

Universal Music Group (Amsterdam: UMG) trades at EUR 14.24, roughly half the EUR 27.50 at which Vincent Bolloré’s Odet sold its own stake, having bought in at EUR 18 to EUR 19. Jeremy reads that exit price as the controlling shareholder’s own estimate of the asset, and reads Pershing Square’s full sell-down as a removal of distraction rather than a verdict. The case rests on capital allocation now getting the Bolloré treatment: 3.1% of the shares have been retired in 2026 under a second EUR 250 million program, and the remaining Spotify holding, now ~20% above the price used in the interim accounts, is plainly saleable, with half of it capable of retiring another 4.58% of the count at EUR 15. A 4.4% FCF on 6% revenue growth implies a 10.4% total yield on a catalogue whose useful life runs far past its 20-year amortization, with the caveat that three customers account for 42% of sales. He holds no position in UMG itself, owning the wider Bolloré complex instead.

As always, the above theses reflect the linked authors’ views (available here), not Latticework recommendations.

Articles worth your time

The Missing Calculation in the AI Data Center Boom, by Mallika Paulraj, argues that investors modeling data center demand are leaving out how fast the compute required per query is falling. Two specifics carry the piece. Velaura’s Titan Core attacks arithmetic operations, which consume 40% to 70% of XPU power, and claims up to a 50% reduction in consumption. TensorMesh’s KV caching reuses stored context and cuts inference compute costs 80% to 95% on repeated or shared queries. She is careful about where the argument stops: Amdahl’s Law limits how much component-level efficiency turns into proportional infrastructure savings, and the effect is less that demand collapses than that the moat migrates from silicon toward software. Read it against the capex assumptions embedded in current valuations.

The Scaling versus Profitability Trade-off: Venture Capital’s Weakest Link!, by Aswath Damodaran of NYU Stern, takes apart the choice between growing fast and earning money that sits under every valuation of a young, cash-burning company. He identifies six determinants of whether a business can actually scale: market size, market growth, industry structure, capital intensity, customer inertia, and dependence on a key person. Founders trade ownership and control for scale, and staying small preserves both while capping the addressable market, which makes the decision a genuine trade rather than a failure of ambition. His sharpest observation is that market definition is itself strategic: describing Uber as logistics rather than as a car service tripled the market it was valued against, without changing anything the company did.

SaaSpocalyse No, by Harvey Sawikin of Firebird Management, treats February’s software crash as a test of whether the market prices differentiation when it is under stress. It did not. Selling ran sector-wide and indiscriminate, and Via Transportation fell 35% despite economics that are not SaaS economics at all, then rebounded 83%. On the other side, Robinhood margin balances reached $17.5 billion in February, up 98% year over year, and $19.5 billion by May, so the leveraged retail dip-buyers were directionally right and structurally fragile at the same time. He also flags the “Texas hedge,” long AI and short software, which concentrates risk rather than offsetting it in exactly the moment correlations reverse violently.

The Smartest Money, by Amos Lawrence of Verdad, finds that aggregate net equity issuance has predicted forward returns at both the market and the sector level. Issuance peaked at $1.5 trillion in 2000 and again in 2021, and the S&P 500 fell 12% and 18% respectively over the year that followed each peak. Today biotech and pharmaceuticals and industrials sit in the top issuance tercile, while communication services and staples sit in the lowest. He is honest about the noise in it: REIT distribution mandates, funding constraints during crises, and genuine capital-spending opportunities all push issuance around for reasons that have nothing to do with managements timing their own stock.

The deck

The 126-page Monday Morning Briefing is available to members. It spans our weekly scoreboard, idea-generation screens, market valuation and positioning, macro and fixed income, and equity valuation screens across international markets (Canada, the UK, Germany, Australia, Japan, Korea, India and Sweden, alongside a cross-country P/E table and European REIT discounts to net tangible assets). We welcome your feedback.

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Featured Events

• Latticework 2026, Chicago, Illinois (Nov. 10-11, 2026)

• Ideaweek 2027 (FULLY BOOKED), St. Moritz (Feb. 1-4, 2027)

• The Zurich Project 2027 (COMING SOON) (Jun. 1-3, 2027)

Meet great investors and fellow lifelong learners at Latticework 2026.

Hear this week’s highlights:

11 Articles We Are Reading This Week

1. Oil in salt domes - Brian Potter

2. Agent civilizations - Dwarkesh Patel

3. IPO housing effect - Byrne Hobart

4. AI data center math - Mallika Paulraj

5. Knightian uncertainty - Richard Ngo

6. Incumbents are coming - Seema Amble

7. Warped time perception - Mike Mariani

8. Scaling versus profitability - Aswath Damodaran

9. SaaS and the reckless crowd - Harvey Sawikin

10. Learning that feels like learning - Jack Despain Zhou

11. Share issuance as a timing signal - Amos Lawrence

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Letters, Presentations, Writeups…

Industry Insights: artificial intelligence | banking | commodities | cybersecurity | rare earths | semiconductors | shipping | software

Geographic Insights: Australia | China | Europe | Ireland | Poland

Letters: Crossroads | Greenhaven Road | J.P. Morgan | Maestria

Company Insights: Alphabet | HAL Trust | Oxford Metrics | UMG | WEAT

Company Slides: Bakkafrost | Bunzl | Dell | Fortuna Mining | HP Enterprise | Medtronic | Samsara | Sasol | SAIC | Swiss Life | Victoria’s Secret | Wiley

5 Videos We Are Watching This Week

1. a16z - Ben Horowitz on chips, power and the layer beneath the models

2. Forbes - David Booth on why public markets still beat the alternatives

3. Semafor - Blackstone’s Jon Gray on big bets and staying skeptical of AI

4. Goldman Sachs - On who supplies the power as token use keeps rising

5. Oxbow Advisors - Dan Rasmussen on markets and where the odds sit

5 Podcasts We Are Listening to This Week

1. Acquirers - Matt Sweeney on patience as the one durable edge left

2. In Good Company - Deere CEO on tractors and farming in the AI era

3. Invest Like the Best - Sarah Guo on compute in fragile supply chains

4. Bogumil Baranowski - Paul Johnson on the false value-growth divide

5. Conversations with Tyler - Michael Moritz on exile and the obsessed

If Weekly Inspiration is worth your time, it is probably worth a colleague’s. Share it with them — referrals earn complimentary months of paid access.

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This is the twelfth issue of This Week in Special Situations, our curated survey of actionable ideas. We do not attempt to profile every special situation. The universe of activist campaigns, buybacks, insider purchases, strategic reviews, and merger arbitrage spreads is vast, and most of it is noise. We filter for situations with a misaligned price or a noteworthy structural reason for market inefficiency.

Over time we will likely narrow this list further. That is where you come in. Please tell us which situations added value to your process and, just as importantly, which were of no consequence. Brutally honest feedback is the most valuable input we can receive. It will shape what we keep and what we cut. Our goal is to make this survey progressively more useful to you.

This week’s report (available as a slide deck) profiles 31 situations across four buckets: activist campaigns, capital return and insider conviction, M&A, and strategic alternatives. Below we highlight the handful that stand out on catalyst clarity, valuation, and asymmetry, followed by thesis summaries covering a broad cross-section of the report.

This publication is provided for informational purposes only and does not constitute investment advice. The information is based on publicly available data and regulatory filings. Errors are not only possible but likely. Readers should conduct their own research.

The Situations That Stand Out

Abercrombie & Fitch (US: ANF) has roughly $570M left on an authorization worth 10% of its market cap. It repurchased 3.2M shares for ~$280M year to date at an average near $88 against a ~$137 close, and lifted the full-year target to at least $500M. The 7% reduction is gross: equity-plan issuance takes the net decline to 5.6%, from 45.0M shares to ~42.5M. Buybacks outrun internal cash: ~$180M of year-to-date FCF against ~$290M spent, with cash down from ~$760M to ~$630M. Guidance of $13.10 to $13.60 carries about $2.10 of one-time tariff refund, so the stock sits at 12x underlying earnings on flat second-quarter comparable sales.

NCC Group (UK: NCC) is retiring 41% of its share capital in a tender, leaving a net-cash cyber security pure play. The offer closed on 1 September at 145p, taking ~117M shares for £170M, cutting issued capital to ~167M shares with none held in treasury. Holders applied for 54% of the register; tenders above guaranteed entitlements were scaled back 57%. The cash came from May’s sale of Escode at a £275M enterprise value, and with ~£60M of net cash left against committed facilities cut to £30M, the retirement added no leverage. A £15M buyback, 6% of the post-tender market cap, starts shortly with the stock at 141p, below the 145p tender price, and the directors committed not to tender a single share.

JOYY (US: JOYY) trades at roughly $0.6B of enterprise value against $3.1B of net cash, and has returned close to 10% of its market cap in under eight months. Net cash was ~$3.06B at June 30 against 49M ADSs at $74.56, pricing the operating business at ~$0.59B, or 0.26x TTM revenue of $2.27B. It returned ~$360M between January 1 and August 21, with ~$470M of buyback capacity left and a $1.55 per ADS dividend going ex September 30 for an 8% yield, inside a $1.5B program running through 2028. The constraint is that this is balance-sheet funded, not operational: first-half operating cash flow was ~$110M while net cash fell ~$200M, and co-founder David Xueling Li, who left the chairman and CEO roles in 2024, still controls 87% of the votes on a 36% stake.

PagSeguro Digital (US: PAGS) has committed roughly 20% of its market capitalization to a new buyback and a first multi-year dividend floor, in a stock trading below book value. The September 1 6-K authorizes up to US$150M of Class A repurchases with no expiration and targets at least R$2.0B of dividends across 2027 and 2028, about US$390M or a 7% annual yield on the US$2.71B market cap, with the buyback adding 5%. Because only Class A is eligible, that US$150M retires 10% of the ~155M Class A shares and lifts UOL from 45% toward 48% of the economics, while its Class B carries 89% of the votes. Cutting the other way, Ricardo Dutra sold 124,160 Class A shares in July outside a 10b5-1 plan, a quarter of his holding, and founder Luis Frias resigned as chairman on August 21.

HF Sinclair (US: DINO) authorized a fresh $1.5B buyback worth 8% of its market cap three weeks after the family seller that absorbed the last one ran down to its 5% floor. The August 26 8-K replaced a program with ~$11M left, drained by one negotiated block: ~$210M for ~2.4M shares from REH Advisors at $89.41, agreed August 2, now a 16% discount to the current price. REH’s residual is ~8.9M shares, 5.1%, against the 27% it took at the 2022 Sinclair closing, and it intends to hold enough to keep the board-designation right that lapses below 5%. Trailing FCF of ~$2.3B covers $366M of dividends comfortably, and the prior $1.0B program took 27 months to spend while $463M went out in the last seven.

Quick Thesis Summaries

Beyond the five above, the report covers the following situations.

• Vodafone Group (UK: VOD) — Xavier Niel’s Vega SAS filed a 13D on 9.9% of the voting rights plus contracted forwards taking the economic interest to 19.8%, sourced largely from e&’s entire 17% block bought at 110.5p against 119p today, with everything above the 9.9% cap forced into cash settlement if clearances slip past the 2027 maturities.

• Korea Zinc (Korea: 010130) — The September 9 extraordinary meeting turns on a charter amendment and an audit-committee seat where Korea’s 3% rule caps MBK and Young Poong’s 42% bloc, chairman Choi’s 18% and the National Pension Service alike, leaving retail and foreign holders to decide it, with seven of eight proxy advisers behind the board’s nominee.

• Gore Street Energy Storage Fund (UK: GSF) — Saba Capital’s 18% position, only 6% of it in registered shares and the rest in a swap expiring in December, has forced discontinuation and wind-up resolutions onto the September 16 AGM, putting a hard date against a 36% discount to a NAV that fell 27% in the year to March.

• Ain Holdings (Japan: 9627) — The board set its new takeover-response trigger at exactly Oasis Management’s 22% stake, so one further share starts a 60 business day disclosure clock and a board evaluation window, and the filing reserves the right to fire the warrant countermeasure without a shareholder vote.

• GungHo Online Entertainment (Japan: 3765) — Strategic Capital holds 14% and now demands the removal of a representative director, but the day after that filing Taizo Son’s vehicle agreed to sell its entire 23% block to Sony Music at ¥2,385, below the market price and with no offer to minorities, handing the activist an entrenched counterparty.

• Kusuri No Aoki Holdings (Japan: 3549) — Oasis lifted its stake to 15% at an average cost near ¥3,097 against ¥4,046 now and rewrote its filing purpose to name dismissal of the representative director, days after president Hironori Aoki was re-elected on 65% support, with a ¥24B buyback authorization expiring in December still entirely unused.

• Solstice Advanced Materials (US: SOLS) — The company walked away from its $14B purchase of Element Solutions with no break fee in either direction and replaced it with a first-ever $500M buyback, while the shares still trade 24% below their pre-deal price.

• Workday (US: WDAY) — A new $4.0B open-ended Class A authorization equals 8% of the market cap and follows a half-year in which 82% of gross repurchases genuinely stuck, cutting the count 7% to ~241M, though the buying ran at 2.7x first-half FCF and averaged ~$133 against a ~$201 close.

• Frontline (US: FRO) — The board declared a $2.61 quarterly dividend, 6% of the market cap in one quarter, but that figure matches Q2 adjusted EPS to the cent under a 100%-of-profit formula rather than a floor, and the additional $0.80 of vessel-sale proceeds is a board determination with no declared record date.

• CANCOM (Germany: COK) — A €30M buyback covering 4.7% of the market cap runs from September 7 to year end, with the stock about 11% below the €25.05 average the company paid completing its last programme early, though first-half operating cash outflow of ~€110M took cash down to ~€22M by June 30.

• Tohokushinsha Film (Japan: 2329) — A single ¥9.75B off-auction cross retired 14% of the share count and took Hisako Uemura from 53% to 11%, handing the top of the register to activist 3D at 22% without it buying a share, though the securities portfolio backing the balance sheet was largely spent on an acquisition that added ¥23B of goodwill.

• Sanyo Shokai (Japan: 8011) — The board authorized ¥5.81B of buybacks on August 28 and filled the entire authorization three days later in one pre-market crossing, taking 9% of the shares for ¥4.56B, hours after cutting interim guidance to a recurring loss, with Asset Value Investors now the largest holder at 12%.

• Prudential (UK: PRU) — Half-year results added about $0.3B to the $1.2B 2026 buyback, funded by that morning’s ICICI Prudential AMC stake sale, taking planned 2026 and 2027 returns to $2.8B or 8% of the market cap, though completing by December 18 requires roughly a 40% step-up on the first-half pace.

• Mitsui & Co. (Japan: 8031) — Month one of the ¥200B buyback delivered ¥11.25B, under a third of the run rate needed to finish by January 29, but the identical ¥200B programme it replaces ran at ¥37B to ¥45B a month and hit its cap ten days early in March, with all ~41M shares cancelled.

• Caesars Entertainment (US: CZR) — The proxy sets a September 22 vote on Fertitta’s $31.00 cash offer against a $29.69 close, and the question is now the antitrust clock after Fertitta pulled and refiled its HSR notification on August 13 in connection with FTC discussions, resetting the waiting period to September 14.

• Perfect Corp. (US: PERF) — Founder Alice Chang is taking the company private at $2.00 cash funded from Perfect’s own balance sheet, leaving a 5% spread into an October 19 meeting, with the real gate a walk-right for the buyer if holders of more than 8% of shares validly dissent under Cayman law rather than any regulatory condition.

• AtaiBeckley (US: ATAI) — At $7.35 against Eli Lilly’s $6.75 cash floor the market pays $0.60 for a non-tradable CVR with $2.50 of face, roughly a quarter of maximum value and 31% below Centerview’s own $0.87 risk-adjusted mark, with the vote on September 8 and only the Australian waiting period left to run.

• Gabia (Korea: 079940) — Macquarie’s DCK Investment is tendering at KRW 48,000 against KRW 44,650, an 8% spread into a September 17 expiry, but two blockholders at 24% and 14% can defeat the 50% minimum outright, and Align Partners is running a competing proxy campaign to an October 8 meeting.

• Genel Energy (UK: GENL) — DNO must table a firm bid by 5.00pm on September 4 or stand down for six months, and at 63p the shares sit 9% below the rejected 69p indication with net cash alone worth 30p a share, though a concert party at 25% and a bank at 19% can block both a scheme and a squeeze-out.

• Irish Continental Group (Ireland: ICG) — The independent board adjourned the August 28 scheme meetings after proxies showed the €8.00 management buyout failing the 75% test. As the adjournment ran under 14 days, the voting record stays at August 24, so arbitrageurs who bought in since then cannot vote on September 10.

• H&R Real Estate Investment Trust (Canada: HR.UN) — The C$4.28 cash plus 0.5688 GO Residential units marks at C$10.82 against C$9.89, a 9% spread into an October vote, but only the cash leg is fixed and the unit leg has fallen 15% since announcement, with distributions switched off through year end so the spread is the entire return.

• Gran Tierra Energy (US: GTE) — The $1.33B sale of the Colombian and Ecuadorian business to Maurel & Prom takes essentially all the debt with it and leaves roughly $8.67 per share of cash and notes against a $10.19 price, implying the market values the retained Canada and Azerbaijan stub at about $58M on a business that loses money.

• Braskem (Brazil: BAK) — A São Paulo court cleared the US$11B extrajudicial reorg for processing on August 28 with 90 days to lift creditor adhesion above 50%, and the filed plan’s own parameters put interest capitalization, a shareholder equity backstop and possible equitization on the table.

• Greenfire Resources (Canada: GFR) — A C$775M rights offering priced 21% below market expires on September 15, and while lapsing costs a non-participant only about 10% of value that is fully recoverable by selling the rights, the 72% holder absorbs every unsubscribed share at that discount without a standby fee, taking it toward 85%.

• Apollo Commercial Real Estate Finance (US: ARI) — The proxy fixes the dissolution vote for September 29, putting a $3.70 to $4.00 cash distribution about 30 days behind approval, so a buyer at $6.86 recovers roughly $3.85 within a month and holds a $3.01 stub against a $3.75 to $4.80 residual estimate in non-transferable trust interests.

• Taylor Maritime (UK: TMIP) — The September 1 sale of three handysize bulkers for $48.6M, about 3% above book, cuts the fleet to two ships and leaves the stock at a 13% discount to NAV, though the buyer of one vessel and 51% of the other is a vehicle controlled by the CEO and no shareholder vote is required.

The deck is available to members (scroll up to download, or sign up below).

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Featured Events

• Latticework 2026, Chicago, Illinois (Nov. 10-11, 2026)

• Ideaweek 2027 (FULLY BOOKED), St. Moritz (Feb. 1-4, 2027)

• The Zurich Project 2027 (COMING SOON) (Jun. 1-3, 2027)

Howard Marks has spent more than half a century on a problem he says he still has not solved: what risk actually is, and what an investor can do about it. His career runs from equity research in the late 1960s, through the launch of Citibank’s convertible and high-yield bond funds in 1978, into distressed debt in 1988, and on to the firm he co-founded in 1995. Through all of it he has written memos to anyone willing to read him.

One of the recurring lessons in Howard’s work is that knowing where a market is going and knowing where it stands are entirely different problems, and only the second one is solvable. He is unusually willing to say so plainly. Asked at a Latticework summit what he was still curious about, he named the subject he is best known for: “In investing, the greatest puzzle for me is risk, how we should think about it, and how we can work with it.”

That idea runs through this audio program. It traces Howard’s early years as an analyst and the three lessons he took from them; the 1978 telephone call that sent him into a market with a bad name and no data; the first memo he ever published, in October 1990, written five years before Oaktree existed and already containing the sentence the firm would be built on; the decade he wrote without receiving virtually a single reply; the memo he published three days after Lehman failed; and the argument with his son Andrew that revised part of his own framework fifty years into his career.

We are grateful to Howard for the wisdom and insights he has shared with the MOI Global community over the years, at Latticework summits, at Best Ideas, and in conversation during the crisis of 2020. He has spoken with unusual candor about what cannot be known, about the difference between controlling risk and avoiding it, and about the discipline of daring to look wrong for as long as it takes to be proved right.

Our hope is that this special episode, Howard Marks: Higher-Level Thinking, will help more investors appreciate the depth of Howard’s approach. It is a program about risk, but also about writing, temperament, and the willingness to keep an important question open for fifty years rather than pretend it has been settled.

For those willing to think at the second level, the lesson is not that the future can be read. It is that knowing where you stand, and sizing your positions accordingly, remains one of the investor’s most durable advantages.

Ideas from our Weekly Inspiration newsletter

We highlight a few stock write-ups from the latest Weekly Inspiration:

NVIDIA (NVDA) doubled July-quarter revenue to $96.2 billion and guided fiscal 2028 growth to roughly 70% against consensus near 45%, and management described even that as a supply-constrained outlook. Customer forecasts showed demand doubling; the company can only grow 70% because there are not enough components. Tae Kim’s point is that this is the third consecutive year the peak-year thesis has been wrong. Supplier commitments rose from $119 billion to $279 billion, mostly memory, and the guidance assumes no data-center revenue from China at all. Rising content per gigawatt, the Vera Rubin ramp and record capital returns carry the rest of the case. At ~33x trailing earnings the multiple compresses quickly if the guidance holds; gross-margin pressure into the low 70s from memory procurement is the near-term watch item.

Intuit (INTU) has retreated from an unrealistic 20% growth aspiration, will now include stock-based compensation in its non-GAAP figures, and has begun disclosing Mailchimp’s results properly. Dede Eyesan reads all three as management becoming accountable for past capital allocation rather than as bad news. FY26 beat his cost estimates despite restructuring, mid-market growth ran 28%, and QuickBooks pricing supports a path near a 12% revenue CAGR that gets to a 20% IRR without needing 20% growth. The live risk is TurboTax’s do-it-yourself tier, which faces intensifying price competition. At ~22x trailing earnings and a 7.9% free cash flow yield, the valuation looks undemanding for the franchise.

Cal-Maine Foods (CALM) is the largest egg producer in the United States, with roughly twice the laying hens of its nearest competitor and net cash equal to ~20% of market capitalization. The stock is down ~27% over the past year, coming off the previous cycle peak, and the case is mean reversion rather than growth. Value Don’t Lie notes the shares have consistently traded near 2.1x book value over twenty years and sit well below that median today, at the low end of the historic range while the industry approaches a cycle bottom. Egg demand is stable across decades; the violence is all on the supply side, where avian flu and producer behavior swing prices. The balance sheet funds buybacks, a variable dividend and a push into prepared foods, and an 8.7% free cash flow yield pays for the wait.

Power Solutions International (PSIX) has replaced the CEO whose conduct kept many investors away, hiring Richard Hu, most recently head of BorgWarner’s Americas business. “Guasty Winds” has followed the company for years, owned it on the pink sheets and visited both Wisconsin plants, and argues its problems were never about demand. They were operational, which is what a Tier 1 automotive supply executive is trained to fix, in a business where operating efficiency and quality control decide survival. Q2 gross margin of 27% revealed the latent earnings power, the balance sheet is approaching net cash, and the shares trade at ~12x trailing earnings and under 10x EV/EBITDA. Investor communication remains poor and fixing it is the open question; with better disclosure and a 2027 reacceleration, FCF above $100 million looks attainable.

EVT Limited (Australia: EVT) owns Australia’s largest cinema chain, its second-largest hotel group and its largest ski fields, and management has now committed to divesting A$800 million of non-core property. The prize is the corner of George and Market Streets in Sydney, which carries development approvals along with the State Theatre and the QT Hotel structure, and which Andrew Brown of East 72 thinks could exceed A$320 million on its own. Rothschild has been engaged to assess the group structure, and CEO Jane Hastings says there are no sacred cows. He values the group at A$16.50 to A$22.25 per share against A$15.09, with A$1.04 per share of franking credits available to fund special dividends. Cinema EBITDA rose 46% on 48 fewer average screens, which is the segment the market had written off. He owns the shares.

As always, the above theses reflect the linked authors’ views (available here), not Latticework recommendations.

From last week’s member call

Our fourth bi-monthly member call drew participants from Uruguay to Singapore, and one question ran through most of the contributions: the AI capital-expenditure wave is real, but it lands in reported numbers in a way that flatters the sellers today and may flatter no one later. Members offered ways to align with the trend without overpaying, alongside ideas well away from the AI trade.

The full recap is in Sartorius, Copper, and the S&P 500 Margin Mirage.

Articles worth your time

If this is true, the hyperscalers are toast, by Joachim Klement, takes Stanford research on small language models and follows it to an uncomfortable conclusion for data-center capital spending. The research finds small models running on local hardware tie or beat cloud LLMs in 98.6% of chat requests and 62.5% of reasoning tasks, while consuming 50% to 85% less energy, with inference per watt running roughly seven times higher. If most of what people actually ask a model can be answered on a laptop, the demand curve underwriting hyperscaler capex and Nvidia’s margins looks different. Klement is careful about where the argument stops: LLMs keep their advantage in agentic work and the hardest reasoning, where small models succeeded 51.5% of the time at the top difficulty level. Read it against this week’s NVIDIA write-up, which reaches the opposite conclusion from the demand side.

Paying for Information (In Reverse), by Harvey Sawikin of Firebird Management, offers a small mechanical fix for the anchoring that stops investors buying a stock which has already run. The maxim comes from his late co-founder Brom Keifetz, a poker player: you have to get comfortable with paying for information. In investing it applies in reverse, because the information you wanted arrives only after the price has moved. His remedy is a starter position of 0.10%, small enough to cost nothing, which reframes every later purchase as adding to a winner rather than chasing one. The same trick eases exits, since trimming first makes it psychologically easier to sell a deteriorating former winner in full. Stanley Druckenmiller’s Soros-derived rule, invest and then investigate, achieves the same effect at a far larger initial size.

Winds of Thematic Change, by Moses Sternstein, shows the data-center build arriving in places and at prices that do not look like a technology story at all. Data centers account for ~60% of private non-residential construction in New Mexico and Wyoming, and 30% in Pennsylvania. The Dallas Fed reports data-center projects paying concrete workers $45 an hour against a $28 to $32 prevailing wage, a 50% premium that lands in every other local builder’s cost base. On the flows side, thematic ETF money has rotated out of clean energy and into AI, nuclear and defense. He also notes that Uber’s average and median fares have risen ~20% since 2024 on platform fees, with Lyft running 24% cheaper. Three of his charts are reproduced in this week’s deck.

New in this week’s deck

This week’s deck adds charts on flows, ownership and the arithmetic sitting behind some familiar headline numbers.

• ETF flows brings three charts on the exchange-traded fund bid: net inflows running ~$600 billion ahead of 2025’s record pace, July’s all-time monthly record of $346 billion, and the rotation of thematic money out of clean energy and into AI, defense and nuclear.

• Top 10 weight in the S&P 500 sets the largest ten constituents’ share of index market value against their share of trailing earnings, so the concentration debate has a denominator.

• Who owns the US stock market splits Fed Financial Accounts data into households, funds and foreign investors, and shows that every point the fund complex has added in thirty years is ETFs.

• Where the federal dollar comes from, and where it goes lays out receipts by source against outlays by function for the fiscal year to date, with the borrowing gap and net interest called out.

• Share of world GDP versus share of world equity market value puts each country’s slice of global output beside its slice of global market capitalization.

The deck

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Meet great investors and fellow lifelong learners at Latticework 2026.

11 Articles We Are Reading This Week

1. Hyperscalers - Joachim Klement

2. Turbulent AI era - Bill Gates

3. Lakers investment - Andrew Walker

4. AI economics winners - Rohit Krishnan

5. Medical oracle problem - Bobby Samuels

6. Autonomy and innovation - Ben Thompson

7. Winds of thematic change - Moses Sternstein

8. Homer on moral excellence - Stephen Pimentel

9. Capitalizing untethered agents - Tyler Cowen

10. Advertising platforms and antitrust - Byrne Hobart

11. Paying up for information in reverse - Harvey Sawikin

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Letters, Presentations, Writeups…

Industry Insights: ai | banking | gaming | ice | robotaxis | software

Geographic Insights: China | Germany | Indonesia | Japan | UK | US

Letters: Alluvial | Desert Lion | McElvaine | Pender | Southeastern

Company Insights: Cal-Maine Foods | EVT | Intuit | Moderna | Nvidia | Planet Fitness | Power Solutions | ServiceNow | Walmart | Watkin Jones

Company Slides: Aroundtown | Bilibili | CIBC | HP | Insmed | Kohl’s | Marvell | Okta | Pernod Ricard | RBC | Salesforce | Silvercorp Metals

5 Videos We Are Watching This Week

1. Norges - Paul Marshall on why markets keep getting more competitive

2. Livewire - Vihari Ross on concentration risk and the crowded AI trade

3. Josh Zolin - Robert Cialdini on influence without manipulating people

4. Business Brew - Bob Robotti on how to think about cyclical industries

5. Oxbow Advisors - Dan Rasmussen on private markets and public risk

5 Podcasts We Are Listening to This Week

1. How I AI - Ryan Carson on managing 15 AI agents as a solo operator

2. Acquirers - Chris Mayer on what he found in all the 100-bagger stocks

3. Dwarkesh - Dylan Patel on who will own the world's compute by 2028

4. How I Write - Matt Haig on writing books that millions of people read

5. Masters in Business - Alex Morris on Buffett and Munger, unscripted

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Thesis summary:

StandardAero is the largest independent aerospace engine aftermarket (MRO) services provider, with 100+ years across 50+ sites. An advantaged compounder, it serves about 5,000 customers, books over 77% of revenue under long-term agreements, and holds #1 or #2 positions on platforms representing 80% of revenue. Exclusive or semi-exclusive OEM licenses make it North America’s only independent provider on several platforms.

The moat rests on government certifications, OEM authorizations, and the multi-year upfront investment a provider must commit alongside OEMs like Safran and GE before a platform earns a return. Aman notes ROCE recently sat in the high single digits, near its cost of capital, held down by investments now ramping. Engine Services runs 14-15% EBITDA margins; higher-margin Component Repair, a tenth of revenue but a quarter of EBITDA, nears 29%. Markets are ~60% commercial, ~20% business aviation, ~20% military.

Aman sees a multi-year upcycle from pent-up maintenance, constrained OE capacity, an aging fleet (now near 15 years, up from under 10 a decade ago), and rising outsourcing. The centerpiece is the LEAP engine, sole-source on the 737 MAX with lead share on the A320/A321neo. SARO is the first independent LEAP provider in the Americas, one of seven globally, with 11,000 engines installed and 12,900 in backlog. Management guides LEAP revenue from just over $100M in 2025 toward $1B by decade’s end.

In military and business aviation, SARO holds 80% of OEM-directed MRO on the AE1107 and AE2100 engines and is exclusive worldwide on Honeywell’s HTF7000. Carlyle-era management completed seven accretive acquisitions at mid-to-high single-digit EV/EBITDA, runs net debt/EBITDA at 2.6x, and repurchased $60M in Q1 2026. Aman counters the fuel-price worry: 2026 MRO slots are sold out, fuel shocks hit demand with a 12-18 month lag, and 40% of revenue from business jet and military is fuel-insensitive.

The shares recently traded near $28, or about 22x $1.23 trailing EPS, below Aman’s low-$30s bear case. His DCF frames a bull case near $39 and a probability-weighted intrinsic value near $35, about 30% upside, implying 15.4x 2026E EV/EBITDA and 24.4x P/E, a discount to peers. Aman expects low-double-digit EPS growth and rising FCF as capex winds down. Risks include a Carlyle/GIC overhang selling above $30 since the 2024 IPO, and an October 2026 CEO change to Paul McElhinney.

Disclaimer

Wide-Moat Investing Summit 2026 was held from June 23-26, 2026. The content of this website is not an offer to sell or the solicitation of an offer to buy any security. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment, or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information set forth on this website. BeyondProxy’s officers, directors, employees, and/or contributing authors may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated herein.

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StandardAero Presentation

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This is the eleventh issue of This Week in Special Situations, our curated survey of actionable ideas. We do not attempt to profile every special situation. The universe of activist campaigns, buybacks, insider purchases, strategic reviews, and merger arbitrage spreads is vast, and most of it is noise. We filter for situations with a misaligned price or a noteworthy structural reason for market inefficiency.

Over time we will likely narrow this list further. That is where you come in. Please tell us which situations added value to your process and, just as importantly, which were of no consequence. Brutally honest feedback is the most valuable input we can receive. It will shape what we keep and what we cut. Our goal is to make this survey progressively more useful to you.

This week’s report (available as a slide deck) profiles 27 situations across four buckets: activist campaigns, capital return and insider conviction, M&A, and strategic alternatives. Below we highlight the handful that stand out on catalyst clarity, valuation, and asymmetry, followed by thesis summaries covering a broad cross-section of the report.

This publication is provided for informational purposes only and does not constitute investment advice. The information is based on publicly available data and regulatory filings. Errors are not only possible but likely. Readers should conduct their own research.

The Situations That Stand Out

Medifast (US: MED) holds ~$170M of cash and investments (no debt), $30+M more than its equity market cap, and H1 cash flow shows the balance sheet is not eroding the way that discount implies. Steamboat Capital disclosed a 7.1% stake on August 21 after buying about 84,000 shares near $11.60, then bought more on August 24. Its two nominees under a March cooperation agreement were elected in May. Operating cash flow was positive $2.0M against $2.1M of capex, leaving FCF near breakeven, and cash plus investments rose to $169.8M from $167.3M. The pressure sits on the top line, not the runway: second-quarter active earning coaches fell 49% to 11,700, first-half revenue dropped 31% to $152M, and the operating loss widened to $7.6M against fourth-quarter profitability guidance.

Group 1 Automotive (US: GPI) is an activist situation, with Conifer buying a third of its position at ~$294 per share, as compared to the recent $263 quotation. Conifer disclosed 1.16M shares, or 9.7%, on August 20 at a $258 average, and stated its purpose as seating Benjamin Hart, an employee of a Conifer affiliate. Group 1 is 46% of Conifer’s $607M 13F book, and this is the firm’s first Schedule 13D in an EDGAR record back to 2019. The board had already expanded to ten directors on August 10, ten days earlier. The advance-notice window of January 12 to February 11, 2027 is what would turn a friendly request into a formal contest.

Cars.com (US: CARS) has cut its share count 13% in twelve months through steady open market buying funded from operations, at a 19% trailing FCF yield. Trailing operating cash flow of $151.6M less $24.2M of capital spending, of which $22.4M is capitalized software, leaves FCF of $127.4M against a ~$660M market cap. Working capital was a $13M drag and the first half absorbed a final $11M D2C Media earnout, so that figure is not flattered. Cars.com retired 6.2M shares for $57M in the first half at roughly $9, buying in every month of Q2, but the $90M target reaffirmed August 6 leaves about $33M for the second half at $12 a share. Net debt of ~$420M is 63% of market cap.

Reinet Investments (Luxembourg: REINI) trades at ~€24 per share, as compared to ~€29 of cash per share alone, so a buyer collects the private equity book, the gold, and everything else for less than nothing. After exiting British American Tobacco in early 2025 and selling its 49.5% Pension Insurance Corporation stake to Athora in March for €3.3B, Reinet held €5.4B of cash at 30 June, 81% of the €6.6B NAV, or €36.39 per share. Buybacks of up to €500M are earmarked to the 2027 AGM, the €250M seventh tranche running on the JSE to 15 December, but repurchased shares go to treasury, not cancellation. The Rupert-controlled adviser took €117M for the year to March, charging 10% of cumulative shareholder return off the share price, not NAV, and no further fee accrues until the shares average €28.48 over a financial year’s last 20 sessions.

Cloopen (US: RAASY) offers a 28% gross return to a fixed US$2.96 cash take-private whose September 24 vote is effectively pre-decided, but it’s unclear whether the idea is actionable as the shares are highly illuquid. A consortium of founder-CEO Changxun Sun, Trustbridge Partners and Dmall signed on May 12 at US$0.4940 per ordinary share, six per ADS. Rollover holders control 60% of the voting power against a two-thirds-of-votes-cast threshold, so blocking it needs more than 76% of non-buyer Class A shares voting against, and thin turnout entrenches the deal rather than threatening it. No antitrust clearance is required and there is no express financing condition, leaving a Parent-side US$85M available-cash test at closing as the live break risk. Depositary fees trim the realized return to roughly 23%, and median volume is about 1,200 ADSs a day, including three zero-volume sessions.

Quick Thesis Summaries

Brief takes on the rest of this week’s report:

• Republic Services (US: RSG) — Bill Gates’s Cascade bought about 2M shares for roughly $435M in ten trading days through August 21, taking a 2008-vintage anchor stake to 37%, while the operative Item 4 has been unamended since February 2022 and still disclaims every plan under items (a) through (j).

• Philips (Netherlands: PHIA) — Exor and affiliates hold 19% and lifted their contractual ceiling from 20% to 22% on August 10, leaving ~€680M of permitted buying, or about 18 sessions of median Amsterdam volume, inside a standstill rather than a path to control.

• Norwegian Cruise Line Holdings (US: NCLH) — Elliott’s headline economic interest above 10% is only about 3% votable common, the rest cash-settled swaps, so the March cooperation agreement rather than a proxy fight is the whole governance lever against $15B of net debt at 5.3x leverage.

• BILL Holdings (US: BILL) — Starboard crossed 10% without buying a share, purely on a ~14M-share buyback, and the standstill that barred it from advocating a sale has now lapsed with the nomination window open to September 12.

• Xponential Fitness (US: XPOF) — Fund 1 Investments’ 9.9% stake lands mid-sale-process, but $514M of net debt at 5.2x sits ahead of a $258M equity, and 2025 adjusted EBITDA of $112M rests on roughly $106M of add-backs against $5.7M of GAAP EBITDA.

• Daikin Industries (Japan: 6367) — The ¥350B buyback is complete, executed in a single off-auction block at ¥24,110, and the stock now trades 13% below that price and within 4% of its pre-campaign level, with first-quarter operating margin down 0.8 points.

• Tenet Healthcare (US: THC) — Second-quarter open-market repurchases of ~5.7M shares for about $1.0B cut the count 6% sequentially, but net leverage rose from 2.25x to 2.33x on cash depletion alone, and ten insiders sold roughly $22M over six months with no open-market purchases.

• Bread Financial (US: BFH) — About $450M of repurchase authority remains after a 13% share-count reduction in seven months, but at 1.7x tangible book the buyback now dilutes book value rather than building it, offset only by a 23% ROTCE.

• Wix.com (US: WIX) — A completed modified Dutch auction retired 30% of the shares at $92.00, funded by a $500M revolver draw and a $260M placement rather than cash flow, flipping the balance sheet from $535M of net cash to about $670M of net debt.

• nCino (US: NCNO) — A fourth $100M authorization equal to 4% of market cap follows $300M already spent and a genuine 9% cut in the count, but implied second-half FCF of $22M to $27M means the credit facility, not cash generation, funds this one.

• Upwork (US: UPWK) — Trailing FCF is 16% of market cap, yet repurchases collapsed from $108M in the first quarter to $2M in the second while $361M of converts matured on August 15, and guidance for a higher third-quarter diluted share count embeds no net retirement.

• Yext (US: YEXT) — The completed $140M Dutch auction cleared at the floor of its range on 2.6x oversubscription, retiring 20% of the company six weeks after the CEO withdrew his own $9.00 take-private bid, and neither he nor the board tendered.

• Evolution (Sweden: EVO) — Kenneth Dart’s mandatory SEK 695 cash offer sits 17% below the market, so the question is not an arbitrage spread but how cheaply he accumulates the next increment of control while Evolution’s own buyback shrinks the votable denominator for him.

• NextEnergy Solar Fund (UK: NESF) — Six weeks into a formal sale process with no named bidder, the shares sit 34% below the 73p NAV, against Drax’s June purchase of Bluefield at about 0.91x NAV, which would imply roughly 66p.

• Tourism Holdings (New Zealand: THL) — At NZ$2.83 the shares sit 10% below BGH’s NZ$3.10 all-cash indication and 17% to 20% below an unnamed strategic buyer’s NZ$3.30 to NZ$3.40 range, with both parties in diligence and neither proposal binding.

• Domo (US: DOMO) — Trade 23% below the ~$4.80 per share of net cash the board expects to retain after selling substantially all operating assets to Progress Software, but a distribution is not promised yet.

• SkyCity Entertainment (New Zealand: SKC) — At NZ$0.68 the shares sit 3% under Oaktree’s rejected NZ$0.70 indication and 10% under a NZ$0.75 marker from a second party, against 11% of downside to the undisturbed price and no live bid on the table.

• BlackRock TCP Capital (US: TCPC) — The Pantheon portfolio sale closed August 4 at 95% of December fair value, leaving the BDC at 0.71x pro forma NAV, with KBW hired to run a strategic review.

• Newell Brands (US: NWL) — A $600M 6.250% unsecured issue retires the September 2027 maturity outright but hands the wall to $1.25B of 8.500% notes due June 2028, and reported net leverage of 4.8x is closer to 5.4x excluding about $126M of tariff refunds.

• Wolfspeed (US: WOLF) — The 70% debt cut is done, but ~71M reserved shares stand against 53M outstanding, and the coupon on $636M of notes stepped up to 15.875% in cash after a June test failed, with relief conditioned on CHIPS money that has not been awarded.

• Apollo Commercial Real Estate Finance (US: ARI) — A September 29 vote on complete liquidation would pay $3.70 to $4.00 per share within 30 days against a $6.86 price, with $7.75 to $8.50 estimated in total to 1H 2028, though approval needs a majority of all shares outstanding and brokers hold no discretion.

• Gray Media (US: GTN) — The August 21 first lien refinancing cuts 300bp of coupon and extends to 2034, but $6.7B of net claims continue to rank ahead of a ~$520M equity stub.

The deck is available to members (scroll up to download, or sign up below).

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• Latticework 2026, Chicago, Illinois (Nov. 10-11, 2026)

• Ideaweek 2027 (FULLY BOOKED), St. Moritz (Feb. 1-4, 2027)

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What you will have at the end: the engine running by itself every weekday morning on an always-on server, with logging, failure alerts, a cache that refreshes intelligently, and a one-page runbook for keeping it healthy.

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What you will have at the end: the memo arrives in your inbox by email, and when you reply to it with feedback, the engine reads your reply, changes its own criteria, tells you what it changed, and lets you undo it. You will also have a single command (one line of text you run) that runs the whole daily job in order.

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For those who couldn’t join us, here is a synthesis of the key insights and thesis highlights shared by our community of intelligent investors.

This post summarizes views expressed by participants on an MOI Global member call and is provided for informational and educational purposes only. Nothing here is investment advice, nor a recommendation or solicitation to buy or sell any security. Speakers may hold positions in the securities discussed, and figures cited were stated on the call and have not been independently verified. Please do your own research and consult a qualified adviser before making any investment decision.

The 17% margin that is mostly an accounting artifact

James Emanuel opened with an argument he published earlier this month. Since the Second World War, net margins for the S&P 500 have generally sat in the five to six percent range. They reached roughly 13% after the Tax Cuts and Jobs Act, drifted toward 11% as rates rose, returned to 13% after ChatGPT, and on recent FactSet data now sit near 17%.

His explanation is accrual accounting rather than productivity. The hyperscalers and frontier labs are spending some 800 billion dollars this year and perhaps over a trillion next. That cash lands with the chip and memory makers, who book it as revenue immediately, while the spenders capitalize and depreciate it over five to seven years. The mismatch inflates index margins now and reverses when the build-out slows, as vendor revenues fall while depreciation runs on. Anyone modeling the index off a 17% net margin, James argued, is modeling close to a fiction. If the index-level data is unreliable, what does that say about the constituent numbers we all use?

Elliot Turner pointed out that incremental EBIT margins at Google, Amazon and Microsoft are high and still accelerating even after depreciation, which could offset falling vendor margins later. Barton Hooper asked whether the hyperscalers are themselves over-earning, noting an H100 rents for more today than at launch. How much of that spending is underwritten by the same end demand counted twice is now among the market’s most interesting open questions.

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Life science tools: focus on the picks and shovels

Elliot Turner, who hosts a biotech fireside chat with Peter Mantas at Latticework 2026 in November, made the case for life science tools rather than biotech itself. Biotech endured close to a decade of very little, with the XBI starting last year near levels it first reached in 2015. Fundraising has run four consecutive quarters at or above the prior peak, and the regulatory bottleneck has begun to clear. Tools appeal because you need them whichever drug wins, and because approval locks them in: once a component is written into an FDA filing, the manufacturer must keep buying it, and biosimilars inherit the same process.

His first name is Sartorius (Germany: SRT, SRT3), roughly 80% recurring revenue, where the equipment line has been sluggish after the COVID overbuild and five years without meaningful greenfield capacity. He expects that to invert sharply once capacity tightens, and flagged Lonza as the one CDMO he respects. His second is Bruker (US: BRKR), which makes high-precision instruments across genomics and proteomics and is moving into clinical and companion diagnostics. A surprising detail: Bruker’s largest customer is Taiwan Semiconductor, because the industry is shifting to X-ray metrology, and that segment grows 30% at 30% margins against a corporate average of single-digit growth at 12%.

PVA TePla: volume story at a reasonable price

Nitin Sacheti argued that most picks-and-shovels plays in AI have been pricing stories, and a bottleneck price is a poor thing to capitalize into a multiple. He prefers volume growth at a reasonable multiple, in businesses that have not borrowed their future through average selling prices.

The name he highlighted is PVA TePla (Germany: TPE), which he recently visited in Wettenberg, Germany where he sat down with the CEO and CFO. One division builds the furnaces that grow silicon, silicon carbide and indium phosphide boules for wafer makers such as Siltronic and GlobalWafers. The second is metrology, where ultrasound inspection runs fast enough to sit on the line as a first-pass screen ahead of slower X-ray, with TSMC, Intel and Micron as customers. Book-to-bill runs around 2.2 times, with metrology orders converting to revenue over the next few quarters. He sees three-plus euros of EPS in 2028 and four-plus in 2029 against a 29-euro share price, with recent weakness driven by tariffs and order timing rather than anything structural. Nitin will present PVA TePla in depth at MOI’s fully online European Investing Summit in October.

Copper: four demand drivers against a supply chain with long lead times

Will Thomson, who hosts the copper panel at Latticework 2026 in November, called copper the most macro of metals, pulled by four secular demand drivers: energy transition, AI, core economic demand and defense. Data centers alone consumed 1.1 million tons last year out of roughly 28 million globally. Supply is growing about 1%, grades are falling, and the capital cost of new production has risen to some 20,000 to 30,000 dollars per ton from 15,000 to 20,000.

That makes brownfield restarts attractive, since an old mine at 1% copper is now a good orebody. Magna Mining (Canada: NICU) is restarting past-producing nickel, copper and platinum-group mines in Sudbury using existing infrastructure; its shares have fallen from about 3.54 Canadian dollars to about 2.50 on sector sentiment rather than anything company-specific. Blue Moon Metals (Canada: MOON, US: BMM) brings on a sedimentary-hosted deposit in Norway in the fourth quarter of next year, capital efficient and long-lived, with a deep water port at the mine mouth, and the first new European copper mine in a decade or more. Copper near six dollars eighty sits above the roughly five-fifty incentive price, but it is also where substitution toward aluminum starts to interest buyers.

European banks, where expectations remain quite low despite stock price recovery

Patrick Brennan observed that European bank shares have outrun the Mag Seven over the past four or five years, which says more about the starting point than the businesses. The sector had been priced for a return to negative rates that forward curves no longer support.

Metro Bank (UK: MTRO) trades around 170 pence with average deposit costs below 1%, striking in the UK, and he sees roughly 40 pence of EPS by 2028 under a controlling shareholder with a long record of selling banks well. CAB Payments (UK: CABP) is the more unusual situation: a London-listed payments business focused on Africa and expanding into Latin America, growing around 20% at the top line, listed at 330 pence and trading near 82. Its 40% holder has a bid in at 84, StoneX has bid 110, and an earlier approach came nearer 145. The bid needs 75% approval, which Patrick does not expect it to get. With a new dividend and a CET1 ratio in the low 20s against a 14 to 15% target, he sees ample capacity to return capital if it stays independent.

Allocating capital away from the AI trade

Patrick Brown holds coal as an inflation hedge and a sector in which he can own the low-cost producers. Warrior Met Coal (US: HCC) has brought on a new mine well below the cost of its existing production. Core Natural Resources (US: CNR), formed when CONSOL Energy merged with a metallurgical producer and now split roughly evenly, was the company whose exports were disrupted by the Maryland bridge collapse. Both sit very low on the cost curve, so competitors fail first, supply leaves, and prices recover before the pain reaches them. Neither carries meaningful debt. He invoked Nassim Taleb’s antifragility, and noted that with the Strait of Hormuz closure affecting gas, some countries weighing gas-fired plants are reconsidering coal.

Keith Smith has been working through small banks and insurers on a Berkshire-style float model. His example was Northeast Bank (US: NBN), effectively a debt fund inside a bank charter, buying loan portfolios from sellers in distress or in merger, alongside capital-light SBA and insured-loan businesses. It earns ROEs around 20% at under ten times earnings, run by Rick Wayne, who has executed this playbook since the 1980s. Javier López Bernardo of BrightGate Capital presented it at Best Ideas 2024.

Can you still be a pure stock picker?

A member raised an interesting question: whether it is still possible to be purely bottom-up given how much the macro has driven the market, and whether a more technological, more international S&P still represents what it once did. Our continued belief: A bottom-up research focus remains entirely valid, and several people on yesterday’s call are proof of it. However, the further an investor wades into the fastest-moving sectors, the more of a macro thesis he is underwriting, whether explicitly or implicitly.

Yifan Zhang cited a fascinating example: AI-related security spending is rising, but not as he expected: models find vulnerabilities in human-written code faster than teams can approve fixes, so firms are hiring more engineers to keep up. Demand is being created by the tool meant to reduce it.

We closed with a timely insight by Wyatt Sparks: After three months in which the market chopped sideways while rotating violently underneath, his “unreasonable” rule for portfolio management is that over-trading an account is probably not the way to go. Go touch grass, he suggested, and enjoy the rest of the summer.

I found the call incredibly valuable and hope this summary provides a few worthwhile insights for your own capital allocation process.

Our next live call will be on October 21 at 2:00 pm ET. No formal registration is needed; simply click the following link at the scheduled time to join.

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Bob Robotti has spent decades doing the kind of investing that is easy to describe but hard to practice: looking carefully where others are not looking, studying unfashionable businesses, distinguishing temporary difficulty from permanent impairment, and waiting patiently for value to surface. His career has unfolded across deep-value securities, cyclical industries, energy, housing, shipping, board service, and active ownership. Through it all, he has remained unusually committed to the bottom-up work of understanding real-life businesses.

One of the recurring lessons in Bob’s work is that investing is not an abstract exercise. It is not enough to say that an industry is cyclical, a stock is cheap, or the market is wrong. The real work is in understanding the business, the balance sheet, the capital cycle, the incentives, the industry structure, and the people making decisions. As Bob has put it, “There are no universals. There are only specifics.”

That idea runs through this program. It traces Bob’s early exposure to Tweedy, Browne, Walter Schloss, Joe Reilly, and Mario Gabelli; his founding of Robotti & Company; his development as a value investor in overlooked and capital-intensive sectors; and his long study of how markets misprice businesses when fear, institutional constraints, or short-term thinking obscure normalized earnings power.

We are deeply grateful to Bob for the wisdom and insights he has shared with the MOI Global community and the broader investment community over the years. His willingness to explain not only what he has done, but how he thinks, has made him an important teacher for intelligent investors. He has spoken with unusual candor about mistakes, cycles, patience, active ownership, and the emotional discipline required to stay with an investment when the market disagrees.

Our hope is that this special episode, Bob Robotti: Turning Over Rocks, will help more investors appreciate the depth of Bob’s approach. It is a program about value investing, but also about apprenticeship, temperament, independent judgment, and the enduring importance of doing the work.

For those willing to turn over enough rocks, the lesson is not merely that bargains exist. It is that the act of looking carefully, patiently, and specifically remains one of the investor’s most durable advantages.

What you will have at the end: a complete one-page investment memo for the single best company you have not seen recently, generated from end to end. The memo is built strictly from real data, shows where the company is weak, and never pretends to be a buy recommendation. You will also have a reusable instruction file for the memo format, and a second Claude Code that checks the memo’s numbers against the data.

Read more

Ideas from our Weekly Inspiration newsletter

We highlight a few stock write-ups from the latest Weekly Inspiration:

Boston Scientific (BSX) derated after its two growth engines, Farapulse and Watchman, together roughly a quarter of revenue, stalled on competition and physician hesitancy. Aurelion Research reads the company’s 2027 guidance as embedding something close to a worst case, which sets a low bar rather than a high one. Three things argue against the pessimism: the CEO bought $9 million of stock in the open market, the board authorized a $2 billion buyback, its first since 2020, and a launch cadence runs through 2027 and 2028. At ~15x EV/EBITDA and a 4.9% free cash flow yield, the risk and reward on a durable 7-8% organic grower look asymmetric.

LENSAR (LNSR) kept compounding after FTC opposition scuttled Alcon’s $430 million takeover, lifting US procedure share on its ALLY robotic systems from 14% to 23.4% with recurring revenue annualizing near $55 million. Christian Schmidt is candid that the headline 4.8x trailing P/E overstates how cheap this is, because warrant dilution is heavy; on a fully diluted basis the shares trade near 2.9x EV/revenue, still well below the 8x Alcon had agreed to pay for the business. The two risks he names are concrete rather than rhetorical: international placements stalled when the deal broke and distributors have to be re-engaged, and North Run holds concentrated voting control.

JW Lifescience (Korea: 234080) makes the intravenous fluids and parenteral nutrition South Korean hospitals cannot operate without, holding close to half the domestic market behind regulatory and logistical barriers that are genuinely hard to cross. It trades near 4.8x EV/EBITDA and 0.8x book despite compounding net income at ~22% a year over five years. Tangible Bruce argues that the three overhangs which compressed the multiple, the absorption of JW Bioscience, the doctors’ strikes and a frozen dividend, have now all resolved. Exports through the Baxter partnership are compounding above 20%, margins are inflecting, and deleveraging is taking the balance sheet toward net cash. A formal commitment to pay out at least 25% of earnings and normalizing surgical volumes carry the re-rating case.

MegaChips (Japan: 6875) owns a ~10% stake in SiTime whose after-tax value, added to net current assets, comes to roughly ¥19,842 per share against a ¥11,100 share price. That arithmetic ascribes nothing to the fabless ASIC business, which has supplied Nintendo since 1994. Altay Capital notes that management is selling SiTime shares to fund buybacks, cutting the share count from 17 million to 14 million since May 2025, and yet the stock sits at 0.9x book. The risk is the other side of the trade: SiTime’s own valuation is rich, so the gap can close from the wrong end.

As always, the above theses reflect the linked authors’ views (available here), not Latticework recommendations.

Articles worth your time

Nvidia’s Risky Business, by Ben Thompson, sets the AI buildout’s turn toward debt against Jay Cooke’s railroad bonds and the Panic of 1873. Oracle, Meta, Alphabet and Amazon raised $194 billion by early July this year after raising $108 billion in all of 2025; 86% of this year’s issuance already trades above its issue yield, and cover on recent deals has fallen from 5x in February to under 2x. Microsoft is the outlier, still generating $19.6 billion of quarterly FCF without debt-funded capex, while Google has moved on to equity, raising $85 billion, including $10 billion from Berkshire. A critical point concerns Nvidia’s new financing platforms with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR, intended to mobilize over $500 billion of third-party capital, with Nvidia backstopping up to 25% of residual value. Equity dilutes the upside without adding company risk; this structure instead creates risk for pension and insurance capital.

AI’s Bar Mitzvah Moment? From Hope & Hype to Hard Business Questions!, by Aswath Damodaran of NYU Stern, insists that AI now be judged as a business rather than as a phenomenon. The Mag Seven accounted for 45% of the increase in market capitalization across all US stocks between 2022 and 2025 and carry an aggregate value of $23.7 trillion, while AI investment contributed roughly 1% of the 2.5% real GDP growth in 2024 and 2025. His complaint is that both camps cherry-pick the evidence: optimists cite usage statistics, skeptics cite capital spending and the absence of profits, and neither side asks whether these businesses can build moats. Large addressable markets, he points out, do not reliably become large businesses, and heavy capital spending does not by itself condemn a company to destroying value. The questions that decide it are the prosaic ones about products, unit costs and barriers to entry.

S&P500 Net Margins Soar (16.9%); Or Do They?, by James Emanuel, argues that the index’s record profit margin is an accounting artifact of the AI capital-spending cycle rather than a durable improvement in economics. S&P 500 net margins averaged 5.6% in the 1990s, 6.3% in the 2000s and 8.8% in the 2010s; FactSet now shows 16.9%, a 370 basis point jump in a single quarter from an already elevated base. His explanation is a timing mismatch. The ~$800 billion the hyperscalers will spend this year is recognized immediately as revenue by Nvidia, Micron and hundreds of other suppliers, while the buyers capitalize the same spending and depreciate it over many years. Free cash flow yields, which oscillated near 5% for years, began falling sharply in 2023 as capex accelerated, telling the opposite story. The mechanism runs in reverse when the buildout slows, because revenue drops while the depreciation keeps flowing through, and he thinks the average margin over the next five or six years may well print a single digit.

The Radio, the Submarine and the Tariffs, by Ed Conway, corrects the standard telling of the 1987 Toshiba boombox smashing and draws a lesson for anyone underwriting a policy-driven thesis. Congressmen took a sledgehammer to that radio the day after the Senate voted to sanction Toshiba, and the reason was not Japanese consumer electronics. Toshiba had sold a nine-axis milling machine to the Soviets when the export rules permitted three, letting them grind quieter submarine propellers. The false customs declarations went undetected for years and surfaced only because a disaffected colleague reported them. Conway sets this beside the White House’s recent transshipment paper, which concedes that Chinese goods still reach America by way of third countries, and reads the paper as an admission that nobody, including the government imposing the barriers, can reliably say where a product was made. Barriers rarely stop trade; they lengthen and obscure the route it takes.

The deck

The 116-page Monday Morning Briefing is available to members. It spans our weekly scoreboard, idea-generation screens, market valuation and positioning, macro and fixed income, and equity valuation screens across international markets (Canada, the UK, Germany, Australia, Japan, Korea, India and Sweden, alongside a cross-country P/E table and European REIT discounts to net tangible assets). We welcome your feedback.

Feedback on the Briefing

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A few words on the format

The Briefing is designed to answer a deceptively simple question. If you were sitting down before the weekly market open, as an investor rather than a trader, what would you want in front of you?

Each week, the Briefing walks through five parts.

• Weekly Review & Outlook covers equity performance, sector moves, the earnings just reported, and the earnings coming up, alongside curated editorial highlights from our Weekly Inspiration newsletter.

• Idea Generation surfaces candidates from screens we run: biggest decliners, names near 52-week lows, low multiples, high FCF yields, spinoffs, activist situations, buybacks, short interest, and more.

• Market Valuation & Positioning steps back to the index level: the Buffett Indicator, aggregate multiples versus history, S&P 500 concentration, equal-weight versus cap-weight, and long-run factor returns.

• Macro & Fixed Income rounds out the picture with rates, credit spreads, the Fed balance sheet, the dollar, labor, regional PMIs, and housing.

• International Markets closes with equity valuation screens country by country, alongside cross-country valuation comparisons.

Table of contents

Note: Slides showing data that is updated on a monthly or quarterly basis may not be included in every issue of the Monday Morning Briefing.

Part 1 — Weekly Review & Outlook

• Global equity index performance across regions

• GICS sector total returns

• Weekly commodity price changes

• Quarterly earnings: biggest beats and misses, market cap above $500M

• Selected insights from the week’s notable earnings calls

• Top reporters by market cap, week ahead

• Takeaways from featured Weekly Inspiration articles

• What’s new in AI for investment managers

• Curated video and audio from Weekly Inspiration

• Key takeaways from each featured video and podcast

Part 2 — Idea Generation

• S&P 500 stocks with the largest weekly declines

• Largest weekly declines among US stocks

• Cheapest stocks trading within 10% of their 52-week low

• Key takeaways from curated analytical articles

• Notable activist campaigns and acquisition proposals

• Featured spin-off opportunities

• Holdings two or more tracked value managers added last quarter, now below their quarter-end price

• Open-market purchases by officers, directors, 10+% owners

• US-listed equities $300M+ market cap, insiders own 20% or more, lowest EV/EBIT

• S&P 500 share repurchase activity, trailing twelve months

• S&P 500, largest quarter-over-quarter decline in shares outstanding, buyback-verified (new this week)

• Largest quarter-over-quarter decline in shares outstanding for US stocks $300+mn ex-S&P 500, buyback-verified (new this week)

• FINRA consolidated short interest

• Ranked by short interest as a percent of float

• S&P 500 highest FCF yield (ex-financials)

• S&P 500 ex-financials and ex-REITs: stock-based compensation vs. reported free cash flow

• Three-year ann. FCF yield for US stocks $300+mn (ex-fin.)

• S&P 500 highest trailing earnings yield (all sectors)

• Three-year ann. earnings yield for US stocks $300+mn

• S&P 500 cheapest by EV/EBITDA (ex-financials)

• EV / three-year ann. EBITDA for US stocks $300+mn

• S&P 500 cheapest by price / tangible book value

• Cheapest by price / tangible book for stocks $300+mn

• Enterprise value per dollar of real estate at original cost, before depreciation

• S&P 500 highest 5-year average ROIC

• Highest 5-year ROIC for stocks ex-S&P 500

• Valuation in historical context for selected companies

• Indicated dividend yield for US stocks $300+mn, net debt at or below 25% of market cap

• US micro-caps, P/S < 1.0, ranked by 52-week price change

Part 3 — Market Valuation & Positioning

• Equity market value / GDP

• S&P 500 deflated by M2 money supply

• After-tax corporate profits / GDP

• S&P 500 trailing P/E

• S&P 500 earnings yield vs. 10-year Treasury

• Trailing P/E by GICS sector

• Top 10 holdings by index weight

• RSP / SPY relative performance, trailing one year

• Russell 2000 / S&P 500 relative performance, five years

• S&P 500 breadth indicators

• Money market fund assets and ETF category returns

• CBOE VIX implied volatility term structure

• FINRA net margin debt — customer securities margin accounts

• S&P 500 calendar-year price returns and largest intra-year drawdowns

• Fama/French factor returns, annualized and compounded

• Fama/French value spread — book-to-market gap between cheap and expensive stocks

• Fama/French HML factor — cumulative return spread by decade

• Growth of $1 invested in Fama/French size-value style portfolios since 1926

Part 4 — Macro & Fixed Income

• U.S. Treasury yield curve

• 10-year Treasury yield minus year-over-year CPI

• U.S. high yield credit spreads

• Federal Reserve total assets and composition

• M2 money stock, year-over-year change

• Total public debt as a percent of GDP

• Trade-weighted U.S. dollar index

• Unemployment rate and initial jobless claims

• Regional Fed manufacturing diffusion indices

• 30-year mortgage rate and housing starts, trailing ten years

Part 5 — International Markets

• World equity market cap / world GDP

• Ranked by discount to each market’s own 10-year average P/E

• Ranked by discount of share price to the company’s own disclosed EPRA NTA per share

• Canada equity valuation screens

• UK equity valuation screens

• Germany equity valuation screens

• Australia equity valuation screens

• Japan equity valuation screens

• Korea equity valuation screens

• India equity valuation screens

• Sweden equity valuation screens

Featured Events

• Latticework 2026, Chicago, Illinois (Nov. 10-11, 2026)

• Ideaweek 2027 (FULLY BOOKED), St. Moritz (Feb. 1-4, 2027)

• The Zurich Project 2027 (COMING SOON) (Jun. 1-3, 2027)

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