Over the next couple of weeks the discipline of value investing runs headlong into the loudest event the public markets have seen in a very long time, if ever. SpaceX has filed for the largest IPO in history, with a listing reportedly targeted for June 12. OpenAI is expected to follow in September, and Anthropic is eyeing October. Together the three are seeking something on the order of $3.5+ trillion in combined market value. Three pieces shaped my thinking on what a long-term investor should make of this, and each comes at it from a different altitude.

Trung Phan reframes the SpaceX S-1 as an AI infrastructure story wearing a rocket costume. His word count of the filing tells the tale: “compute,” “xAI,” and “connectivity” now crowd the document alongside “launch.” The pitch is no longer rockets and Starlink alone. It is a $26.5 trillion AI total addressable market sitting beside a $1.6 trillion connectivity number and a $370 billion space number, with SpaceX positioning to own the compute. Phan is candid about the absurdity, invoking Matt Levine’s “Elon Markets Hypothesis,” the notion that some assets are priced not on their cash flows but on their proximity to Elon Musk. At $18.7 billion of 2025 revenue, which he pegs at roughly 93 times sales, that hypothesis is carrying an enormous load. What a value investor should notice is the structure of what is being sold: a narrative priced as though the option has already paid off.

Aurelion Research does the arithmetic the narrative would prefer you skip. They give the reframe its sharpest name, the AI Trojan Horse, a compute business carried to market inside a rocket company. Their sum-of-the-parts is the most useful work I read this week. Strip away the story, and Starlink, the AI segment, and the launch business support a valuation near $700 billion (still generous, in my opinion). To bridge from there to $1.75 or $2 trillion, you have to assign close to a trillion dollars to space data centers that do not yet exist and to a Mars optionality that may never produce revenue. Their cross-IPO comparison is equally clarifying. Of the three, OpenAI carries the worst loss profile and the deepest dependence on someone else’s compute, while Anthropic shows the fastest revenue growth, the earliest path to break-even, and the cheapest forward multiple. Aurelion states plainly that they will own none of the three, and that their own book offers better risk and reward. That is the right instinct. Relative value is real, but the least expensive of three expensive things is a ranking, not a margin of safety.

Ben Thompson lands on the most philosophically honest framing. He says outright that the filing cannot be justified by any financial model, calls the numbers absurd, and notes that growth slowed even as the xAI acquisition tipped the company into a $4.9 billion loss on $5.1 billion of AI research expense, money spent building a model that sits in fifth place. And yet he argues that orbital data centers are plausible, that SpaceX could become the dominant supplier of the world’s marginal compute, and that this alone might be enough. The rumored IPO valuation embeds extraordinary risk.

The three pieces agree on the one fact that matters and disagree only on whether it should trouble you. Phan, Aurelion, and Thompson all conclude that current financials cannot support the proposed valuations, with SpaceX being the most egregious and Anthropic being the most palatable. Phan and Thompson lean on the Musk reality-distortion field, the Elon Markets Hypothesis, and the Tesla precedent, to argue the price may hold regardless. Aurelion does the work to show exactly how much hope is embedded in the number, and then declines to participate.

This is the capital cycle in its most public form, and the frames from last week apply here without modification. The AI buildout is cresting, the spending curve is steep, and the most celebrated names are being floated at the very top of it. Paying up at that moment, on margins and multiples that are stretched at the same time, is the error the historical record warns against most consistently. None of this makes the businesses bad. Starlink is one of the finest assets to reach the public markets in a decade, and SpaceX’s launch economics are a genuine moat. It means the edge for a long-term investor lies in the willingness to decline mispriced hope, to read this IPO wave as a sentiment marker rather than a shopping list, and to hunt instead in the corners where fear, not hope, is the thing being priced in.

A bit of feedback

“Most of what I monitor, all in one place. Great value add.” —Brad Lummis

“Loving these Monday briefings!” —Jon Bartel

“Tightly presented and easy to digest. I just spent 20 minutes going through it, and it’s helped to level set me for the week ahead.” —Michael Loftis

“A great piece and thoughtfully assembled.” —Brian Wolf

“I don’t think I have ever seen more valuable content in one place.” —Bill Coleman

“Worth its weight in gold.” —Shree Viswanathan

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 four 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.

The new issue is attached below. We welcome your suggestions for improvement as we refine the format week to week.

Read more

This week’s briefing wrestles with a question that refuses to be settled: are we in an AI bubble, are we priced for perfection, or has the narrative already quietly inverted? Three pieces shaped my thinking, and each takes the question from a different angle.

Cullen Roche argues there is a “bubble in bubble calls.” His claim is empirical, not rhetorical. Corporate profits as a share of GDP sit near record highs, the AI trade is the driver, and in his framing high valuations are warranted as long as that chart stays elevated. To his credit, he acknowledges that when expectations surge the margin for error thins and sequence risk rises. Where I part company is on the conditional itself. Mean reversion in profit margins is one of the most reliable patterns in financial history. Treating the current margin level as the sustainable baseline, and capitalizing it at premium multiples, is precisely the move that has historically marked the most punishing entry points. The time to pay up on multiples is when margins are depressed and earnings are understated, not when both are stretched.

Dan Rasmussen and Chris Satterthwaite sharpen that concern from a different angle. Invoking Mordecai Kurz’s “correlated beliefs” framework, they note that the semiconductor complex now trades at roughly 55x earnings, which implies 16.5% EPS growth for a full decade. About 75% of the present value of the global semi industry is derived from cash flows beyond year ten, in territory clouded by deep uncertainty. Microsoft itself disclosed on its Q1 2026 call that two-thirds of recent capex went to CPUs and GPUs with three to five year useful lives, so the hamster wheel is spinning fast. Shiller’s CAPE sits at 42x, within a whisker of the 44x peak in late 1999. The conclusion, that those who underwrite the first $5 to $10 trillion of AI capex may not capture the hoped-for returns, lines up with everything we know about prior capital cycles, and it is the right caution to hold in mind.

Logan Shearer offers what I found perhaps the most actionable frame. He calls it Bizarro World. Software names that were left for dead two or three years ago, with Adobe collapsing from 60x EV/EBIT to roughly 11x, now sit at depressed multiples with stable growth and stable margins, while the picks-and-shovels beneficiaries of the AI buildout have enjoyed simultaneous growth, margin expansion, and multiple expansion. Shearer’s instinct is classically value: buy mispriced fear, avoid mispriced hope. He warns against the capital cycle error of paying up at the top of the spending curve, and reminds us that tacit knowledge, the kind that separates a hobbyist from a professional, remains a moat the LLMs have not yet breached. That is exactly the orientation I would commend to long-term value investors today.

Rasmussen and Shearer point in compatible directions. Verdad sets the macro guardrail by quantifying just how much future growth is already in the price of the AI complex. Shearer turns that observation into a hunting ground by identifying corners of the market where fear has been mispriced and the capital cycle is working in the patient investor’s favor. Roche is correct that the AI trade has real fundamentals underneath it, and he is right to push back on lazy 1999 analogies, but the conditional at the heart of his argument, that today’s elevated margin level will persist, is precisely the assumption the historical record warns against.

The rest of this week’s briefing brings the data: activist 13D filings, fresh spin-offs, micro-cap Tiny Titans, names trading near 52-week lows, and the cheapest broad-universe stocks on P/TBV and three-year EV/EBITDA, alongside the highest three-year FCF and earnings yields. Read it with these three frames in mind.

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 four 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.

A bit of feedback

“Loving these Monday briefings!” —Jon Bartel

“Most of what I monitor, all in one place. Great value add.” —Brad Lummis

“A great piece and thoughtfully assembled.” —Brian Wolf

“Tightly presented and easy to digest. I just spent 20 minutes going through it, and it’s helped to level set me for the week ahead.” —Michael Loftis

“Worth its weight in gold.” —Shree Viswanathan

The new issue is attached below. We welcome your suggestions for improvement as we refine the format week to week.

Read more

Will Thomson’s Q1 Letter (Massif Capital)

Download the letter here.

The commodity world has shifted from a geology-first to a geography-first pricing regime, and most equity models have not caught up. The decisive question is no longer “can the molecule be pumped and the metal mined?” but “will the sovereign let it leave, and can the hull pass the strait?” Thomson argues the 1990 to 2015 era of single global prices, freely transiting tankers, and neutral jurisdictions was a 25-year holiday from a five-century norm of commodities priced by power and moved by sovereign favor. The Strait of Hormuz, China’s rare-earth refining monopoly, the DRC’s cobalt licensing, and dollar weaponization are not metaphorically similar chokepoints, they are structurally the same. The investor takeaway in four phrases: basis is the new beta, netback realization determines who survives, working-capital cycles have lengthened, and discount rates absorb geography before they absorb cash flow.

The Brent forward curve is steeply backwardated from roughly $105 at the front end to $66 by 2038, pricing the Iran war as a transient shock. Thomson thinks the curve is wrong. His probability-weighted real Brent over five years works out to roughly $83 against a strip implying $68 to $72, with half the probability mass at fragmentation-premium or better outcomes and only 15 percent at the structural bear. Upstream capex sits at $13.8 per BOE versus a $24 historical norm, tier-one shale inventory is down to 3.7 years, seven U.S. refineries have closed since 2020, and U.S. jet fuel days-of-supply is at its lowest since 1963. The IEA has cut its 2030 U.S. EV penetration estimate from 55 to 20 percent. Equinor is the only supermajor that has credibly committed to holding production flat through 2035, which is why the portfolio is overweight the Norwegian upstream cluster (Var Energi, Aker BP, Equinor) and Harbour Energy. These producers generate cash at $80 Brent and gush at $115.

The highest-asymmetry idea in the letter is Allied Critical Metals, a Portuguese tungsten developer where Massif was the first institutional money in 2024. Tungsten APT has gone from $380 per mtu at end-2024 to $3,150 on March 27, a 726 percent gain, against a marginal Western replacement cost of $300 to $500. China holds 52 percent of reserves and roughly 83 percent of mine production and added tungsten to its export-restriction list in February 2025. ACM’s Borralha asset is fully permitted as of January 2026, designated a strategic initiative of national importance by Portugal, fully funded through 2027, and sits in the second quartile of the global cost curve at $303 per mtu all-in sustaining. Probability-weighted intrinsic value of C$3.83 against a current C$2.12 quote (45 percent margin of safety), with the comparable producer Almonty trading at a C$8.2 billion market cap. The position has already contributed roughly 11.7 percent across Q1 and April combined on under 8 percent of NAV, with the warrant book doing the heavy lifting. This is the template Thomson wants to replicate: a sub-3 percent private entry, two tranches of warrants for convexity, and a thesis driven by geography rather than geology.

Mauboussin & Callahan, “Bayes and Base Rates 2.0”

Download the paper here.

OpenAI’s projected sales path implies a 9 to 10 standard deviation outcome versus 75 years of U.S. corporate history. Across roughly 19,300 firm-period observations from 1950 to 2025, no public company with comparable starting revenue has ever grown anywhere close to the 85 to 118 percent CAGR OpenAI is forecasting through 2030. The closest precedent, AOL at 103 percent, was achieved only by absorbing a company more than five times its size.

Narrowing the reference class to “tech” or “software” does not rescue the forecast, it actually makes the implied probability worse. The instinct to say “but AI is different” is the conjunction fallacy at work. The information technology sample shows a lower mean growth rate and higher variance, putting OpenAI’s number at a 7 standard deviation event, which is roughly a 1 in 780 billion outcome under a normal distribution.

Sales growth and value creation are not the same thing, and most of the historical top-25 sales compounders got there through M&A rather than organic growth. Investors should hold base rates as the prior, then update for unique evidence such as intangible intensity and unprecedented adoption speed, but they should not abandon the prior just because a story is compelling.

Christopher Tsai, “Value Investing and the Emerging 4.0” (Tsai Capital)

Download the paper here.

Tsai argues value investing has progressed through three distinct eras and is now entering a fourth, and most investors are still operating in 1.0 or 2.0 while the durable compounders live in 3.0 and 4.0. The framework forces you to ask which “operating system” you are actually running when you pick a stock, and whether a single forward P/E ratio can even capture what a platform business is worth.

Scale-economies-shared businesses come in two flavors, supply-side (Amazon, Tesla, Starlink lowering prices to feed a flywheel) and demand-side (YouTube, Instagram, Google Search competing on what Tsai calls “Engagement Value per Unit Time”). Both quietly accumulate latent pricing power that the market does not see on a current P/E basis. What looks expensive today often is not, precisely because management has refused to flex that pricing power.

Value Investing 4.0 reframes intelligence itself as the economic castle and digital labor as the product. True 4.0 businesses cannot yet exist as standalones because the foundational “edge” is too capital-intensive, so they are incubated inside profitable 3.0 parents (Tesla funding Dojo and Optimus, hyperscalers funding the frontier labs). Valuation here requires probabilistic, optionality-rich thinking rather than five-year DCF models.

Feedback on the Monday Morning Briefing

“Loving these Monday briefings!” —Jon Bartel

“Most of what I monitor, all in one place. Great value add.” —Brad Lummis

“A great piece and thoughtfully assembled.” —Brian Wolf

“Tightly presented and easy to digest. I just spent 20 minutes going through it, and it’s helped to level set me for the week ahead.” —Michael Loftis

“Worth its weight in gold.” —Shree Viswanathan

Enjoy this week’s Briefing.

Read more

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 four 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, and housing.

The third issue is attached below. We welcome your suggestions for improvement as we refine the format week to week.

A bit of early feedback

“Loving these Monday briefings!” —Jon Bartel

“Most of what I monitor, all in one place. Great value add.” —Brad Lummis

“A great piece and thoughtfully assembled.” —Brian Wolf

“Tightly presented and easy to digest. I just spent 20 minutes going through it, and it’s helped to level set me for the week ahead.” —Michael Loftis

“Worth its weight in gold.” —Shree Viswanathan

Table of contents

Please note: Certain slides showing data that is updated on a monthly or quarterly basis are not included in every issue of the Monday Morning Briefing.

Part 1 — Weekly Review & Outlook (p. 3)

• Global equity index performance across regions

• GICS sector total returns

• Weekly commodity price changes

• Quarterly earnings: biggest beats and misses

• Top reporters by market cap, week ahead

• Takeaways from featured Weekly Inspiration articles

• Curated video and audio from Weekly Inspiration

Part 2 — Idea Generation (p. 13)

• S&P 500 stocks with the largest weekly declines

• Largest weekly declines among US stocks

• Stocks nearest their 52-week lows

• Key takeaways from curated analytical articles

• Featured spin-off opportunities

• Notable activist campaigns and acquisition proposals

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

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

• FINRA consolidated short interest

• Ranked by short interest as a percent of float

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

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

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

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

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

Part 3 — Market Valuation & Positioning (p. 29)

• Equity market value / GDP

• 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 returns and largest intra-year drawdowns

• Fama/French value spread — gap between cheap and expensive

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

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

Part 4 — Macro & Fixed Income (p. 45)

• 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

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

Enjoy this week’s Monday Morning Briefing.

Read more

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 four 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, and housing.

The third issue is attached below. We welcome your feedback as we refine the format week to week.

Table of contents

Part 1 — Weekly Review & Outlook (p. 3)

• Global equity index performance across regions

• GICS sector total returns

• Weekly commodity price changes

• Quarterly earnings: biggest beats and misses

• Top reporters by market cap, week ahead

• Takeaways from featured Weekly Inspiration articles

• Curated video and audio from Weekly Inspiration

Part 2 — Idea Generation (p. 13)

• S&P 500 stocks with the largest weekly declines

• Largest weekly declines among US stocks

• Stocks nearest their 52-week lows

• Key takeaways from curated analytical articles

• Featured spin-off opportunities

• Notable activist campaigns and acquisition proposals

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

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

• FINRA consolidated short interest

• Ranked by short interest as a percent of float

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

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

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

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

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

Part 3 — Market Valuation & Positioning (p. 29)

• Equity market value / GDP

• 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 returns and largest intra-year drawdowns

• Fama/French value spread — gap between cheap and expensive

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

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

Part 4 — Macro & Fixed Income (p. 45)

• 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

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

Enjoy this week’s Monday Morning Briefing.

Read more

Before getting to the data, a few words on the format itself.

The Briefing is built as a slide deck rather than a narrative report. Every page is a single vi…

Read more

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 four…

Read more