The Latticework Monday Morning Briefing is our weekly “Guide to the Markets” for long term-oriented investors. It is sent on a separate mailing list (complimentary to members). If you do not wish to receive it, opt out here.
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.
Our Claude Code Crash Course is now available.
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.
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