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

Constellation Software (Toronto: CSU) has compounded at roughly 30% a year since its 2006 IPO without issuing a single new share, and after falling more than 55% from its May 2025 peak it trades near 15x operating cash flow for a business generating more than twice the cash it did at the end of 2022. The 2026 software sell-off, in which several software ETFs lost more than 30%, treated every vendor as an AI casualty. Crossroads Capital calls that indiscriminate but admits nobody, itself included, can name the AI winners and losers in advance. Its answer is to own the allocator: a permanent-capital, Berkshire-like holding company of more than 1,100 vertical-market software businesses whose decentralized operators can keep buying the survivors as the evidence arrives, at prices the AI scare has lowered. In the first half of 2026 Constellation committed US$1.7 billion to acquisitions against US$1.08 billion of free cash flow available to shareholders, and the fund’s reconstructed return on all invested capital averaged ~17.6% over 2023-25. The fund built its position in February at an average cost of ~C$2,526, or 14-15x its forward estimate of that free cash flow, against ~50x at the 2025 peak. The watchpoint is recurring organic growth, which slipped to ~2% in constant currency in the second quarter; several quarters below 3% without one-off explanations would signal that AI is eroding the base rather than the narrative. Crossroads is long.

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Listen to the Latticework Monday Morning Call:

Ideas from our member newsletter

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

Close Brothers Group (London: CBG) is a UK specialist lender whose restructuring is running ahead of plan: FY26 adjusted operating profit of £120.3 million beat consensus by 8.4%, annualised cost savings came in at £36 million against an original £20 million target, management now promises more than £60 million by the end of FY27, and net loan growth turned from a 1% decline in 1H26 to 4% in 2H26. The beat came from costs (£430.9 million against £448 million expected) rather than margin; NIM was 6.9% against 7.0% expected, and credit impairments of £91.7 million ran above the £83 million consensus as Property-book provisions rose. Reported RoTE was 5.5% against 4.4% expected, with management guiding to double digits by FY28, and CET1 of 14.1% leaves about 380bps of headroom over the minimum. SeaPoint Insights reads the 15.5% share-price jump on results day as relief that no further motor finance provision was taken in 4Q, leaving the total at £318.5 million. That provision remains the main risk: the FCA redress scheme faces legal challenges, no FY26 dividend was declared because of it, and Viceroy Research’s March short report argued the top-up could run from £272 million to £932 million, which the company strongly disputes. The stock trades at 0.52x TNAV against consensus FY28 RoTE of 9.0%, an implied cost of equity of 17.4% versus 15.8-17.7% for OSB, Paragon and Shawbrook, so the discount has narrowed but not closed. The author also sees the group as a plausible takeover candidate once the redress costs and the Aldermore sale outcome are known.

Green Landscaping Group (Stockholm: GREEN) is a decentralised owner of 59 local landscaping, grounds-maintenance and winter-service contractors across Sweden, Norway, Germany, Finland, Lithuania and Switzerland, about 60% of whose revenue comes from public-sector framework contracts of three to five years with extensions to eight, and it has grown net sales from SEK 3,139 million in 2021 to a SEK 6,632 million run-rate at Q2 2026. Operators in smaller municipalities often hold quasi-monopoly status, route density lowers drive time per job, and ISO, bonding and union requirements keep small independents out of the larger tenders. Deals were done at 4.5-6.5x EV/EBIT with 20-40% of consideration as earn-outs tied to EBIT hurdles. The problem is debt: leverage reached 3.4x pro-forma EBITDA against a 2.5x internal ceiling, net debt including earn-outs, leases and minorities is SEK 2,859 million, acquisitions are paused, Norway posted negative EBIT in Q1 and a 4.1% margin in Q2, and the CEO of 11 years has left with an interim in place. The Hermit values the equity at SEK 41.59 a share in a base case (9% cost of capital, margins recovering to ~6.5%, 152% upside) and SEK 6.40 in a bear case where margins stay near 5%, with a path to zero if debt rollovers fail; by that arithmetic the price implies ~82% odds of the bear or zero outcomes. The Continental European unit earns 15-22% margins and Lithuanian renewals came in above segment averages.

OMS Energy Technologies (Nasdaq: OMSE) makes the conductor connectors, surface wellheads and premium-threaded casing that hold shallow-water and onshore wells together in the Middle East and Southeast Asia, holds $154.3 million of cash and restricted cash with no bank debt against a market cap of about $185 million, and generated $52.5 million of adjusted free cash flow on $155.9 million of FY26 revenue with capex of just $1.64 million. Specialty connectors were 61.6% of FY26 revenue, 95-99% of it from the Dammam plant to Saudi Aramco under a 10-year agreement running to 2033; premium threading under licences from VAM, Tenaris, JFE, Hunting and NOV Grant Prideco is the recurring, highest-margin line at 28.3% to 40%+ gross margin. Revenue fell 23.4% from $203.6 million in FY25 as Aramco call-offs normalised after an overlap between the old and new contracts, and the 12-month backlog dropped from $102.0 million to $60.7 million, which management attributes to timing between tranches rather than lost tenders; an $11.0 million Aramco call-off booked in March 2026 was the first replenishment. The Hermit, who spoke with senior management, counts the risks as Aramco at 57% of sales, zero minimum-volume guarantees, and a disclosed material weakness in internal controls. With cash at ~$3.60 a share and the stock near book value of $4.03, the author wants a dividend or buyback, puts base-case fair value at $9.72 (13% discount rate, revenue recovering toward $200 million at 21.5% operating margins, 126% upside), and a bear case at $3.50.

Braskem (NYSE: BAK) is a petrochemical producer earning its way through a restructuring: Q2 EBITDA was roughly $1.0 billion on the Hormuz-driven spike in polyethylene spreads, the Strait has stayed largely disrupted into Q3, and the 90-day creditor window that opened in late August closes around November 22. At the last count only about 40% of creditors had signed the plan. Braskem has sent terms that now include a debt haircut, absent from the original out-of-court proposal; creditors have reportedly asked the controlling shareholders for around $3 billion of fresh capital, and offshore bondholders again want a capital backstop from Petrobras, which says it expects a deal, will not raise its stake, but will “increase its support.” A court has also blocked transfers to the Mexican unit Idesa while talks run. Coherence Research sees three broad outcomes: a negotiated deal with limited dilution, which the stock is nowhere near pricing in; a deal with a meaningful equity component, where existing holders survive but are diluted; and a breakdown into judicial recovery, which Petrobras’ comments suggest nobody at the table wants. A fourth, less likely path is that strong spreads let Braskem build enough cash to weaken the case for a heavy restructuring. PE-naphtha spreads have averaged about $600/t this quarter against ~$770/t in Q2, close to double the ~$316/t consultants forecast, and the author estimates Q3 EBITDA of $550-700 million.

uniQure (Nasdaq: QURE) has in AMT-130 a Huntington’s disease gene therapy whose 36-month analysis, the timepoint the FDA said could serve as the primary basis of an accelerated-approval BLA, showed a statistically significant 75% slowing of cUHDRS decline (p=0.003) and 60% slowing of Total Functional Capacity decline (p=0.033), and three more high-dose patients reaching 36 months strengthened those to 80% and 67%. The stock sold off on the four-year data, where cUHDRS slowing fell to 44% (p=0.144) among twelve high-dose patients. Napkin Bios argues that number answers the wrong question: cUHDRS at three years is an intermediate clinical endpoint whose purpose is to predict later functional benefit, and the functional measure itself, TFC, still showed 61% slowing at four years (nominal p=0.008), against an updated ENROLL-HD natural-history comparator that by then appeared populated by slower progressors. The cUHDRS softening was driven by the SDMT cognitive test and the clinician-rated Total Motor Score, with one participant’s TMS reading having a material effect in a twelve-patient cohort. Dose response is the other underweighted fact: at 48 months high-dose completers had declined about 0.9 cUHDRS points against 1.9 for low-dose, a separation no flaw in the external control can manufacture. CSF NfL does not line up neatly (about 4% above baseline on high dose, 8% below on low dose), which the author acknowledges. The next test is the Q-Motor presentation at the EHDN congress plus imaging; convergence with TFC would make the four-year composite hard to read as lost efficacy.

Liquidia (Nasdaq: LQDA) sells Yutrepia for pulmonary arterial hypertension (PAH) and PH-ILD, the launch more than 15 months ago has produced roughly half of revenue from each indication, and the court ruling that went to United Therapeutics on two of six claims of the ’327 patent applies only to PH-ILD, so the PAH half is untouched whatever the remedy. The remedy is not yet set: Judge Andrews gave the parties a week to submit an agreed form of final judgment, Liquidia will ask the FDA to remove PH-ILD from the label so PAH treatment continues uninterrupted, and United will likely seek a permanent injunction and damages. Arquitos Capital argues a royalty is the rational outcome under the four-factor eBay test: United is still in the market, the judge earlier refused a preliminary injunction on the ground that money damages suffice, Tyvaso pricing has not eroded, and a documented share of patients cannot use United’s devices. A settlement is unlikely given United’s litigation record, so the judge may decide, which could take weeks to six months. The author had Liquidia on track for $1.4 billion of 2027 revenue at net margins near 50%; with PH-ILD removed, $700 million of revenue and $350 million of cash flow support a stock value of $44-55, and a 30% royalty on continued PH-ILD sales lifts that to $75-94. The twice-daily L606 formulation, due in 2030 or earlier if marketed to PAH only, could be worth at least the current market cap. Off-label PH-ILD prescribing has historically been covered by insurers. Arquitos calls today’s price a compelling entry point.

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

Articles worth your time

Who Gets Paid When AI Does the Shopping?, by Alex Immerman and Santiago Rodriguez, argues that AI shopping agents threaten the advertising and commission profits of marketplaces far more than their fulfilment businesses, and that Amazon’s 2025 advertising revenue of $69 billion, set against $34 billion of operating income excluding AWS, shows how much is at stake. At an assumed 70% contribution margin, advertising contributed more than Amazon’s reported operating income, so a layer that intermediates discovery attacks the most profitable line even if Amazon still packs the box. The authors offer two questions for any platform: how much incremental demand can an agent bring, and how much of the platform’s profit depends on controlling discovery and the customer relationship. DoorDash sits on the wrong side of the second: an agent can bring the restaurant a customer without routing them through the marketplace, pressuring commissions and ads even when DoorDash still handles the order. Shopify, Toast and Square sit on the right side, since they earn software and payments revenue rather than ads, and giving agents access to merchants’ inventory and checkout simply opens another channel. Instacart, with no comparable ad business to protect, has leaned in and reports that orders placed through its AI assistant include more items and exceed its typical basket value. The authors close on the open question: whether agents create new purchasing volume or merely redirect existing orders decides whose economics survive.

Before you fade Muse, use it for 72 hours, by Andrew Walker, tells value investors who dismiss consumer AI agents to download Meta’s Muse, give it email access and use it for three days before forming a view, because the skeptics he meets have not actually tried it. His own three days supply the evidence. Buying a new phone and AirPods, Muse found Amazon cheaper than Apple and saved ~$50, then found a better trade-in worth ~$200 more. He photographed a pair of pants; it identified the brand and found cheaper alternatives. Asked for undershirts, it searched retailers, loaded a JCPenney cart and, once connected to his credit card, checked out on its own. It compared Knicks ticket prices, built eight itineraries for a boys’ weekend in seconds, replaced his MyFitnessPal subscription with photo-based calorie logging and did the game reviews he used to pay Chess.com for. He then follows the money. If an agent price-compares every ticket resale fee, what happens to the sums Ticketmaster and StubHub pay Google to top a search for Knicks tickets? Retail brand loyalty erodes when the agent, not the shopper, picks the store; hotel booking is not far off, and the online travel agencies are absent from that scenario; small subscriptions lose their reason to exist when the agent does the job free. He is long Meta, in a small position, and expects that what the bleeding edge does with agents today is how everyone will use them in about 18 months or sooner.

Conceptual Gaps in How Investors Think About AI, by Mallika Paulraj, names five ways investors’ mental model of AI lags the technology, among them that enterprise agentic workloads went from near zero in summer 2025 to 64% of tokens used by summer 2026. The first gap is convergence: Gemini, GPT and Claude now perform within a narrow band, so the edge shifts to reliability and security, and capability can be copied through distillation. The second is scope: alongside interactive AI (a human asks, the model answers) and agentic AI (a human delegates an outcome), physical AI in vehicles, robots, drones and biomedicine is built on world models; she cites AMD paying $8 billion for Fei-Fei Li’s World Labs, valued at $3 billion two months earlier. The third is price: intelligence has fallen in cost about as far in five years as electricity did in 80 or DNA sequencing (a million-fold) in 20, so yesterday’s frontier capability erodes fast and Nvidia gives models away to sell chips. The fourth is geography: training stays centralised while inference moves to devices, local servers and regional and colocation facilities depending on the workload. The fifth is the one for allocators: AI demand is not the same as AI investment returns. A data-centre investment rests on the probability the facility actually gets built (permits, contractors, delays), the probability customers use that specific site, the asset economics of construction cost, operating expense and competitive longevity, and a capital structure whose debt terms decide what equity keeps. Being right about demand, she writes, is not the same as being right about the investment.

The Problem of Goliath, by Devendra Bambardekar, walks the reader through sixteen years of an Indian full-service brokerage’s decisions, from 2010 to 2026, to show why a well-run incumbent loses to a discount broker while making rational choices at every step. The thought experiment puts you in the incumbent’s chair. In 2010 a startup launches a ₹20 flat fee per trade against your percentage-based commissions; you ignore it. By 2014 it has 35,000 accounts, concentrated among active traders you are happy to lose, and matching its price would, in Bambardekar’s words, decimate the profit and loss statement overnight; besides, you cannot fire the research teams or dismantle the branch network, and as part of a listed group you cannot justify the margin cut to analysts. In 2015 the startup drops brokerage on delivery trades to zero, and its accounts grow from 70,000 in December 2015 to 200,000 in December 2016. The pandemic brings a wave of new retail investors and several more discount brokers, and by 2026 some of them out-earn you. The startup won by rewriting the rules: open-source technology with minimal infrastructure, word-of-mouth acquisition at near-zero cost, and fully digital Aadhaar-based onboarding. He frames this with Christensen: giants fail not through stupidity but because their financial models tell them to run away from low-margin business, and the remedy is a separate autonomous organisation with its own incentives, cost structure and customers, insulated from the legacy priorities. One peer did overhaul itself into a major discount player; the rest did not.

A €35 Million Loss — And What It Taught Us, by Reimar Scholz, dissects how Russian shares that cost about 2% of the portfolio, and had grown to roughly 5% through gains, became worthless almost overnight, a loss of about €35 million. Scholz lists four mistakes: underestimating the probability of military action, underestimating the speed and severity of sanctions, assuming political leaders act in their economic self-interest, and confusing “irrational” with “impossible.” The mechanism is what makes the case instructive. Liquidity vanished, market access disappeared and depositary receipts were suspended within days, so shares that looked extraordinarily cheap on conventional measures offered no protection; some risks are binary, and a stock can go from tradable to inaccessible with no intermediate price at which to sell. Two sizing lessons follow. Position size should be measured against current portfolio value, not historical cost, so a 2% purchase that compounds into 5% is a 5% risk; and he now spreads emerging-market bets more widely and takes some profits along the way, a deliberate departure from concentrating in the best ideas and letting winners run. Before any valuation work on a foreign holding he now asks whether foreign investors can enforce ownership rights, whether capital can leave freely, whether the legal system is predictable, whether sanctions could render the shares unsellable, whether the expected return justifies risks that cannot be diversified, and whether the position is sized so the firm survives a total loss. The question “can we survive being completely wrong?” comes before the model.

New in this week’s deck

We add eight charts on the economics of the AI build-out and the market around it, drawn mainly from Andreessen Horowitz’s research with underlying data from BofA, Vanguard, JPMorgan Asset Management, Citi, Citadel and Goldman Sachs. They cover hyperscaler forward free cash flow turning into semiconductor free cash flow, hyperscaler capex heading past $1 trillion a year, hyperscaler borrowing for the build-out, S&P 500 net margins heading for a record 17.5%, a record 93.6% of S&P 500 companies meeting or beating EPS estimates, the ~75% of public software companies that are profitable against the ~30% growing 20% or more, leveraged ETF assets near $200 billion with 61% in tech and semis, and asset-heavy stocks erasing a decade of underperformance against asset-light ones.

The deck

The full Monday Morning Briefing is available to members. It spans our weekly scoreboard, idea-generation screens (this week including quality names near their 52-week lows, micro-cap “tiny titans,” recent spin-offs, activist campaigns, superinvestor holdings, owner-operators, share-count shrinkers, and the broad US valuation 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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Listen to the Latticework Monday Morning Call:

Ideas from our member newsletter

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

Exor (Amsterdam: EXO), the Agnelli family holding company run by John Elkann, trades at a 57% discount to a pro-forma net asset value of ~€167 a share and has committed €500 million to a buyback that retires 3.5% of its capital. The interim report showed ~€1.2 billion of unlisted investment sales, about €5.90 a share, of which ~€750 million settles after June 30: debt and equity in the media business GEDI for €249 million, the proposed sale of Welltec for €488 million on Andrew Brown’s calculation, Lifenet for €209 million and assorted smaller pieces. Counting the ~€1.5 billion still to arrive from Iveco and Welltec, he puts Exor in net cash of ~€1.2 billion, which leaves scope for more retirement of equity while the discount persists; at these prices a €50 million disposal buys back €116 million of underlying value. His complaint is Lingotto, the externally managed vehicles that make up €21.30 a share, or 13% of attributable value, nearly 2.5x what remains of Stellantis, with disclosure he calls opaque; 13-F filings suggest the US holdings of its two main listed funds have gained ~9.5% since June 30, worth ~€1.53 a share of NAV. The discount, in his reading, prices the concentration in Ferrari, the opacity of Lingotto and the fear of a new ~€4 billion commitment in healthcare, where Elkann’s record is spotty.

Meta (Nasdaq: META) brings a consumer AI agent to ~3.6 billion daily users of its apps: Muse, released September 8, reached 2.8 million downloads in its first twelve days, a pace reportedly faster than ChatGPT’s, and Meta does not need the best model, only one within shouting distance of the free ones. The shares have risen 36% in a month to $748. Sanjiv writes the piece as a possible mistake of omission: on August 11 he declined to buy at ~$780 and named ~$550 as an entry point, the shares touched that level on August 18, and he did not act. Muse runs on Meta’s Muse Spark model and completes tasks rather than answering prompts: booking travel, shopping on Amazon or Shopify, ordering from DoorDash. The free tier allows 100 million tokens a week, with paid tiers at $20 and $100 a month, and one user reported that it found and bought an auto policy saving $3,500 a year in five minutes. He doubts consumers will pay $20 a month; the ultimate case is for sellers to pay Meta a small take-rate on the transactions Muse conducts. Amazon blocked the agent from its site on the day of writing, as it has other shopping agents, because agents ignore the advertising behind its ~$76 billion of annual ad revenue; Meta’s shares rose ~12% anyway. Rivals from Amazon to Apple may answer with agents of their own, so he calls the durability of Muse’s lead unclear.

Bellway (London: BWY) has compounded total shareholder returns at 12.9% a year since 1991, builds ~5% of the UK’s houses, and trades at 0.67x tangible book value, close to its 21-year low and against an average of 1.15x, and at a 33% discount to a liquidation value that counts only land, work in progress and cash less every liability. The UK housing downturn has run since 2019: completions are down 21%, house prices are 10% behind inflation since 2022, and Bellway’s adjusted earnings per share fell 56% from 436p in FY19 to an estimated 192p in FY26 as gross margins went from 24.6% to 17%. Gillen Markets, which is adding the shares to its Lump-sum Growth Portfolio, does not claim the bottom is in; 10-year gilt yields above 5% threaten affordability and planning consents remain slow. The case rests on what happens meanwhile: Savills puts land prices 10% below the 2021 peak, so the landbank is being replaced with cheaper plots, first-half gross margin edged up to 16.2%, and the company has bought back ~9% of its shares since FY22, with a new £50 million programme on top of the £150 million launched in late 2025. Adding the profit on 47,200 consented plots at £320k and a 16% margin lifts the liquidation value to £5.3 billion, a 55% discount, though the authors advise against leaning on it. At £21.08 the shares sit on 11x FY26 earnings, an assumed 75p dividend yields 3.6%, and net debt was £72 million in January against £506 million of cladding provisions still to be paid.

Formula One (Nasdaq: FWONK) holds the exclusive commercial rights to the F1 championship until 2110, has 18 of its 24 races contracted to 2030 or beyond, and more than quadrupled free cash flow from $0.19 billion in 2023 to $0.79 billion in 2025 as revenue grew 25% and margins widened. The shares are the non-voting Series C of Liberty Media’s Formula One Group, a tracking stock Liberty created after buying F1 in 2017; with the Braves, SiriusXM and Liberty Live since split off, it is Liberty’s primary remaining business. Over those two years revenue went from $3.57 billion to $4.48 billion, sponsorship fastest at 44% to $0.84 billion, and the operating margin from 7.9% in 2024 to 12.9% in 2025; Apple pays ~$750 million for US rights through 2030 and LVMH ~$1 billion over ten years as timekeeper. First-half 2026 revenue fell 8% after the Bahrain and Saudi races were cancelled over the Middle East conflict, yet first-half free cash flow still rose to $0.61 billion from $0.57 billion. The write-up, by Jacqueline Oh, a summer intern at Open Square, with the firm’s questions interleaved, acknowledges that the shares already trade at ~33x 2025 free cash flow. Goldman’s forecasts of $1.14 billion of free cash flow and $1.65 billion of adjusted OIBDA in 2029 give $150-165 a share on today’s multiples; MotoGP, bought in 2025 for $3.66 billion and breakeven on EBITDA, drags on the valuation, and the voting FWONA line trades 8% below FWONK for lack of liquidity.

Sabre (Nasdaq: SABR) is a turnaround with operating leverage: between 2023 and 2025 it cut technology costs from $951 million to $711 million and lifted operating income from $32 million to $295 million, Constellation Software has taken a ~12.7% stake, and three more years of 5% revenue growth at a 34-40% incremental margin would take adjusted EBITDA from ~$600 million to $750-777 million. Constellation has also put Vela chief executive Damian McKay on the board. Sabre’s Marketplace links airlines to travel agencies for booking fees, and replacing that embedded technology can disrupt an agency’s operations. GHGInvest credits the recovery and says a contrarian can reasonably buy before cash generation confirms it, since waiting can mean paying substantially more; the September refinancing, $1.35 billion of 9.875% notes due 2032, pushes maturities out. The author nonetheless watches rather than buys at $2.26. Management’s August outlook puts $475 million of cash interest against the ~$600 million of EBITDA, 79% of operating cash before reinvestment, and the author’s arithmetic leaves a funding gap of ~$0.8-1.0 billion through 2029. In the middle scenario, EBITDA grows 25% by 2029 but the multiple settles at 6.5x from ~8x today (the author’s own valuation of sustainable cash), which puts the shares at ~$2.40, or ~2% a year; the same operations at a different exit multiple return almost 24% a year, and one turn of multiple moves the value by $1.43 a share while three years of retained cash add $0.24. Screening prices are $1.15-1.32 at 20-25% required returns; second-half free cash flow near $81 million and the November 17 investor day are the named tests.

Wavestone (Paris: WAVE), a French consulting firm with 6,000+ professionals in 17 countries, has taken AI-related work from 8% of revenue in FY25 to 17% in FY26 and ~22% in recent quarters, and has a market cap ~€730 million with ~€120 million of net cash. The firm sits between strategy houses and integrators, designing transformations for tier-one European institutions and then implementing them; EDF and Deutsche Bahn are each 5% of revenue, Crédit Agricole 4%, financial services 33% in total and energy and utilities 18%. The author, who has worked in the sector, reads the unit economics from a daily rate of ~€938 and a utilization rate of ~71-72%, with personnel costs above €600 million, two-thirds of revenue; a 2-3 point recovery in utilization would flow almost straight to operating margin. Management’s 2030 plan, Lead the Shift, sets aside up to €100 million of organic spending on AI and up to €800 million for acquisitions, following AI Builders in France and Sand Cherry in Denver. On an 8.5% discount rate and 2% terminal growth, the base case, with organic growth accelerating to 5% and margins rising from 12% to 15%, gives €82.60 a share against €29.20; a bear case with growth near zero for two years and margins held at 10.5-11.5% still gives €61.68. The write-up grades the idea 8.5 of 10 and would not be surprised by a re-rating toward €60-75 as the AI share of revenue passes 25%.

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

Articles worth your time

Shall We Repeal the Laws of Economics - Part III, by Howard Marks of Oaktree Capital, takes the Treasury’s August decision to at least double its long-dated bond buybacks, from $2 billion to $4 billion per operation, as the latest attempt to override the laws of economics, and argues it treats the symptom. The 30-year Treasury closed above 5.3% on August 17, a 19-year high; the buybacks knocked yields down for a day, and when the first enlarged operation ran on September 9 at $6 billion, yields rose. Marks lists the causes the policy does not touch: PCE inflation of 3.7% in July against a 2% target, a deficit near 6% of GDP with unemployment at 4%, net interest above $1 trillion a year and more than the defense budget, and a multi-trillion AI buildout competing for the same capital. He does not expect default, since the debt is in a currency the US issues and the dollar still accounted for 57% of allocated reserves in the first quarter, but he expects the cost to arrive through the dollar, and he quotes Stanley Druckenmiller: a 30-year at 5.5% “isn’t a crisis. It is an invoice.” His prescription is behavioral, with higher top income tax rates, fewer preferences, spending growth held below GDP growth, and productivity from AI. To a friend who asked whether to sell his stocks, he said no: the problem is fiscal management, not US companies, and dollar cash and bonds carry the same risk.

Nobody Will Slow Down on AI (A Game Theory View), by Mauricio Heck, asks why the labs keep accelerating when the people building the technology say they want to slow down, and answers with a prisoner’s dilemma. Dario Amodei’s essay “We Must Pace the Frontier” drew a match from Sam Altman within hours and “Dario is right” from Elon Musk; a day later President Trump said whoever wins AI wins. Two labs, two choices: if the rival paces, racing gains ground, and if the rival races, you have to keep up, so both keep advancing even though both prefer restraint. Three features harden that equilibrium. Leadership feeds on itself, and once better AI helps build the next AI, a small temporary gap can become uncatchable. The corporate race sits inside the country race, and Amodei’s own essay concedes democracies can slow only as far as their lead over China allows. And a slowdown is hard to verify: a data center needs land, power and chips, but algorithmic gains leave no footprint, so a commitment is cheap talk. The two reasons for hope are warning shots, such as the ~700 of ~1,200 supposedly isolated OpenAI agents that hacked Hugging Face in July, and repeated games, where tit for tat wins because cheating today is punished tomorrow. The catch: if everyone believes the first to superintelligence wins for good, the repeated game collapses into a one-shot game, and the most useful thing left is uncertainty about how close the finish line is.

The Business of Building God, by Rohit Krishnan, treats OpenAI and Anthropic as the businesses they are about to ask public markets to value, and finds the moat is one, maybe two, models deep. Talent, compute and the usage data that flows back from coding traces and conversations have kept the frontier labs ahead of the open-source wave, but Chinese labs keep closing the gap, and a frontier attempt costs on the order of $1 billion each for a training run, data and talent, small money against the nearly $90 billion Facebook spent on the metaverse. Hence the push into adjacent markets: advertising on a billion-plus consumer base, robotics, wet labs for cancer research. Krishnan thinks those markets are far harder than they look, since few industries contain several $100 billion revenue businesses, and Meta launching Muse on its own model shows how each new segment fragments rather than consolidates. Meanwhile the customers behind $200 billion-plus of token spending are hitting wallet limits; CFOs want the benefit on the income statement, companies restrict top models to top users and route the rest to cheaper ones, and he himself stopped paying for the highest tier of every model some time ago. That leaves two paths: become a cloud company with compressing margins as DeepSeek, GLM and Minimax catch up, or persuade governments to shut out open models, which is hard to sell against a copyable file. Only recursive self-improvement, the true unknown, would make a moat durable.

Japan’s Value-Up All-Stars, by Naoki Ito of Verdad, measures what the Tokyo Stock Exchange’s March 2023 request for capital efficiency has done to valuations: the share of Japanese companies trading below 0.7x book has fallen from 31% to 16% in four years, and the share below 0.5x from 16% to 5%. The change is uneven by size, and the TSE is now turning its attention to the Standard Market, where the smaller deep-value names sit. When the exchange asked 43 institutions to name companies that had made real progress, Verdad contributed 17, all of which made the resulting list of 300, and the article walks through them. The pattern is explicit, funded commitments rather than slogans: Glory set a 4% dividend-on-equity floor and bought back 6% of its market cap last year, Aichi Steel is unwinding ~¥50 billion of securities to return more than ¥70 billion through 2030 against a ¥200 billion market cap, Nishikawa Rubber targets 8% DOE through 2030, and T.RAD lifted its DOE floor from 3% to 5% and re-rated from 0.3x to 1.5x book. KPP Group is the instructive exception: an 80% dividend increase and a 4% buyback produced a 42% dollar return over three years, yet the multiple stayed near 0.7x because book value per share grew 44%, on 28% growth in common equity and an 11% smaller share count. The article’s conclusion is that small- and mid-cap Japanese value is entering its most interesting period yet, as reform trickles down.

The deck

The 131-page Monday Morning Briefing is available to members. It spans our weekly scoreboard, idea-generation screens (this week including quality names near their 52-week lows, micro-cap “tiny titans,” recent spin-offs, activist campaigns, superinvestor holdings, owner-operators, share-count shrinkers, and the broad US valuation 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

“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 have never seen more valuable content in one place.” —Bill Coleman

“Worth its weight in gold.” —Shree Viswanathan

Subscribe now

Featured Events

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

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

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Ideas from our Weekly Inspiration newsletter

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

Barco (Brussels: BAR) holds a 46% global share in diagnostic displays and is the effective sole supplier of legacy control-room projection, yet trades at ~1.4x tangible book, its cheapest book multiple since 2011, after falling more than 70% from its 2023 high. Three bad years did the damage: hospitals and offices over-ordered during the supply-chain crisis and then ran down stock, China disappointed, ClickShare meeting-room sales kept shrinking, and in the first half of 2026 several large surgical-display contracts expired without replacement, taking the Healthcare division’s EBITDA margin from 12.5% to 2.9%. Group sales fell 8% to €418 million and the company posted its first net loss in years. Tangible Bruce argues the trough has passed: the order book rose to €568 million in June from €493 million at year-end, second-quarter sales and orders both improved on the first quarter, and management reaffirmed a full-year EBITDA margin of 11-12% against 6.2% in the first half. The shares yield 7.4% on the dividend and 5.9% on buybacks, tangible equity of €445 million sits under a €645 million market capitalization, and Chairman Charles Beauduin has bought ~€17 million of stock in 2026, lifting his stake to nearly 29%; Belgian law requires a mandatory bid for the rest at 30%.

Bolloré (Paris: BOL) trades at €3.64, a 57% discount to an adjusted net asset value of €8.48 a share, the same discount as three years ago on a market value per share that has since fallen 27%. Andrew Brown traces where the group’s €1.50 special dividend actually went: Compagnie de l’Odet, the 73.6% controller, paid €380 a share, and Bolloré receives €873 million directly, but a large part of the €2 billion the group describes as coming back sits in listed subsidiaries such as Compagnie du Cambodge and Plantations des Terres Rouges, where minority holders retain a call on the cash. He reads the botched 2024 squeeze-out of the Rivaud companies, whose second expert report the AMF disallowed, and the fall in Universal Music Group as the reasons discounts across the group are back at mid-2023 levels. His prescription for the next twelve months is a proper bid for the Rivaud minorities, roughly €250 million against ex-dividend market values of about €175 million, which would give Bolloré unfettered access to €3.2 billion of cash, followed by a clean-up of the Lagardère structure and a partner for Vivendi and UMG. He holds Odet and Lagardère rather than Bolloré itself.

Brookfield Corporation (NYSE: BN) has fallen ~11% since the end of June to a 52-week low while Ares, KKR, Apollo and Blackstone all rose, a ~21-point gap to its peer group in ten weeks, and now trades at a 43% discount to management’s own net capital value of ~$67 a share. James Emanuel, writing ahead of the September 17 investor day, separates the pieces. Carried interest accounts for ~$14 of the gap; it sits off the IFRS balance sheet because Brookfield recognizes carry only after a whole fund has returned its capital, ~80% of the $34 billion figure is prospective, capitalized at 10x target carry, and realized carry ran at ~$520 million over the past year against a $2.7 billion annual target. Strip carry out entirely and the shares still trade ~28% below the remaining assets on Brookfield’s own marks, which tells him the market is discounting the whole stack, above all the $191 billion insurance book, the credit exposure and a $28 billion real estate mark with no disclosed cap rate. The operating business is not the problem: distributable earnings before realizations rose 15% a share, fee-bearing capital reached $672 billion, up 19%, and the stock sells at ~15x trailing distributable earnings. His test is the buyback, $580 million so far in 2026 at an average of ~$42 against $96 billion of liquidity, and whether quarterly realized carry breaks above the ~$120 million level.

D’Ieteren Group (Brussels: DIE) owns 50.3% of Belron, the world’s largest vehicle glass repair and recalibration business, a stake worth €226 per D’Ieteren share at the October 2024 minority transaction price against a €170 share price, and a Belron IPO has become far more probable. The listing exists to give Clayton Dubilier & Rice’s 2021 vehicle an exit rather than to sell down the family’s stake; Andrew Brown, an owner for more than three years from €82, notes that Belron’s operating profit should reach ~€1.6 billion this year from €1.37 billion in 2024 on revenue above €7 billion, so the multiple implied by the D’Ieteren price stays below 15x forward earnings. The rest of the group is the problem: Moleskine consumed €506 million of equity, the 40% stake in TVH would struggle to fetch its €1.17 billion entry price, the Belgian VW franchise faces a ~40% EBITDA drop in 2026, and only the parts distributor PHE, with operating profit moving from €232 million in 2023 to ~€310 million, has pulled its weight. On a Belron IPO at €35 billion of enterprise value, 10% above the last transaction, he puts the shares at a 44% discount to net asset value and sees upside toward €200; his caution is that once investors can buy Belron directly, D’Ieteren’s discount will be set by the other businesses and by Nicholas D’Ieteren, who owns more than half the company.

Roblox (NYSE: RBLX) has lost 62% over twelve months while revenue grew 41%, and its shares rose 11% in a day after the Roblox Developer Conference gave analysts an answer to where the next leg of growth comes from. The near-term numbers have not moved: bookings are expected to be flat this year, third-quarter bookings are modeled down 16%, profits are set to fall by a third, the core kids’ market shows signs of saturation, and management has withdrawn annual guidance, calling it “not a helpful tool for investors.” What changed, in SuperJoost’s reading, is the pipeline. “Roblox Everywhere” will make every experience playable in a browser and let creators ship standalone PC and mobile apps on Roblox’s infrastructure with the same in-app economics; players over 18 are a third of daily users but spend twice as much, with the 18-34 cohort up 42% and its playtime up 37%; and a prompt-based creation tool used by more than 100,000 people in alpha is now open to every creator. None of it affects 2026, and BTIG, Wedbush and Roth raised their price targets anyway. The piece reads the conference rather than valuing the stock.

SoftBank Group (Tokyo: 9984) is the clearest listed barometer of AI sentiment outside US mega-cap tech: ARM, net of a $21 billion margin loan, is nearly half of gross assets and trades at 55x March 2029 consensus earnings, and OpenAI, a $100 billion exposure with another $10 billion due in October, is ~22%. Andrew Brown, who has followed the company for seven years and holds no position, sets the current run against the record: the shares rose 38% in six trading days to September 9 and nearly five-fold from their April 2025 low, the average daily move in 2026 is 4.3%, and on more than 7% of trading days since March 2025 the stock has moved more than 10% in a day, for a company valued at ~$243 billion. The trigger was the S-1 for SB Energy, the data-center and generation business, which shows ~$140 million of annualized revenue, a $640 million operating loss and $1.8 billion of debt, with OpenAI as the anchor tenant and NVIDIA as the exclusive supplier, at a rumored $50 billion valuation. He estimates NAV has fallen ~20% since the June quarter on dollar weakness against the yen, leaving a 35% discount against a ~47% average since 2020. His comparison is early 2000, when the shares doubled in a month and then lost 98% by October 2002; this cycle carries less gearing, so the fright may be smaller.

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

Articles worth your time

Buffett Completes Succession Plan, by Ravi Nagarajan, takes Warren Buffett’s move to Chairman Emeritus, with Howard Buffett as Chairman and Greg Abel as CEO, as the end of the succession and the start of three open questions. The first is capital allocation: the repurchase program still lets the CEO buy back stock only “after consultation with the Chairman,” language written for a Chairman named Warren Buffett, and it needs restating for Abel. The second is voting control: Buffett’s remaining shares will be fully distributed to family foundations by 2034, and those foundations sell, so the family’s voting influence ends within the decade. The third is the $360 billion of cash, which Nagarajan finds “very difficult to justify” without Buffett’s optionality behind it; he expects Berkshire to be paying a small regular dividend, possibly with specials, by the end of the decade. Abel’s first months support the case for continuity: the Taylor Morrison acquisition closed in July and repurchases resumed in the second quarter. Whether Munger’s “seamless web of deserved trust” survives to mid-century depends, in his view, on shareholders giving Abel the room to run the company the old way.

Interest Rates and Stock Prices: An Old Debate Resurfaces!, by Aswath Damodaran of NYU Stern, asks why the ten-year Treasury yield rose from 4.18% to 4.75% in 2026, with the 20- and 30-year above 5%, and why stocks did not fall with it. His answer to the first question is fundamentals rather than the Fed: the intrinsic risk-free rate, expected inflation plus real growth, stood at 5.41% in early September against an actual 4.75%, the gap has been closing since 2022, and the four FOMC meetings of 2026 left no visible mark on long rates. On the second, on days the ten-year rose more than three basis points the S&P 500 fell ~0.5% on average, yet the index held up because consensus earnings estimates for 2026 and 2027 both rose more than 11%, which offset the higher discount rate. The effect is uneven: energy led on oil, technology returned 25% in aggregate but only ~8% at the median company, and consumer discretionary, utilities and communications lagged. His conclusion is that the rate shock happened in 2022, businesses have adapted, and the ten-year stays in a 4-5% range unless inflation expectations move.

MetaMaterials and Nextbridge Hydrocarbons - a retail fleece for the ages, by John Hempton, reconstructs how retail investors lost more than $100 million on a preferred share whose whole purpose was to be cancelled. MMTLP existed to distribute shares of Next Bridge Hydrocarbons, the speculative oil and gas leases left over from Torchlight Energy. A December 7, 2022 press release said holders at the close on December 8 would receive the distribution, that purchases after that date forfeited it, and that the shares would be cancelled on December 13; with T+2 settlement, a trade on December 9 could not settle before the security ceased to exist, so the “trading halt” was arithmetic, not a FINRA plot to protect short sellers. Some 85 million shares traded in 47 days and the last 20 sessions closed above $6.90, driven by a squeeze narrative that the SEC later found Torchlight’s executives had orchestrated; the former CEO had tweeted the deadline nine days ahead. The buyers received shares in a company Hempton judges effectively insolvent, then persuaded 74 members of Congress to investigate FINRA. His verdict spares nobody: the executives manufactured the story, and the buyers did no work.

Why Ambitious Investors Fail, by Reimar Scholz, argues that the intelligent, driven investors who close their funds after a few disappointing years fail not for lack of brainpower but because they hunt winners instead of eliminating errors. He proposes reversing the question from “why will this succeed?” to “what could prevent it?” and running the balance sheet, cyclicality, earnings quality, dilution and valuation before the upside case, the opposite of the typical pitch where the risks come last. The other failure modes are behavioral: constant price-checking turns a long-term investor into a reactive trader, and analysts who feel obliged to act take mediocre positions without conviction when a genuinely compelling idea appears perhaps once a year. His practical answers are small starting positions that leave time to learn, an investment journal to stop memory rewriting the original thesis, and one test of conviction: if a falling price does not make you want to add, the thesis was never really formulated. Twenty years of beating the S&P 500, he says, came from surviving his own mistakes long enough for the sound decisions to compound, not from finding the next Nvidia.

The deck

The 124-page Monday Morning Briefing is available to members. It spans our weekly scoreboard, idea-generation screens (this week including quality names near their 52-week lows, micro-cap “tiny titans,” recent spin-offs, activist campaigns, superinvestor holdings, owner-operators, share-count shrinkers, and the broad US valuation 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

“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 have never seen more valuable content in one place.” —Bill Coleman

“Worth its weight in gold.” —Shree Viswanathan

Subscribe now

Featured Events

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

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

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

Ideas from our Weekly Inspiration newsletter

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

NVIDIA (NASDAQ: NVDA) has been one of the worst-performing large US chip stocks in 2026, behind Micron, Marvell, Intel and AMD, while management guides to ~70% revenue growth in FY28 on a supply-constrained basis and has visibility into more than $1 trillion of cumulative Blackwell and Rubin revenue through 2027. Aurelion Research, writing after a post-earnings conversation with the company’s investor relations team, argues the laggard status is unjustified: inference is now a larger workload than training after the two were roughly balanced 18 months ago, AI clouds, industrial and enterprise customers already account for about half of data center revenue, and the physical AI business is running at $10 billion a year. The risks the market is pricing are real, among them memory costs pulling Q4 gross margin to 71-72% from an expected ~74%, custom silicon from Broadcom and OpenAI, and the question of whether hyperscaler capex earns a return, but at ~18x forward earnings the authors think they are more than priced in.

Deckers Outdoor (NYSE: DECK), owner of HOKA, UGG and Teva, trades at ~11x guided earnings after a ~60% fall from its late-2024 peak, with a net cash balance sheet. Revenue and EPS compounded at 13% and 30% a year from FY17 to FY26 in close to a straight line, and the share count fell nearly 30% over the same stretch as management put about two-thirds of free cash flow into buybacks. The de-rating came from HOKA slowing from 20%-plus growth to ~10%, a pre-tax earnings dip on higher SG&A, tariffs, and a starting multiple above 30x. Value Don’t Lie frames it as a “busted GARP” name: over 20 years the stock has traded at 14-18x earnings, the better footwear peers sit at 10-15x, and 3G paid ~15x for Skechers in 2025, a business with the same net cash, a similar wholesale mix and the same international growth story. On FY27 guidance of $7.35-7.50 in EPS, 16x gives ~$120 a share; a punitive 7x on a $7 miss gives ~$49. The author has no position and is keeping the name on a watchlist.

Shurgard Self Storage (Brussels: SHUR), Europe’s largest self-storage owner with 335 stores across seven countries, trades at about 43% of its €54 per-share net tangible assets, having listed in 2018 at €25 against NTA of €24. Guy Davis argues that the 17 analysts covering the stock are focused on the wrong thing, a revenue-growth guidance cut to 3.5-4.5% and the removal of 2027 targets, rather than on hard-to-replicate assets at a 57% discount with a 23.7% loan-to-value ratio, €795 million of liquidity and the only investment-grade rating in European storage. Blackstone’s late-2025 talks over Big Yellow took place around NTA, Europe has 0.3 square feet of storage per capita against 7 in the US, and a comfortably covered 5% dividend pays the holder to wait. Public Storage owns ~35% and the New York Common Retirement Fund a third, which makes a third-party takeover harder. His base case, the price moving from 43% to 80% of a flat NTA over seven years plus the dividend, compounds at ~12% a year, and he went from first look to buying within 48 hours.

Flitto (KOSDAQ: 300080) sells non-Western-language translation data, built over 14 years by 14 million users, to Microsoft, Amazon, Google, Meta, Baidu and Alibaba, and grew revenue 77% in 2025 to ₩36 billion while turning its first operating profit. In late June two supply contracts with its largest customer were upsized from a combined ~₩14 billion to ₩31.6 billion, a figure approaching all of last year’s revenue, and the disclosed backlog at June 30 stood at ~₩28 billion; booked first-half revenue plus backlog already covers about 80% of Smoak Capital’s ₩51.5 billion revenue estimate for 2026. Smoak expects earnings to more than double to ~₩17 billion, which puts the shares at 8.7x estimated 2026 earnings and 2.6x EV/revenue, against 7-10x revenue for listed AI training-data peers in more crowded niches. The Q1 operating loss that sank the stock reflected deliveries idling ahead of the new orders, and Q2 alone came in at ₩8.1 billion of revenue with a 17% operating margin. One customer accounts for more than 45% of revenue.

Applied Co. (Tokyo: 3020) is a regional Japanese PC retailer and systems integrator whose net cash and securities cover roughly half of its ¥12 billion market capitalization, which leaves the operating business at ~1.5x EV/EBIT and ~5.5x forecast earnings. The company earned a 17.6% return on equity in FY26 while carrying all that cash, against 10% at BIC Camera and 4% at Yamada, because it sells PCs bundled with setup, data migration, security and support and runs a far leaner SG&A line than the big chains. The more interesting half of the business sells workstations, HPC and AI systems to universities, government agencies and corporates; Applied is one of 53 NVIDIA partners in Japan and lists more than 700 HPC deployment case studies. Altay Capital, which has owned the shares since early 2023 and recently added, points to Bain’s take-private of the larger peer MCJ at ~7x EBITDA earlier this year; at that multiple Applied would be worth ~¥12,000 a share, about 2.6x the current price. The founder’s family controls 52%, which rules out activism but keeps a buyout in play, and average daily volume is under $50,000.

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

Articles worth your time

‘Death of the Brand’ or dearth of thought?, by Django Davidson of Hosking Partners, revisits a 2017 speech that called the quality-compounder consensus a cognitive bubble and reports the result. Anheuser-Busch and Kraft Heinz both peaked above 7x trailing EV/sales in July 2017, a multiple that implied software margins for beer and cheese, while Alphabet traded at 5.5x. Hosking bought Costco, Kroger, Walmart and Tesco at 0.5-0.8x sales instead; that basket has returned 245% since, against 0% for Nestlé, Unilever, Diageo, Kraft Heinz, Anheuser-Busch and Clorox. His explanation is the capital cycle rather than any special insight: seventy years of TV-advertising dominance ended with social media, over-priced brands handed retailers a private-label umbrella where margins run 1-2.5x higher, and investors outsourced their thinking to a Buffett halo and a story that was easy to sell.

Small Caps in 2026: The Lottery & the Leftovers, by Daniel Rasmussen and Chris Satterthwaite of Verdad, shows that the past year’s small-cap rally was a lottery drawing rather than the revaluation value investors have waited two decades for. The Russell 2000 returned 37% against 23% for the S&P 500, but 32 points of the small-cap return came from multiple expansion, the gains were concentrated in loss-making biotech and story stocks, and high-yield spreads barely moved. Since 2013, 61% of the small-cap universe is new, and the loss-making share has risen from 13% to roughly 40%. With spreads in their tightest quintile since 1989, small caps have historically gone on to trail large caps by nine points over the following year. The part of the market they find intact is the profitable half: a median 9.5x EV/EBITDA against 15.1x for profitable large caps, a 37% discount versus an 11% norm, with the cheapest quintile still at 4.7x after a 41% year.

Why Cheap Is Often Better, by Reimar Scholz, explains why an investor who came to listed equities from private-company turnarounds keeps returning to small, neglected, statistically cheap companies with survivable problems, usually below €300 million in market capitalization. The empirical case is the familiar one from Tweedy, Browne, Greenblatt, Gray and Carlisle, and his own approach has beaten the DAX by a wide margin without finding the next Nvidia. The practical points are sharper: a machinery maker serving pharma trades at twice the multiple of an identical one serving an unfashionable sector, foreign markets such as Japan strip away the home-market prejudices that pass for knowledge and force you to start with the numbers, and a low entry price reduces the number of things that must go right. He is explicit that cheap is not a thesis by itself: balance sheet, cash conversion and a survivable downside come first.

The Surface Area for Luck, by Todd Wenning of KNA Capital Management, uses Sham, the racehorse born the same year as Secretariat, to argue that good companies widen their exposure to good luck. FedEx survived on a $27,000 blackjack win, Amazon sold $672 million of convertibles three weeks before the dot-com crash, and Novo Nordisk found GLP-1’s appetite effect while studying blood sugar. His examples from the portfolio are Games Workshop’s Amazon series and Halma’s $20 million purchase of Photonics, which fifteen years later serves a single customer worth ~19% of group revenue as AI demand surged. Companies that build consumer surplus, allocate capital well and treat stakeholders decently accumulate option value the market has not priced; companies that squeeze customers for short-term profit build an off-balance-sheet liability. The counterexamples cut both ways (GameStop, Arthur Andersen), which is why he accepts that a portfolio hunting for Secretariats will hold some Shams.

Druckenmiller Unbound, by Harvey Sawikin of Firebird Management, takes Stanley Druckenmiller’s admittedly AI-written Wall Street Journal op-ed on Treasury buybacks as a case study in what machine prose leaves out. The piece is logically organized and clearer than its author would have managed, and it is also bloodless: no stories, no humor, no use of five decades of trading experience, and no mention that Druckenmiller was publicly short Treasuries in January. Sawikin, who has written a monthly investor letter since August 1998 and refuses to hand one to a model, rewrites a paragraph in the Druck voice to show the difference, then reprints his guide to fund-manager prose: the passive voice for excuses, “staggering” for the Russell’s underperformance, and “huge” as a signal you will lose half your money and “massive” that you will lose it all.

The deck

The 134-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

“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 have never seen more valuable content in one place.” —Bill Coleman

“Worth its weight in gold.” —Shree Viswanathan

Subscribe now

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)

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.

Feedback on the Briefing

“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 have never seen more valuable content in one place.” —Bill Coleman

“Worth its weight in gold.” —Shree Viswanathan

Subscribe now

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)

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

The 125-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

“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 have never seen more valuable content in one place.” —Bill Coleman

“Worth its weight in gold.” —Shree Viswanathan

Subscribe now

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)

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

“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 have never seen more valuable content in one place.” —Bill Coleman

“Worth its weight in gold.” —Shree Viswanathan

Subscribe now

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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Ideas from our Weekly Inspiration newsletter

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

The intrinsic value of Uber (UBER) kept compounding while the stock did not, leaving a fair value near $118 against a recent price of $78. Gross bookings rose 19% to $193.5bn, a fifth straight year of 20%-plus constant-currency growth; free cash flow climbed 45% to $10.0bn; and GAAP operating margin nearly doubled to 11%. Uber One passed 50 million members, who spend roughly 3x more than non-members, while advertising reached a $2.5bn run rate growing ~50%. Wolf of Harcourt Street trimmed his terminal free cash flow margin from 29% to 25% because Uber is no longer purely asset-light, committing $1.25bn to Rivian and assembling more than 30 autonomous-vehicle partnerships as Waymo unwinds exclusivity in Phoenix, Austin and Atlanta. Even halving terminal value in a stressed autonomy case leaves him near $81, which suggests the market already discounts much of that risk.

Alphabet (GOOGL) fell 4% on senior management changes that investors read as evidence it is losing the frontier-model race. Demis Hassabis stepped back from day-to-day AI research to become Alphabet’s chief scientist, and veteran engineer Jeff Dean left with three colleagues to found Discovery Loop, with Google as a founding investor and cloud partner. Sanjiv thinks that reading is misplaced: the prize in the frontier-model race may be smaller than assumed, because foundation models are commoditizing as capable and cheap Chinese entrants proliferate, and because Gemini already reaches a billion users on distribution rather than benchmark leadership. The value, on this view, accrues to the applications and agent harnesses built on top of the models, a race in which Alphabet’s own chips, cloud, models and consumer distribution leave it as well placed as anyone.

Shift4 Payments (FOUR) trades near 8x earnings and 7x EBITDA after falling 65% from its 2025 high, with revenue still growing above 20%. The company is a roll-up in complex card-present processing, serving restaurants, hotels, stadiums and entertainment venues rather than the single-location merchants Square and Toast compete for, and it has spent ~$3.7bn on acquisitions since its 2020 IPO to take revenue from ~$760m to ~$5bn. The catch is that earnings are not keeping pace: 2026 guidance implies ~2% EPS growth and outright declines in the second half, and the mid-2025 Global Blue deal lifted net leverage from 2.4x to 3.6x, with a further $316m acquisition already disclosed. Value Don’t Lie frames fair value near $77 on 2027 earnings of $6.30 at 12x against a downside near $33, a 3.5x ratio, but is watching rather than buying until earnings and free cash flow turn back up.

LyondellBasell (LYB) cracks ethane on the US Gulf Coast, leaving roughly 80% of its ethylene capacity on advantaged feedstock against naphtha crackers in Europe and Asia priced off crude. Second-quarter EBITDA came in at $2.1bn, more than triple the first quarter, on adjusted earnings of $4.30 per share against $3.41 expected. Management estimates ~6 million tons of Middle Eastern polyethylene capacity is damaged and will not return before 2027, taking net global supply additions for 2026 close to zero. The market paid $84 in March in anticipation of that supply shock, before any of it reached reported numbers, which is the basis for Lasse’s view that a re-rating toward $80 requires nothing new to happen. He holds the shares but cautions that the ~$1.4bn of working capital built in the first half reverses precisely as reported earnings fall, so profit and cash flow will move in opposite directions for two or three quarters, and that this is now a fair price for a good business rather than the deep-value entry it was last autumn.

Interlife General Insurance (Greece: INLIF) trades near 0.8x book and 4.5x earnings despite compounding its share price at 22% a year for more than a decade. The Greek insurer earned €27.7M in 2025 for an 18.8% return on equity, and its expense ratio of ~27% runs several points below the market’s, a structural cost advantage Iggy on Investing sizes at 8 to 10 points once the business mix is stripped out. Reported motor combined ratios above 110% are mostly prior-year reserve top-ups rather than current underwriting, so the reported figure should converge toward the ~105% current-accident-year number as the catch-up ends. Against a ~€128M market capitalization the company holds roughly €80M of equities, €220M of bonds and €35M of real estate. He models a ~13% IRR if the multiple never moves, and closer to 20% if the re-rating Greek banks have already enjoyed finally reaches it.

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

Articles worth your time

The Situational Awareness Fund Blow-up: Collateral Damage from Investment Conviction!, by Aswath Damodaran of NYU Stern, uses one fund’s collapse to ask whether investment conviction is a virtue at all. Leopold Aschenbrenner’s fund was up almost 450% through late June on a levered bet that AI would win big and win soon; over four weeks in July its public equity holdings lost more than two-thirds of their value and it was forced to liquidate, with Citadel buying almost all of the portfolio. Damodaran breaks conviction into three beliefs that must all hold at once: that your estimate of fair value is better than the market’s, that the market will correct, and that it will correct inside your holding period. Leverage is what converts a wrong holding period into ruin, because it truncates the horizon and removes any chance of later vindication. His closing distinction is between smart money, which credits every basis point to its own brilliance, and humble money, which concedes how much was simply being in the right place.

The Stupidity of Crowds?, by Harvey Sawikin of Firebird Management, traces how retail participation made the US market harder to beat, and asks whether gamification is quietly undoing that. Working from Value Line binders in 1992, he applied Graham’s criteria, a P/E of 10 or below, some dividend yield, current assets double current liabilities, long-term debt below net current assets, and outperformed immediately. The reason, in hindsight, is that active mutual funds averse to even a couple of quarters of underperformance left whole sectors sitting at bargain prices, defense ahead of the Clinton election and financials after the early-1990s crisis among them. By the late 1990s it had stopped working. His explanation is not that professionals arbitraged the anomaly away but that online brokerage accounts grew from 100,000 in 1992 to 18 million by 2000, and those traders, free of career risk, priced mistakes away within a year or two. The open question is whether a herd trained to chase whatever looks hot, with leverage, restores the inefficiency.

Technological Leadership and Déjà Vu, by Michael Pettis, warns against confusing a country’s technological leadership with the sustainability of the economic model financing it. He opens with a passage predicting that a rival power’s products will dominate the future, then reveals it is not about China at all but the January 1989 Time cover on Japan, published less than a year before Japan entered decades of adjustment. The mistake in the 1980s was not exaggerating Japanese achievement, which was real, but assuming the achievement validated the investment model behind it. Under soft budget constraints, production costs still count toward GDP even when the value created falls short of the resources consumed, so measured output and debt both rise while national wealth may be falling. Excessive investment is entirely consistent with better infrastructure and more advanced factories, which is why pointing at China’s electric vehicles, batteries and high-speed rail does not answer the question that matters.

Why Berkshire Hathaway’s $4.5 Billion Buyback Matters More Than Its $25.7 Billion Profit, by Anh Hoang, reads Berkshire’s largest buyback since 2021 as Greg Abel’s first public statement of what he thinks the company is worth. The doubled net income was largely $12.7bn of mostly unrealized investment gains plus a favorable currency swing; strip foreign exchange out of both periods and operating earnings grew about 5%, not 16%. The buyback is different, because Berkshire’s policy permits it only below a conservatively determined estimate of intrinsic value, which makes it a paid opinion rather than a press release. His two-column valuation lands between roughly $483 and $527 per Class B share against June’s average repurchase price of $488, closer to fair value than to an obvious bargain, and the 0.43% of shares retired adds only about four basis points to per-share value even at a 10% discount. He also flags GEICO, where the combined ratio deteriorated from 83.5% to 91.2% as commissions and advertising pushed the expense ratio to 14.6%.

New in this week’s deck

This week’s deck gains a fifth section, International Markets, which now gathers every non-US country screen at the end of the book, along with new screens across the rest of the deck.

• Superinvestor holdings lists stocks that two or more tracked value managers bought last quarter and which now trade below their quarter-end price.

• Owner-operators ranks US companies whose insiders own at least 20% by cheapest EV/EBIT.

• Stock-based compensation sets S&P 500 grants against reported free cash flow, in dollars and as a percentage.

• REITs at undepreciated cost ranks US equity REITs by enterprise value per dollar of property at original cost, which sidesteps the accumulated depreciation that makes price-to-book rank vintage rather than value.

• Factor scoreboard sets the Fama-French five factors and momentum against seven return horizons.

• Global equity valuation ranks about 40 country markets against their own ten-year average P/E.

• European REIT discounts measures share prices against disclosed EPRA net tangible assets, a comparison US REITs do not disclose.

• India and Sweden join the country valuation screens.

The deck

The 116-page Monday Morning Briefing is available to members. It spans our weekly scoreboard, idea-generation screens (this week including quality names near their 52-week lows, the quality-compounders and dividend screens, long-run valuation bands for individual companies, micro-cap “tiny titans,” recent spin-offs, activist campaigns, superinvestor buying under pressure, owner-operators with meaningful insider stakes, stock-based compensation against free cash flow, and REITs against undepreciated property cost), market valuation and positioning, the macro and fixed-income picture, and equity valuation screens across international markets (this week 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 as the format continues to evolve.

Feedback on the Briefing

“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 have never seen more valuable content in one place.” —Bill Coleman

“Worth its weight in gold.” —Shree Viswanathan

Subscribe now

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 (new this week)

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

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

• 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 ex-financials and ex-REITs: stock-based compensation vs. reported free cash flow (new this week)

• 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 (new this week)

• 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

• World equity market cap / world 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 (new this week)

• 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

• Ranked by discount to each market’s own 10-year average P/E (new this week)

• Ranked by discount of share price to the company’s own disclosed EPRA NTA per share (new this week)

• 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 (new this week)

• Sweden equity valuation screens (new this week)

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)

Share Latticework by MOI Global

Enjoying Latticework? Help us make it even more special.

• Share Latticework (simply click the above button!)

• Introduce us to a thoughtful speaker or podcast guest

• Be considered for an interview or idea presentation

• Volunteer to host a small group dinner in your city

• Become a sponsor of Latticework / MOI Global

Volunteer by reaching out directly to John (john@moiglobal.com).

Read more

Ideas from our Weekly Inspiration newsletter

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

Wolf of Harcourt argues that after a 41% drawdown driven by two 2026 guidance reductions, the market prices Adyen (Amsterdam: ADYEN) for an overly pessimistic trajectory. FY25 delivered 21% constant-currency revenue growth, a 53% EBITDA margin ahead of target, and 87% FCF conversion; a ten-year DCF at a 14% revenue CAGR yields EUR 1,302 of fair value against roughly EUR 885 today. Competition from Stripe and PayPal, and further guidance cuts, remain the principal risks.

Polymath Investor makes the case for BioSyent (Canada: RX), a specialty pharma with no research risk and no patent cliff, with 63 profitable quarters and a revenue CAGR of nearly 20% over more than a decade. The Oral Science acquisition at 6.3x trailing EBITDA and the newly approved Thyconvi cut FeraMAX to ~40% of revenue, adding growth pillars the market has yet to credit. At 19x earnings and a 7.6% FCF yield, disciplined buybacks and ~20% CEO ownership support the thesis.

Reimar Scholz describes The Property Franchise Group (UK: TPFG), the country’s largest franchised estate agency network, as converting local entrepreneurship into capital-light, recurring royalties: roughly 70% of earnings come from franchising, and 70% of those fees from lettings rather than cyclical house sales. Adjusted EPS has compounded near 23% annually since 2013, on 45% EBITDA margins and returns on capital above 20%. At a GBP 287M market cap and 1.9x book, with a 3% share of a fragmented market, the shares appear undemanding.

James Emanuel views Universal Music Group (Amsterdam: UMG) as a compounding intellectual-property royalty engine mispriced after a post-earnings selloff: at EUR 14.54 the market values the business near EUR 26 billion, roughly half the EUR 54 billion Pershing Square offer the board rejected three months earlier. Downtown integration expenses create transitory margin pressure, yet second-quarter revenue grew 13.3% and EBITDA margins held at 20.5%. Management’s EUR 500 million buyback above current prices underscores the disconnect.

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

Articles worth your time

The Value of Consistency, by Howard Lichstrahl, argues that consistency and the avoidance of unrecoverable loss, not episodic brilliance, produce top-percentile results. His central example, drawn from a 1990 Howard Marks memo, is a pension manager who over fourteen years never ranked above the 27th percentile or below the 47th in any single year, and finished the full period in the fourth percentile. The arithmetic underneath is familiar and easy to ignore: recovering a 50% loss requires a 100% gain. Howard extends the point to balance sheets, preferring businesses funded by internal cash flow over those dependent on capital markets, with Silicon Valley Bank’s duration mismatch as the cautionary case.

Did Situational Awareness inflate the AI bubble?, by Andrew Walker, works through the implosion of a hedge fund that reportedly gained near 500% in six months and then fell 85% to 90% from its peak, and asks whether forced selling creates bargains. His answer is usually not: Archegos holdings kept falling for years after that liquidation even as the market rose, because the selloff signaled genuine capital misallocation rather than a technical dislocation. He cites Goldman’s estimate of 1.2 million monthly margin calls in South Korea, about 3% of the adult population, as a measure of how far the leverage has spread.

China and the Iran War Oil Shock That Wasn’t, by Jordan Schneider and Phoebe Chow, asks why the closure of the Strait of Hormuz never produced the $200 oil that analysts forecast. The answer is not Western policy: prices rose roughly 60%, with physically delivered barrels reaching $130 to $140 in the hardest-hit regions, and SPR releases ran at 1.4 million barrels a day, above expectations but far short of the shortfall. What closed the gap was China’s unexplained cut of about five million barrels a day of imports, drawing on a stockpile the West can neither see nor influence.

SpaceX, PE, VC, and Quacking Ducks, by Harvey Sawikin, argues that fund managers raise capital precisely when demand peaks and valuations are worst, systematically destroying limited partner returns whatever the fiduciary language says. His illustration is ARK Invest, which he calculates destroyed $14 billion of shareholder wealth over the ten years through 2024 despite headline returns: the flagship gained 150% in 2020, drew $30 billion of inflows, then fell 67% in 2022. He extends the pattern to venture, where SPV co-investments let managers grow assets by re-marking portfolio companies upward, saturating limited partner exposure prematurely.

New in this week’s deck

We extend our coverage with new slides featuring “key takeaways” from selected videos and podcasts — based on feedback from fellow member Pedro Zuloaga; thank you, Pedro! This week’s set runs from and Jeffrey Gundlach on the yield curve to Bob Robotti on North American gas, David Heinemeier Hansson on staying small on purpose, and Michelle Knudsen on the NYU endowment, and more.

The full deck

The 97-page Monday Morning Briefing is available to members. It spans our weekly scoreboard, idea-generation screens (this week including quality names near their 52-week lows, the quality-compounders screen, micro-cap “tiny titans,” recent spin-offs, activist campaigns, and valuation screens across the US, Canada, the UK, Germany, Australia, Japan, and Korea), market valuation and positioning, and the macro and fixed-income picture. We welcome your feedback as the format continues to evolve.

Feedback on the Briefing

“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 have never seen more valuable content in one place.” —Bill Coleman

“Worth its weight in gold.” —Shree Viswanathan

Subscribe now

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.

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

• Selected insights from 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 (new this week)

Part 2 — Idea Generation

• 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

• 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 shares outstanding

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

• 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

• S&P 500 highest 5-year average ROIC

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

• Canada equity valuation screens

• UK equity valuation screens

• Germany equity valuation screens

• Australia equity valuation screens

• Japan equity valuation screens

• Korea equity valuation screens

• Notable activist campaigns and acquisition proposals

• Featured spin-off opportunities

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

Part 3 — Market Valuation & Positioning

• Equity market value / GDP

• World equity market cap / world 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 annual price 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

• 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

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)

Share Latticework by MOI Global

Enjoying Latticework? Help us make it even more special.

• Share Latticework (simply click the above button!)

• Introduce us to a thoughtful speaker or podcast guest

• Be considered for an interview or idea presentation

• Volunteer to host a small group dinner in your city

• Become a sponsor of Latticework / MOI Global

Volunteer by reaching out directly to John (john@moiglobal.com).

Ideas from our Weekly Inspiration newsletter

The Briefing’s two company-insight slides distill six stock write-ups curated in this week’s Weekly Inspiration. All six come from the wider analytical community; we highlight five of them below.

Hermit Research, in a collaboration with Quality Value Research, argues the bearish narrative on Atlassian (TEAM), that AI eliminates developers and with them per-seat revenue, rests on a false premise: fewer than half of Atlassian’s users are developers, with 70% of Confluence and 75% of Jira Service Management users in non-technical roles. Founder-led and with buybacks exceeding stock compensation in FY26, the shares offer a 5.8% FCF yield after a 60% drawdown.

StockOpine reads the Q2 at Evolution (Sweden: EVO) as a business defending 66% EBITDA margins through a deceleration: Asia down 8.9% on stream piracy, Europe stabilizing, and RNG up 14% with the Game Rounds Index at a record high. With EUR 1.2 billion of net cash funding aggressive buybacks, they argue 8.7x EV/EBITDA reflects the regional headwinds but underprices margin durability and per-share compounding.

Tangible Bruce values Fuller, Smith & Turner (UK: FSTA) on hidden assets: a 337-property freehold pub estate carried at ~£590 million against a ~£990 million appraisal, a gap on par with the ~£400 million market cap. At roughly 0.48x revalued tangible book, with about 15% of shares retired since 2023 and leverage of 2.1x net debt to EBITDA, the downside is asset-cushioned and the upside requires continued execution, not heroics.

Elliot’s Musings contrasts a record $105 billion backlog at Northrop Grumman (NOC), a 1.8x book-to-bill, and a second straight guidance raise with a 22% multiple compression tied to the US-Iran ceasefire. At 18x forward earnings with a 6.6% FCF yield, the August F/A-XX fighter down-select stands as a binary catalyst the market has left essentially unpriced.

On the largest end, Ryan Seawell of Lewistown Capital treats the autonomous-vehicle transition as both the primary risk to Uber (UBER) and its s-curve opportunity: 50 million Uber One members representing half of bookings, a multi-partner AV strategy, and 50% delivery exposure position the company to participate even if mobility share erodes. At about 10x 2027E EBITDA with a 7.7% FCF yield, he finds expectations undemanding.

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

Three articles worth your time

Too Small to Matter?, by Dan Rasmussen, asks why investors who accept that smaller companies offer greater opportunity express that view almost exclusively through private equity. The average private equity deal, at about $130 million of market cap, is a microcap; yet private equity trades at a 0-40% premium to public markets (EBITDA add-backs now inflate reported earnings by roughly 29%), while US microcaps trade at about a 20% discount, European at 30%, Korean at 40%, and Japanese at roughly 50% to the broad US market. With microcap fundamentals holding up against the Russell 3000, he attributes the gap to investor neglect, not performance.

Hunting Cheap Energy Names, by Benjamin Demase, surveys four energy names against a tape in which European TTF gas is up 98% and Asian JKM up 116% YTD versus Brent’s 46% gain, while Henry Hub has fallen 20%. Shell trades near 8x forward earnings with a $3 billion buyback program, Petrobras at 6-7x earnings with a 5-9% yield, and small-cap PetroTal below 0.7x book; the standout is Harbour Energy, whose 2026 FCF guidance was raised from $0.6 billion to $1.4 billion, implying roughly 2.5x price to FCF.

It’s the jockey, stupid.... right?, by Andrew Walker, refuses to crown a winner among management, business quality, and price, arguing the ranking depends on context. His hard case is Microsoft: bought at roughly 70x earnings in early 2000, it grew revenue about 10% a year and EPS at a high single-digit rate, yet took almost 15 years to break even. Commodity businesses reward the cheap price over the star manager; technology’s fat-tailed outcomes invert the hierarchy toward the jockey, with Marissa Mayer at Yahoo and Ron Johnson at J.C. Penney as reminders that even great managers rarely rescue declining businesses.

New in this week’s deck

Earnings call themes joins Part 1, directly after the beats and misses: a digest of recurring themes from full transcripts of the week’s 25 largest earnings reporters, with every quote verbatim and verified against the source transcript. This week’s themes: data-center demand reshaping the power grid, severe AI supply constraints, buybacks running alongside record capex, and AI lifting internal productivity, drawing on calls from GE Vernova, Tesla, Intel, Alphabet, AT&T, Verizon, and American Express.

Quality compounders is the deck’s first quality screen, a two-slide family ranking companies by highest five-year average ROIC, subject to EV/EBIT at or below 30x, ex-financials. One slide covers the S&P 500; the other extends the screen to US-listed names above $300 million in market cap outside the index, with ROIC figures cross-checked against an independent derivation and SEC EDGAR operating income.

Korea valuation screens add a seventh country: four screens of the KOSPI-listed universe above a 100 billion won market cap, covering price to tangible book, EV to three-year EBITDA, three-year FCF yield, and three-year earnings yield, with ranked names audited against DART regulatory filings.

The deck

The full Monday Morning Briefing is available to members. It spans our weekly scoreboard, idea-generation screens (this week including quality names near their 52-week lows, the new quality-compounders screen, micro-cap “tiny titans,” recent spin-offs, activist campaigns, and valuation screens across the US, Canada, the UK, Germany, Australia, Japan, and Korea), market valuation and positioning, and the macro and fixed-income picture. We welcome your feedback as the format continues to evolve.

Feedback on the Briefing

“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 have never seen more valuable content in one place.” —Bill Coleman

“Worth its weight in gold.” —Shree Viswanathan

Subscribe now

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.

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

• Selected insights from earnings calls (new this week)

• Top reporters by market cap, week ahead

• Takeaways from featured Weekly Inspiration articles

• Special charts: semis in S&P EPS growth; memory margins

• What’s new in AI for investment managers

• Curated video and audio from Weekly Inspiration

Part 2 — Idea Generation

• 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

• 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 shares outstanding

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

• 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

• S&P 500 highest 5-year average ROIC (new this week)

• Highest 5-year ROIC for stocks ex-S&P 500 (new this week)

• Canada equity valuation screens

• UK equity valuation screens

• Germany equity valuation screens

• Australia equity valuation screens

• Japan equity valuation screens

• Korea equity valuation screens (new this week)

• Notable activist campaigns and acquisition proposals

• Featured spin-off opportunities

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

Part 3 — Market Valuation & Positioning

• Equity market value / GDP

• World equity market cap / world 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 annual price 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

• 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

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)

Share Latticework by MOI Global

Enjoying Latticework? Help us make it even more special.

• Share Latticework (simply click the above button!)

• Introduce us to a thoughtful speaker or podcast guest

• Be considered for an interview or idea presentation

• Volunteer to host a small group dinner in your city

• Become a sponsor of Latticework / MOI Global

Volunteer by reaching out directly to John (john@moiglobal.com).

Ideas from our Weekly Inspiration newsletter

Acid Investments frames The Buckle (BKE) as a seasonal setup: a debt-free retailer with insider ownership above 30% and a decade of uninterrupted free cash flow, at 7.7x EV/EBITDA with a 10% FCF yield that funds near-total distribution of earnings. Accumulating ahead of the January special dividend, the author argues, offers a path to a 30-40% total return into 2027.

Wyatt Sparks makes the case for Weyerhaeuser (WY) near $23 against mid-$40s sum-of-the-parts value: timberlands at a ~15% discount to private-market transactions, a positive-carry land bank compounding at 27.5%, and a wood-products business that generated $3.3 billion of EBITDA during COVID effectively valued at zero. A 3.4% dividend pays the wait.

Jim and Abigail Zimmerman of Lowell Capital detail 4imprint (UK: FOUR), the dominant North American direct marketer of promotional products, with ~5% of a fragmented $20+ billion industry and no peer at scale. The drop-ship model produces ROACE >40% on 1-2% capex; at 8.9x EV/EBITDA with an 8.4% FCF yield and net cash, they see a re-rating toward $90.

Rodrigo Lopez Buenrostro of KUE Capital argues the market prices Midea Group (China: 000333) as a saturated appliance maker when it is a vertically integrated industrial compounder: GMCC holds 45% of the global HVAC compressor market and KUKA anchors a top-four robotics platform. At 14.3x earnings with a 5.2% dividend on net cash, shares trade near half the multiple of Otis or Carrier.

Four essays worth your time

Adaptation or Capitulation?, by Harvey Sawikin of Firebird Management, dissects the letter in which Fundsmith’s Terry Smith, running $30 billion (half the peak), announced he will “take more account of momentum” and be far less willing to buy quality companies on a glitch. Smith blames passive flows: index funds now own 60% of the market, and UK trackers returned 66% over five years against 32% for active managers, a gap fees cannot explain. Sawikin counters that hyperactive retail is the dog and passive the tail, and his partner Steve Gorelik notes Applovin’s claimed 3.7% FCF yield shrinks toward 1% once stock compensation is counted. He credits Smith’s candor while doubting the new portfolio carries any analytical edge.

Country Risk: Determinants, Measures and Implications, by Aswath Damodaran, is his annual July reminder that country risk cannot be diversified away as cross-market correlations rise. He traces risk differences to four drivers (political structure, corruption, violence, and legal enforcement of property rights) and notes that only 7.3% of the world’s population lived in democracies at the end of 2025 by the EIU’s count. The 2026 mechanics: with the S&P 500 at 7,499 on July 1, the implied US equity risk premium is 4.42%; netting out the post-downgrade US default spread yields a 4.20% mature-market premium, onto which he layers rating-derived country premiums across roughly 180 countries. All of the data is free on his site.

The Art of not Selling (too early), by Javier Pérez of Edelweiss Capital Research, sorts every holding into two buckets. Appraisable businesses (Deere, Watches of Switzerland) get sold when the forward IRR drops below your hurdle; optionality businesses get sold when the drivers of compounding erode, not when the multiple looks rich. True 15%-a-year, decade-long compounders, he warns, are far rarer than portfolios suggest. Nvidia (NVDA) is his hard case: down 16% from its May high at about 18x forward earnings while holding 85-92% of the AI accelerator market, with custom silicon expected to reach 28% of AI chip spending by year-end. For such cases he prescribes scenario odds and position sizing, not false precision.

Software’s Selective Sell-Off, by Moses Sternstein, writing in a16z’s newsletter, shows investors assigning software their lowest premium on cash generation in over a decade: multiples on next-twelve-month free cash flow sit at 2014 levels. The selloff is selective, though. A roughly 50-point performance spread has opened between top and bottom quartiles since the turn of the year, revenue growth shows near-zero correlation with recent returns, and the market pays up for perceived AI defensibility (cyber, observability, vertical SaaS) while marking down horizontal platforms; software alone, he concludes, is not a moat. The demand-side kicker: AI achieved in about three years the affordability gains PCs took nearly two decades to deliver, and falling costs keep expanding usage.

The deck

The full Monday Morning Briefing is available to members. It spans our weekly scoreboard, idea-generation screens (this week including quality names near their 52-week lows, micro-cap “tiny titans,” recent spin-offs, activist campaigns, and valuation screens across the US, Canada, the UK, Germany, Australia, and Japan), market valuation and positioning, and the macro and fixed-income picture. We welcome your feedback as the format continues to evolve.

Feedback on the Briefing

“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

Subscribe now

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.

Table of contents

Note: Slides showing data that is updated on a monthly or quarterly basis may not 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

• 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

Part 2 — Idea Generation

• 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)

• 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

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

• Canada equity valuation screens

• UK equity valuation screens

• Germany equity valuation screens

• Australia equity valuation screens

• Japan equity valuation screens

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 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

• 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

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)

Share Latticework by MOI Global

Enjoying Latticework? Help us make it even more special.

• Share Latticework (simply click the above button!)

• Introduce us to a thoughtful speaker or podcast guest

• Be considered for an interview or idea presentation

• Volunteer to host a small group dinner in your city

• Become a sponsor of Latticework / MOI Global

Volunteer by reaching out directly to John (john@moiglobal.com).

Ideas from Wide-Moat Investing Summit 2026

Instructors presented more than a dozen ideas at the recently completed Wide-Moat Investing Summit 2026. A theme carried over from our June member call, recapped in UnitedHealth, Salesforce, and the AI Value-Chain Debate: high-quality franchises priced for fear.

Two presentations took on UnitedHealth (UNH), which reports this Thursday. Dave Sather of Sather Financial Group argued cyclical fears mask a structurally widening moat, with the book repricing every 12 months and a DCF supporting about $460 per share. Arvind Mallik, Jonathon Fite, and Paul Ucheoma of KMF Investments called the medical-loss-ratio spike toward 89% a solvable, annually repriceable error and see $500-600 of intrinsic value against a reaffirmed 13-16% EPS growth target.

Andrew Macken of Montaka Global Investments made the distribution case for Salesforce (CRM): halved on “SaaSpocalypse” fears yet holding over 250 petabytes of proprietary customer data, at under 8x EV to FY2030 EBITA guidance, with a $50 billion buyback authorized.

Chris Crawford of Crawford Fund Management pitched Toast (TOST) as a founder-led compounder with $1.7 billion of net cash, a first-ever buyback, and a $48 blended appraisal against a $26 stock.

Ryan O’Connor of Crossroads Capital called Nintendo (NTDOY) the most mispriced stock in his seven years of ownership, near 7.5x depressed mid-cycle EBIT, with cash and non-core assets, including the Pokémon stake, covering roughly 63% of the market cap.

Matthew Castel of Logos LP presented Axon Enterprise (AXON), the operating system for public safety, citing $14.3 billion of contracted future bookings, up 44%, and a base case of $735 versus a recent $440.

Samir Patel of Askeladden Capital unpacked Sotera Health (SHC), a 51%-EBITDA-margin sterilization toll road obscured by a litigation cloud, with the remaining California claims sized near 5% of market cap and fair value of $22-23 against a $16 stock.

Aman Budhwar of Pender presented StandardAero (SARO), the largest independent aerospace engine aftermarket firm, with LEAP revenue guided from just over $100 million toward $1 billion by decade’s end.

Jens Kruse weighed AI threat against AI tailwind at Duolingo (DUOL), down 76% from its high, at roughly 19x adjusted 2026 EPS with a $400 million buyback in place.

Julio Utrera of Southeastern Asset Management argued Canal+ (UK: CAN) trades near 4x 2027 EV/EBITDA with a teens FCF yield following the MultiChoice acquisition; his sum-of-the-parts implies 75% to 100%+ upside.

Rodrigo Lopez Buenrostro of KUE Capital presented Midea Group (China: 000333), holder of 45% of the global HVAC compressor market, at 15x earnings and a 7.3% FCFE yield versus intrinsic value of 130 CNY, a 38% margin of safety.

Gwen Hofmeyr of Maiden Financial framed Sif Holding (Netherlands: SIFG), the largest producer of offshore-wind monopile foundations, as a capital-cycle bet at a 36% discount to replication cost as the North Sea buildout accelerates.

In the UK, Harry Fraser of Oldfield Partners pitched Moonpig (MOON), the dominant online card platform, on a roughly 9% free-cash-flow yield, with buybacks and dividends returning over 10% of market cap.

Jim and Abigail Zimmerman of Lowell Capital made the case for 4imprint (UK: FOUR): debt-free, $133 million of net cash, ROACE above 40%, and appraised near $90 against a $50 stock.

Finally, Sid Choraria of SC Marwar Capital distilled a decade of research on 1,000-baggers: only about 65 of 25,000 global companies made it over the past 40 years, and the formula is revenue growth, margin expansion, buybacks, and underestimated duration.

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

Four essays worth your time

Away From the Casino Tables: The Wildest Value Gap Since 1999, by Sam Ziff of Oldfield Partners, starts from Buffett’s observation that the casino has rarely been busier: zero-day options now run about 43% of daily volume, more than half of it retail. Against that backdrop, GMO data show global deep value trading 45% below its 40-year median while extreme growth commands a 40% premium, a spread rivaled only by late 1999. Ziff’s history lesson: from 1999 to 2009 the MSCI World and S&P 500 returned roughly zero, emerging markets doubled, and Oldfield’s Overstone Global strategy compounded at 6% a year. A passive global allocation, he warns, has quietly become a single concentrated bet on AI.

Invisible Companies, by Jay Barney, Haiyang Zhang, and Jerry Neumann in Colossus, asks how Steve Ross parlayed funeral parlors, parking lots, and rental cars into the 1969 purchase of Warner Bros. Their answer is competitive neglect: some businesses earn supranormal profits for decades not because rivals cannot enter but because rivals never think to look. Constellation Software, compounding near 34% a year since its 2006 IPO by buying software niches often under $5 million a deal, and HEICO in aftermarket aircraft parts are the modern heirs, and Constellation still counts 38,000-plus potential targets. The authors’ advice for finding invisible companies: loosen the standard screens, study shrinking or stigmatized industries, and look where insiders keep founding businesses that outsiders never do.

The Myth of the Family Business, by Patrick Rial of TriVista Capital, challenges a heuristic many of us carry. Credit Suisse’s Family 1000 research shows family firms earning 2 points higher ROI and 4 points of annual share outperformance, but Rial argues the causality runs backward: superior economics enable multigenerational ownership, not the reverse, which is why the list is peppered with Hermes, Heineken, and Hershey. From 13 years in Japanese small caps he catalogs the founder-to-son handoff, citing Perez-Gonzalez research that family successors reduce ROA by 18% relative to professional managers. Judge the specific person running the company, he concludes, not the surname.

Dividend Investing is Dead, by Todd Wenning, is a candid self-demolition by an investor who wrote a book on dividend investing a decade ago. Three shifts broke the playbook: consumer-staples anchors disrupted by GLP-1s, private label, and influencer marketing (Diageo cut its dividend this year, while Colgate-Palmolive, Sysco, and Stanley Black & Decker each raised theirs by a single cent); boards that have preferred buybacks since SEC Rule 10b-18 arrived in 1982, with the S&P 500’s buyback yield above its dividend yield for most of the past decade; and an index whose average constituent age has fallen from 57 years to 15. His adaptation: judge how management allocates all of its cash flow, not the payout in isolation.

The deck

The full Monday Morning Briefing is available to members. It spans our weekly scoreboard, idea-generation screens (this week including quality names near their 52-week lows, micro-cap “tiny titans,” recent spin-offs, activist campaigns, and valuation screens across the US, Canada, the UK, Australia, Japan, and newly added Germany), market valuation and positioning, and the macro and fixed-income picture. We welcome your feedback as the format continues to evolve..

Feedback on the Briefing

“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

Subscribe now

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.

Table of contents

Note: Slides showing data that is updated on a monthly or quarterly basis may not 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

• 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

Part 2 — Idea Generation

• 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)

• 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

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

• Canada equity valuation screens

• UK equity valuation screens

• Germany equity valuation screens

• Australia equity valuation screens

• Japan equity valuation screens

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 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

• 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

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)

Share Latticework by MOI Global

Enjoying Latticework? Help us make it even more special.

• Share Latticework (simply click the above button!)

• Introduce us to a thoughtful speaker or podcast guest

• Be considered for an interview or idea presentation

• Volunteer to host a small group dinner in your city

• Become a sponsor of Latticework / MOI Global

Volunteer by reaching out directly to John (john@moiglobal.com).

Ideas from our Weekly Inspiration newsletter

Several of this week’s curated ideas share a commonality: high-quality or cyclical businesses the market has marked down on AI-related fears.

The clearest example is Constellation Software (CSU), the Canadian serial acquirer of mission-critical vertical-market software, down ~50% on worries about AI disruption and founder Mark Leonard’s retirement. Eagle Point’s write-up argues the fear is misplaced: the moat is customer relationships and switching costs rather than code, 1,500-plus decentralized business units limit top-down risk, and free cash flow has compounded 26% a year since IPO with no share issuance, leaving a 6.3% FCF yield.

On the smaller end, Austco Healthcare (AHC), a debt-free Australian micro-cap supplying nurse-call systems to 4,500-plus hospitals, trades at 7.8x EV/EBITDA and an 18.6% free-cash-flow yield with net cash, and a June rollout across roughly 180 US hospitals could lift its software mix.

The value net stretches wider. Kerrisdale makes the case that Regal Rexnord (RRX), remade by the Rexnord PMC and Altra deals into a diversified industrial-powertrain platform, is masked by a debt overhang and a three-year industrial recession, and sees 100+% upside as margins inflect.

In Japan, Sanyo Engineering & Construction (1960) trades at 2.5x EV/EBITDA, 0.7x book, and 4.3% dividend yield. The takeover of a peer at 22x EV/EBITDA reframes the scarcity value of skilled electrical capacity.

Pitney Bowes (PBI) offers a 17% free-cash-flow yield after a 60% rally, though the easy leg of that story is done.

Somnigroup (SGI), the dominant mattress maker, cuts the other way: at 22x EV/EBITDA the author models only about 26% upside against 45% downside, a watchlist name below $60.

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

Four essays worth your time

The Cartography of the Risk-Free Rate, by Will Thomson of Massif Capital, argues that sovereign long yields have shifted from an expectations-driven regime to a fragmentation-driven one, where the term premium carries a rising geopolitical charge. He points to an ACM 10-year term premium near 0.6%, which accounts for over half the recent rise in yields; to China’s Treasury holdings falling to $652.3 billion, the lowest since 2008, as central banks buy 1,000-plus tonnes of gold a year; and to a stock-bond correlation near +0.6 since 2022 that has stripped duration of its hedging power. His conclusion is “dispersion, not direction,” with only a one-third chance the shift proves cyclical.

A fundamental flaw of prediction markets, by Joachim Klement, takes aim at the idea that money-weighted betting produces better forecasts. Citing Berkeley research across 5,456 Kalshi and Polymarket markets, he shows that the large “whale” bettors carried a negative edge, systematically losing to smaller traders, and that conviction correlated with ideology rather than information. The implication is uncomfortable for anyone treating prediction-market odds as truth: weighting forecasts by wager size distorts the wisdom of crowds rather than sharpening it.

The $1 Million Bet That Could Have Become $90 Billion, by Anh Hoang, uses the Simplot and Micron story to make a point about omission errors. J.R. Simplot’s retained 40% stake in Micron, adjusted for decades of dilution, would be worth roughly $90 billion today, well short of the viral $500 billion figure but a fortune all the same, and Hoang’s argument is that selling great compounders too early creates invisible losses that dwarf the mistakes that actually show up in a track record. He also notes that commodity-industry operators tolerate volatility better than most investors, which made Micron’s patient Boise shareholder base structurally suited to back a capital-intensive, harvest-cycle business through the DRAM wars.

Kirkland Signature: Jim Sinegal and the Making of Costco’s $90B Private-Label Empire, by Trung Phan, is a case study in private-label economics. Kirkland now generates roughly one-third of Costco’s $275 billion in revenue, more than the standalone sales of Boeing, FedEx, or P&G, and Phan traces the idea to Jim Sinegal’s reading of a 1991 Forbes piece on national brands that would not cut prices as input costs fell. The competitive threat is concrete: Celsius shares fell 13% in a week after Costco launched a rival energy drink at 55% below Celsius pricing.

The deck

The full Monday Morning Briefing is available to members. It spans our weekly scoreboard, idea-generation screens (this week including quality names near their 52-week lows, micro-cap “tiny titans,” recent spin-offs, activist campaigns, and value screens across the US, Canada, the UK, Australia, and newly added Japan), market valuation and positioning, and the macro and fixed-income picture. We welcome your feedback as the format continues to evolve.

Feedback on the Briefing

“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

Subscribe now

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.

Table of contents

Note: Slides showing data that is updated on a monthly or quarterly basis may not 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

• 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

Part 2 — Idea Generation

• 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)

• 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

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

• Canada equity valuation screens

• UK equity valuation screens

• Australia equity valuation screens

• Japan equity valuation screens

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 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

• 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

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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The new Briefing is embedded in full below for members. As always, it runs from a weekly scoreboard through our idea-generation screens, market valuation and positioning, and a macro and fixed-income section. Before the deck, a short orientation: what last week told us, what we are watching in the days ahead, and a few things worth reading.

Last week, and the week ahead

The headline number flattered to deceive. The S&P 500 closed at 7,354, down 2.0% on the week, and the Nasdaq fell 4.6%, yet beneath the cap-weighted indices the move was a rotation rather than a retreat. Small caps led: the Russell 2000 rose 1.0% and the S&P 600 added 3.0%. The selling concentrated in the names that have carried the market. Technology dropped 6.1% while health care jumped 7.4%, its best week in some time, and the rate-sensitive and defensive corners followed health care higher, with utilities up 3.9%, real estate up 3.6%, and consumer staples up 2.5%. The ten-year Treasury yield eased eight basis points to 4.37%, and the VIX rose two points to 18.4.

The weakness was sharpest abroad and in commodities. Asian equities slumped, with the KOSPI off 7.1%, the Hang Seng down 5.2%, and the Nikkei 225 down 2.7%. Commodities sold off almost across the board: eight of the ten tracked contracts fell, led by WTI crude down 9.6% to $69.23 and silver down 9.7%. Gold slipped 2.5% to $4,096 and copper fell 3.5%. Earnings were a quiet, with BlackBerry, MillerKnoll, and Winnebago all printing below consensus even as several of the stocks rallied on the news.

The week ahead is holiday-shortened, with US markets closed Friday, July 3 for Independence Day. The reporting calendar is led by Nike and Constellation Brands on Tuesday, General Mills and FactSet on Wednesday, and Holcim on Friday, with Prosus, Naspers, and AeroVironment opening the week. The June employment report also lands in the first week of the month. The question for the days ahead is whether last week’s rotation, out of megacap tech and into small caps, health care, and defensives, marks a durable change in leadership or merely a pause, and whether the slide in crude and the broader commodity complex continues.

Takeaways from last Thursday’s member call

We held our third bi-monthly member call last Thursday, featuring elevator-pitch versions of ideas that instructors had presented at the just-completed Wide-Moat Investing Summit. One theme tied most of the pitches together: high-quality businesses the market has marked down on an artificial-intelligence story the presenters consider either overblown or beside the point. Our full write-up is here: UnitedHealth, Salesforce, and the AI Value-Chain Debate.

UnitedHealth drew two presenters. Dave Sather of Sather Financial Group argued the market wrongly lumps it with hospital and managed-care peers and sold it on Medicare-reimbursement fears, when health insurance is short-tail risk repriced every twelve months and the real prize is Optum, which he called “a technology company with a healthcare wrapper” sitting on some 330 million identified data points. Jonathon Fite of KMF Investments reinforced the case on the economics of vertical integration and a post-COVID housecleaning, arriving at a multi-year fair value north of $600.

Amit Nath of Montaka Investments relayed Andy Macken’s Salesforce thesis: the “SaaS-pocalypse” fear has priced the stock for roughly 1% revenue growth against guidance for 10%, while the durable moat is distribution and 250 petabytes of proprietary data, not the increasingly substitutable model layer. Lowell Capital’s Jim and Abby Zimmerman pitched 4imprint, a London-listed but largely North American marketing engine they think can at least double. Chris Crawford of Crawford Fund Management made the case for Toast, founder-led and debt-free with $1.7 billion of cash against a $13 billion market cap, where his valuation methods converge near $48, about 80% above the current price. And Rodrigo Lopez Buenrostro of KuE Capital pitched Midea, a compounder at 15 times earnings with a 7% free-cash-flow yield against Western peers near 25 to 30 times, for roughly 45 to 50% upside.

The call closed with a candid roundtable on who in the AI value chain is left holding the “hot potato” as intelligence commoditizes. Bryan Lawrence of Oakcliff Capital, a longtime Alphabet holder, called Google’s most recent quarter one of the most remarkable he has seen, with backlog doubling to roughly $460 billion and incremental cloud margins above 65%. James Emanuel posed the central question: if cheap open-source and Chinese models are good enough for most enterprise work, who absorbs the cost as it moves down the funnel from hyperscaler to software vendor to customer? Amit Nath’s answer was that intelligence is becoming the most substitutable layer in the stack, noting that Microsoft is preparing to run DeepSeek inside Copilot, ring-fenced within Azure. Bryan’s counterpoint was memorable: the model running Pizza Hut’s call center need not be the frontier, so the deflationary force in that middle layer is enormous, while in drug discovery the highest-order intelligence is worth almost any price.

Three essays worth your time

SpaceX $SPCX: The New Index Fund, by Alejandro Yela, dissects the mechanics behind the largest IPO in history, which raised roughly $85 billion. His argument is that SpaceX exploited a NASDAQ rule change, effective May 1, that compressed the post-IPO seasoning period from three months to 15 trading days, fast-tracking the stock into the NASDAQ 100 and conscripting every index tracker, including the roughly $600 billion QQQ, as a forced buyer. The 30% retail allocation, against a typical sub-5%, reads to him less as democratization than as a tell of weak institutional conviction. With the company burning cash and much of its valuation resting on an orbital-data-center dream that collides with the thermodynamics of cooling in a vacuum, Yela frames the listing as “the institutionalization of a meme stock.”

Weekend Thoughts: Malone’s Born to Be Wired; Thoughts on Cable; Is CHTR Cheap?, by John Huber, works through why cable has confounded value investors, with Charter down 42% over the decade. Prompted by John Malone’s new book, Huber leans on Malone’s own discount-airline analogy: a few players with high fixed and low variable costs, fighting to fill the last seat, which makes raising prices, and even holding customers, increasingly hard as fiber, fixed-wireless, and Starlink encroach. Charter looks statistically cheap at about four times FCF, but Huber treats that as a call option on revenue stability and, applying his ten-year test, prefers to watch from the sidelines.

Executive Compensation: The Cobra Effect, by James Emanuel, uses Goodhart’s and Campbell’s laws to explain why metric-driven pay so often backfires: EPS targets can be hit with buybacks, cost deferrals, accounting choices, or underinvestment, and share-price targets reward factors outside a manager’s control. Inverting the problem, Emanuel asks not what it costs to produce elite performance but what it would cost to make a Jobs, a Bezos, or a Buffett stop, and concludes that financial incentives are closer to a contrarian indicator. His prescription favors longer vesting, clawbacks, peer-group calibration, and ownership over engineered bonuses, with Buffett’s $100,000 salary as the model.

The deck

The full 78-page Monday Morning Briefing is embedded below for members: seventy-eight pages spanning the weekly scoreboard, our idea-generation screens, market valuation and positioning, and the macro and fixed-income picture. Every chart and table carries its source and as-of date. We welcome your feedback as the format continues to evolve.

Feedback on the Briefing

“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

The new issue follows.

Read more

SpaceX last closed at $185 on June 18, up roughly 37 percent from its $135 IPO price and now “worth” about $2.4 trillion. We are skeptical of the market quotation, and our reasons are set out in our note from the listing here.

Below, we highlight the three pieces that deserve your time this week.

Aswath Damodaran asks whether SpaceX, OpenAI, and Anthropic belong in the S&P 500, and whether it even matters. Skeptical of the loudest voices on both sides, he lands on an interesting point: the old price bump from index inclusion has largely vanished, and newly added names now tend to underperform in the year after they join. Tesla is the clean example, lagging both the index and the company it replaced after its late 2020 addition. For a long-term investor the message is that inclusion does not move intrinsic value, so it is not a catalyst worth paying for.

Chris Satterthwaite of Verdad shows that the factor driving this rally is not the one the headlines name. The biggest winner has not been AI or chips but high-volatility stocks, the lottery tickets that normally lag, and Verdad’s low-volatility factor is down about 13 percent since late March, a two-month drawdown at the 0.5th percentile of everything since 1996. Episodes this extreme split into two opposite outcomes, rebounds off a bottom and junk rallies near a top, and Verdad sets the analogues side by side without telling you which one applies.

Phil Bak turns a family road trip into the most unusual piece of the three. Talked out of a motel by his son’s logic that a night of camping at least leaves you with a tent to show for the money, he widens into a market priced for perfection, a Buffett Indicator near 230 percent, a CAPE at dot-com levels, and the fraying society around it. His point is that being honest about stretched valuations and a widening wealth gap is not bearishness but a refusal of the comforting lie. It is the most enjoyable thing I read this week, and the one most worth your time.

This week’s 71-page presentation is available for download below.

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

The new issue follows.

Read more

On Friday evening Washington reached directly into a frontier AI model and switched it off. A few hours earlier the same market that is supposed to be pricing AI risk handed a rocket-wrapped compute business the largest IPO valuation in history. Underneath both news items sits a single key question: Is the AI build-out a super cycle that compounds, or a capital cycle that mean-reverts? Chris Bloomstran of Semper Augustus and Luke Bridgeman of Hosking Partners tackle the question from different angles. They both arrive at roughly the same place.

Washington pulled Anthropic’s most powerful models off the market on Friday night. At 5:21pm Eastern on June 12, the Commerce Department, in a letter from Secretary Howard Lutnick drafted with the Bureau of Industry and Security, issued an export-control directive ordering Anthropic to suspend access to Fable 5 and the non-public Mythos 5 for any foreign national, whether outside the US or inside it, and explicitly including Anthropic’s own non-citizen employees. Because the company cannot verify citizenship at the model layer, it had no practical option but to disable both models for every customer. Its other models, including Claude Opus 4.8, are unaffected. This is the first time the US has applied export controls to an AI model itself rather than to the chips that train it. The trigger, reportedly surfaced by Amazon, was a single narrow jailbreak. Anthropic says it is narrow rather than universal, confers no meaningful incremental capability, and can be reproduced on rival models such as OpenAI’s GPT-5.5 that face no comparable order.

We share the view, argued at length by Zvi Mowshowitz, that whatever the merits of the underlying concern, the implementation was clumsy and reveals either real animus toward Anthropic or a basic misunderstanding of how jailbreaks and defense in depth actually work. The incoherence is hard to miss. The administration is simultaneously relaxing controls on selling advanced chips to China while barring, say, a British employee of a New York bank from touching the best American model. If the standard applied to Fable were applied across the industry, it would halt essentially every frontier deployment, which is why the more honest framing is not “Anthropic broke a rule” but “who is next?” The own-goal risk is the one worth holding in mind: a large share of the technical staff at every American lab are foreign nationals, and a policy that locks them out of their own tools is the rare measure that could slow the US and speed its competitors at the same time. It is, as Zvi puts it, close to the opposite of coordinating for safety. His full piece is here.

The case is not closed, and that is the point. Axios reports the pause may last only weeks, and David Sacks, speaking for the administration, frames it as a contained request: fix the specific jailbreak and the control lifts. If that is all it is, the episode resolves quickly and cheaply. If instead the demand is to guarantee that no jailbreak at this level ever recurs, that is not a thing any model provider can deliver, and the standoff hardens. What the action proves matters to anyone underwriting AI cash flows. The state has now demonstrated, with no warning and on a Friday night, that it may reach into a deployed model and turn it off. That is a new and non-trivial input to the discount rate for the entire AI complex, and it lands while three of the largest equity offerings in history are lining up to sell that complex to the public.

The first of those offerings priced and traded on Friday. SpaceX listed on the Nasdaq under the ticker SPCX, pricing more than 555 million shares at $135 and raising roughly $75 billion, the largest IPO ever completed. The stock opened at $150, traded up more than 30 percent at the intraday high (briefly worth more than $2.25 trillion), and closed at $161, up 19 percent on the day, for a first-session market capitalization above $2.1 trillion. Up to 30 percent of the deal went to retail, volume exceeded 500 million shares, and Elon Musk became, on paper, the world’s first trillionaire.

A week ago we flagged what was actually being sold, “a narrative priced as though the option has already paid off.” On Friday the market did not discount that narrative. It underwrote it in full, and at a $2.1 trillion close the implied multiple on trailing sales is richer still than the figure that already looked heroic seven days ago. We are not being offered cash flows but the assumption that the optionality has already been exercised. Last week’s note, with the full reframe, is here.

Our first featured piece this week is the full recap, audio, and 54-page deck from Chris Bloomstran’s session at The Zurich Project, held June 2 to 4. Chris is President and Chief Investment Officer of Semper Augustus and the author of what many regard as the most rigorous outside analysis of Berkshire Hathaway anywhere. His title was self-deprecating. Having called a secular peak in his 2021 letter, only to watch the recovery carry valuations above those highs, he now borrows Irving Fisher’s “permanently high plateau” and calls it a secular plateau. The numbers are the spine of the argument. The S&P 500 ended 2025 at 26 times operating earnings, matching 1929 and approaching the 29 times of early 2000, with a CAPE of 40, price to sales near 3.8, price to book of 6.2, and a dividend yield of roughly 1 percent, an all-time low. His verdict is that there is no moment in the history of the American cap-weighted market when valuations have been higher than today. Offered the choice between that index and a Treasury bill, he would own the bill, though he is careful to add that cash has a clock: his opportunity-cost table shows the market must fall about 28 percent within five years, or 48 percent within ten, merely to justify holding cash against equities compounding at 10 percent.

The analytical core is his five-factor decomposition of total return into dollar sales growth, margin change, multiple change, share-count change, and dividend yield. He illustrates it with Coca-Cola, a great business that nonetheless compounded at just 4.6 percent over the 27 years since mid-1998, when it traded at 58 times earnings and was half the Berkshire portfolio, as that multiple unwound by 60 percent to roughly 23. Apple, bought cheap at 13.9 times earnings (10 times net of cash) and compounded near 30 percent, now sits at 34.5 times, and on his three scenarios is priced to deliver somewhere between zero and 7.5 percent, which is why Berkshire has been a seller. Run the same arithmetic on the index and the Ibbotson 10.5 percent looks implausible: to earn it over the next decade, net margins must reach about 20.7 percent at a constant 26 multiple, or the multiple must reach 43 times at constant margins. He expects neither, and expects the index to trade substantially below current levels at some point within ten years.

The sharpest section applies capital-cycle history, the canals, railroads, autos, electrification, and fiber, to the AI build-out. Hyperscaler capex ran near $400 billion last year and is headed toward $750 billion or more, with cumulative 2023 to 2030 estimates now as high as $7 trillion. The depreciation math is unforgiving: $400 billion of capex on a ten-year straight line creates $40 billion of first-year depreciation against AI revenues of $40 to $50 billion, and a 20 percent return on $4 trillion of cumulative capex would require $800 billion of profit, nearly a third of all S&P 500 earnings. He layers on roughly $650 billion of off-balance-sheet financing, points to structures such as Meta’s five-gigawatt Hyperion data center carried through a Blue Owl joint venture on just $500 million of Meta equity and a Meta debt guarantee, and hears echoes of Enron and Lucent. Berkshire is his discipline case study throughout: running hard away from softening reinsurance, sitting on roughly $120 billion of holding-company cash, and making the surprising $10 billion Google purchase at 10 times sales that he reads as a signpost on Greg Abel’s capital allocation. The full session, with his data and the deck, is worth your time and is available here.

Our second featured piece, from Luke Bridgeman of Hosking Partners, asks the capital-cycle question from the supply side of the same trade: memory. The three companies that dominate global DRAM, Micron in the US and SK Hynix and Samsung in South Korea, have run up between five and eight times over twelve months and have each breached a trillion dollars of market value. Hosking has owned all three since inception, and the essay is an honest interrogation of its own thesis: did the position work for the reason they bought it? The original case was pure capital-cycle theory. As Moore’s law broke down around 2014 and transistor shrinkage stalled near 10 nanometres, capex slowed, a field of more than thirty DRAM makers consolidated to three holding 97 percent of the market, and returns recovered into higher lows and higher highs that rewarded counter-cyclical trimming and adding around 1 times book value. What has happened since ChatGPT, Hosking argues, is different in kind: a demand-led super cycle, driven by high-bandwidth memory for AI that consumes four times the wafer capacity of conventional DRAM, squeezing the conventional product and lifting valuations far above their historical anchor at book.

Their caution is the value investor’s caution, and it rhymes exactly with Bloomstran’s. They are wary of the fallacy of composition: many enterprises can pay full price for AI tokens at high returns, but not all use cases will clear that bar, so the true addressable market may be smaller than it looks. High prices always call forth new supply, and China’s CXMT is likely to IPO this year to fund exactly that, even with its technology still lagging. The survivors now demand binding long-term volume commitments and up-front payment precisely because they remember what the cycle does to them. So Hosking has been taking profits into strength. Set against the heroic assumptions embedded in the coming AI-lab listings of OpenAI, Anthropic, and SpaceX, the firm notes that DRAM still trades on 6 to 10 times forward earnings, which is the market’s way of saying it does not believe this time is different. Their closing line is the one to keep: “chips are currently not ‘cheap as chips.’” The full note is here.

In summary, the market is pricing AI optionality as already won, the government has proved it can withdraw the underlying tech overnight, and two disciplined voices are independently warning that the arithmetic does not close. Super profits invite supply. Capex demands a return. The fallacy of composition caps the addressable market. None of that says the ride ends this year, and Bloomstran is explicit that it may not. It says only what it has always said. Do not buy high.

Feedback on the Monday Morning Briefing

“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

The new issue follows.

Read more

SpaceX has now priced, and the largest IPO in history is no longer hypothetical. The offering has been set, unusually early, at $135 per share, which values the equity at roughly $1.8 trillion, with a final price expected Thursday and the listing scheduled for Friday, June 12. One thing should be clear at the outset: I have the highest respect for Elon Musk as an entrepreneur; on numerous occasions he has achieved the seemingly impossible. His companies have propelled humanity forward and promise to do so in the future.

I want to be careful about what I am and am not saying. I have no quarrel with what SpaceX might be worth a decade from now; for all I know the answer is enormous. The question that matters for anyone buying on the first day is what the company is worth today, on the strength of its actual financials, its actual markets, and what it actually does. Measured that way, $1.8 trillion reads less like a valuation than like a number the offering has manufactured, and a great deal of machinery has been assembled to bring retail investors into it at the open. Three pieces we are featuring in this week’s deck sharpened how I am thinking about the week ahead, and none of them requires a view on Mars or artificial general intelligence to be useful.

The first piece, a thought exercise entitled The Stock Market Crash of 2027 by James Emanuel, Mauricio Heck, and Hugo Navarro, presents a structural argument rather than a forecast. Three mega-IPOs, SpaceX, OpenAI, and Anthropic, are arriving inside roughly six months and together reaching toward $4 trillion or more, with Anthropic’s recent private round alone near $1 trillion. The dollars to absorb that supply have to come from somewhere, and the likeliest source is investors trimming the mega-cap technology positions they already hold, since these listings sit in the same bucket. In a market this concentrated in a handful of technology names, that rotation could pull the broad indices down on its own.

Two design features make the setup more fragile still. SpaceX is bringing only a small fraction of its implied value to market at the start, reportedly 3% to 5% of the equity, which manufactures the scarcity needed to support a price like this in the first place. And the lock-up is not a single 180-day cliff but a staggered series of releases, so across the back half of the year the float swells in tranches and the early scarcity reverses into a flood. The historical rhymes are not comforting. Facebook fell by roughly half after its 2012 lock-up rolled off, and the dot-com unwind was a rolling sequence of expirations rather than a single break. The investors most exposed to that sequence are the ones buying at the open, who pay the engineered price and then inherit the unlock calendar.

The second piece I include with real respect, and with a disagreement I want to state carefully. Aswath Damodaran revisited his SpaceX valuation once the prospectus was public and arrived at an equity value of about $1.3 trillion, roughly $500 billion, or close to 30%, below the $135 offering. Damodaran is the dean of valuation, and his practice of publishing his full work, spreadsheet included, for anyone to inspect and challenge is a genuine service to the investing community. On the headline point he and I do not actually disagree: even his estimate, which already leans on generous assumptions about the next decade, still lands well below the offering price, which is another way of saying there is no margin of safety for an IPO buyer.

Where I hesitate to follow is on the prior question, whether a business like this can be valued today with that degree of precision at all. The model is anchored on revenue figures for 2036 and on operating margins assumed for businesses, the AI line above all, that have very little public track record in the very markets said to make up most of the company’s opportunity. Damodaran himself flags the prospectus’s claim of a $28 trillion total addressable market, $26 trillion of it in AI, as closer to fantasy than forecast; he then doubles his own AI revenue target, to $160 billion, while trimming the assumed AI operating margin from 45% to 25%, and that single pair of choices moves the answer by a wide margin. When inputs this distant and this uncertain carry most of the result, my own instinct is that the honest output is a range too wide to anchor a decision rather than a single figure. None of this is a criticism of his rigor, which is beyond question; it is a difference about how much any method, however careful, can ask of facts this thin. SpaceX plainly contains valuable businesses. The question is the price today, and on that, his figure and my skepticism point in the same direction.

The third piece, from Phil Bak, turns to the index providers, and it is the one that genuinely encouraged me. Under heavy pressure to fast-track these mega-IPOs into their benchmarks from day one, several providers, including Nasdaq and FTSE Russell, moved to accommodate. S&P Dow Jones did not. It held to its twelve-month seasoning requirement and its GAAP profitability requirement and declined to make an exception for size, on the principle that financial viability, seasoning, and float standards should not be waived “solely based on market capitalization.” For a company that lost roughly $5 billion last year, that means S&P 500 funds will not be forced to buy SpaceX at any price for a long time. I do not think the stakes here are small.

Bending the rules to pull an unseasoned, loss-making company into the major indices at a nosebleed valuation would hand the bill to the passive investors least able to absorb it, retirees among them, who never chose the position. That is an abdication of the duty those benchmarks owe the people who entrust them with their savings. S&P is the adult in the room, and if it holds the line it is plainly acting in investors’ interest. One caveat, drawn from the first piece: the Nasdaq-100 has moved the other way, reweighting low-float names at three times their float and dropping the minimum-float rule that would have kept SpaceX out, so the relief is real for S&P 500 holders and only partial for those who own the Nasdaq-100.

None of this is a prediction that the week ends badly. It may be the start of real volatility, or it may not, and we will know more in a few days. What I do believe is that the moment calls for minding the downside with the same care most investors have lately reserved for the upside. The encouraging part is that this does not require sitting on the sidelines. There are still corners of the market that are reasonably priced, and a few that are outright cheap, so it remains possible to stay fully invested while stepping well clear of the excess on display in this offering. We will reconvene next Monday, when much of this should be clearer. This week’s deck follows.

Feedback on the Monday Morning Briefing

“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 and ideas as we refine the format week to week.

Read more

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.

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