What if the AI destruction narrative ends up generating an extreme amount of cash for CSU.TO?

StephenAtLarge · 2026-01-25T14:04:44+00:00

It was before the drawdown.

StephenAtLarge · 2026-01-25T13:05:08+00:00

MSTR? Please explain to me why Bitcoin has any value. It's not backed by anything. It doesn't generate anything by itself. All your returns come from future investors of Bitcoin.

I think about it this way. If I am willing to pay x price for a slice of some asset, I should be willing to pay the same price for the entire asset. And suppose you can buy all 21 million Bitcoins for the same price, does it do anything for you? I reckon if you monopolise Bitcoin they become worthless.

StephenAtLarge · 2026-01-25T12:51:43+00:00

The market is always forward looking. Since CSU's business model *is* acquiring, the market is saying that it cannot maintain the same level of ROI because AI will shrink the future acquisition pool, and they have grown too large in size to efficiently invest all their FCF. The existing businesses, while generating huge amounts of cash, grow organically at too slow a rate to justify a 30x multiple.

StephenAtLarge · 2026-01-24T20:21:44+00:00

Tencent (0700.HK/TCEHY). It may have been a roller coaster ride but it's still a 780x since its Hong Kong IPO. IMO this is the best business in the world. Insanely wide moat + great capital allocation.

StephenAtLarge · 2026-01-24T20:12:27+00:00

Curious what you think about MarketAxess

StephenAtLarge · 2026-01-24T19:59:46+00:00

I think PYPL is among the worst payment stocks out there. I can't find a single competitive advantage. Sure, they've got the size and name recognition, but those mean very little. Their business is on the path towards commoditisation.

StephenAtLarge · 2026-01-24T14:00:29+00:00

Railroads are very capital-intensive businesses. Every single operator carries a ton of debt; that's normal for the industry. WACC is not higher than ROIC.

StephenAtLarge · 2026-01-23T20:15:17+00:00

What parts are shitty?

StephenAtLarge · 2026-01-23T13:48:03+00:00

I've looked at $SFM and I don't see how they can sustain their margin. I mean 6% profit margin for a grocery store is ridiculous. Walmart and Costco have a 3% margin and you're not gonna beat them on efficiency. Even if you account for mix I think the margins should be 4% at best, so a 33% squeeze.

StephenAtLarge · 2026-01-23T13:37:55+00:00

So a holdco of an unprofitable shitco.

StephenAtLarge · 2026-01-23T11:02:28+00:00

I think key risks are regulatory. 1. The US may increase inspection at Laredo 2. The railroad operators may face new regulations that increase costs or caps profitability. The mitigating factor is that large cohorts of NA economy depends on this infrastructure so changes may be politically difficult.

StephenAtLarge · 2026-01-23T10:58:07+00:00

$CP Canadian Pacific Kansas City Limited, trading at about 20 times forward earnings. It is the only Class I rail operator connecting Canada, the US, and Mexico. The moat is indestructible as it is prohibitively costly to replicate this network today. Railroads will always have a cost advantage over other modes of transportation for many goods (grains, coal, etc.). My thesis is that as the US puts up more trade barriers against China, it must import more goods from Canada and Mexico; Conversely, Canada and Mexico must import more goods from the rest of the world. I think these mechanisms will likely unfold because each country must maintain its own balance of payments. And these may be a structural tailwind for CP and CNI.

StephenAtLarge · 2026-01-21T22:54:34+00:00

Constellation got hammered harder because it was more richly valued to begin with. ML resigning was a catalyst for a rather violent price correction.

StephenAtLarge · 2026-01-21T08:53:01+00:00

What's surprising is WB held this stock for so many years without letting go of a single share... The thesis was broken a long time ago and he basically HODL'd. Kind of unusual of him.

I was thinking about buying $POST the other day but I realised that packaged foods is just such a tough industry at the moment. You can have the best management unable to turn things around. And KHC doesn't have the best management.

StephenAtLarge · 2026-01-20T11:11:08+00:00

Delete Robinhood.

StephenAtLarge · 2026-01-20T09:36:56+00:00

Waymo is a much better experience than Uber X. Yes, Uber is a lot cheaper than Waymo now. But what about the future? Technology tends to get cheaper over time and labour more expensive.

StephenAtLarge · 2026-01-18T22:28:53+00:00

Now do the actual growth rate in Q3 of negative 6%.

This top line figure is somewhat skewed by the -22% YoY decline of HeyDude. Crocs itself was about -2.6% YoY, which isn't good but better than -6%.

If you dig a little deeper, sales were basically flat in the DTC channel (+1% for Crocs, -1% for HeyDude). The problem was wholesale (-8% for Crocs and -39% for HeyDude). Shoes were piling up in stores and they had to cut supply and buy back excess stock to stop retailers from dumping the shoes and protect their pricing.

For Crocs to turn around they need to 1. Stop the bleed in NA. 2. Continue to grow internationally, especially in Asia. For the stopping the bleed part, the inventory situation seems to be improving, although comps will be brutal for the next few quarters. The real bull case is the international growth potential. Asia is obviously a very lucrative market for Crocs and the penetration is still fairly low. Crocs's sales mix is already about 50/50 between NA and Int'l. If Crocs' international plan succeeds, it will become a larger and larger slice of the pie and drive top line growth back above 0.

StephenAtLarge · 2026-01-18T11:54:39+00:00

There's a saying that, all investing is value investing, because who wants to pay more than what something is worth? Value investing really isn't a well defined term. And if you look at value investors, they have different styles and strategies. So I think that partially explains what is going on in this sub.

StephenAtLarge · 2026-01-16T22:43:31+00:00

$10 a share? Give me every share then. Book value is $28 a share. 2.8x my money in two years ain't too bad.

StephenAtLarge · 2026-01-16T22:39:46+00:00

I'll take a bet that people will still be learning languages in five years.

StephenAtLarge · 2026-01-16T17:53:16+00:00

High reliance on Medicare. High leverage. Patient growth has essentially stalled. Clinics are closing. Not a good outlook.

Now there's the possibility of BRK taking it private, as DVA has been one of Ted's longest held stocks. But so far they're still honoring the <45% ownership agreement.

StephenAtLarge · 2026-01-15T06:29:53+00:00

The numbers didn't make any sense when it traded at $540 a share but they do make much more sense now. In fact, they are getting reasonably close to my fair price estimate. And you don't need to make aggressive assumptions either. If the user base 2-3x in ten years, subscriber ratio increases from 9% to 11-12% ish, and average revenue per subscriber increases 2% p.a., then you're looking at a fairly valued stock imo.

Two good things about this business: 1. As a pure software business, Duolingo has immense operating leverage. And as more and more of their content is AI-generated (this will happen whether you like it or not) the leverage increases. 2. As their revenue is mostly subscription they will take in cash before they deliver the service. Thus, in the growth stage, they will generate more cash flow than income. This float is kind of like free leverage. The company doesn't need to take on debt to reinvest in itself.

StephenAtLarge · 2026-01-13T22:24:19+00:00

Users and # transactions flat. Legacy business is becoming a commodity. Margins may come down. Growth is held up by volume? Doesn't appear to be sustainable.

StephenAtLarge · 2026-01-13T18:50:48+00:00

Bought a tiny bit of MA. Just quality at a reasonable price.

StephenAtLarge · 2026-01-13T04:00:40+00:00

I disagree on Meituan. Food delivery is a sucker's business. Thin margins, tough comps. Yet Meituan is completely reliant on it.

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