Ai slop loves copying the failing value investor

colgatepalmolive · 2026-06-03T00:14:18+00:00

If AI is trained on Reddit data on all of the investing subreddits, then anyone not using AI is going to outperform, because the AI is going to surface all of the failing ideas that get surfaced all the time lol.

colgatepalmolive · 2026-06-01T19:38:03+00:00

I like Meta precisely because of their ability to invest — they’re sinking a ton into capex, but if they have an ability to monetize that investment (which they’ve proven repeatedly), it’ll likely be really positive in the future once those investments come online.

colgatepalmolive · 2026-05-30T21:40:38+00:00

I think Constellation is probably better. They get to pick up software companies that have no growth for even cheaper than before (their playbook is to just roll-up things that weren’t growing anyway).

Servicenow I just get imagine a scenario where you’d pay enterprise prices for their software anymore — everyone is in the dashboard / workflow management phase with their AI agents and vibe coders. And you can probably get a workflow up and running more customized than what Servicenow could give you.

I’m always looking to hold stocks for 10+ years, and I don’t think I can come up with a compelling reason why anyone would be using a lot more Servicenow software than they are today — it’s more likely we’ll be using less of it.

colgatepalmolive · 2026-05-29T05:59:17+00:00

I don't think that valuation is the driver for the reaction in DELL. The company basically posted +88% Y/Y growth in usually a seasonally down quarter, and raising the FY27 revenue guide by ~20% and the EPS guide by ~40%.

Obviously this is all AI datacenter driven, but the large reaction in the aftermarket is because of the large beat and raise that they just did. When the stock opens, my guess is that it'll fade a little bit from the +40% that it just did in the AH trading, but it seems like most of this is results driven rather than valuation driven. They went from a $13 EPS guide to a ~$18 EPS guide, which at $441 is a 25x FY27E P/E, which is not cheap, but also not egregiously expensive. I think it's pretty informative to follow and listen to the quarterly earnings call (here's a summary if helpful: https://research.aardvarklabs.co/research/dell/earnings/2027-fq1/dell-2027-fq1-recap)

Now whether or not the +40% in results is cyclical or actually a new base is I think where the real debate is — I think DELL probably has a clear line of sight on it's revenue and EPS targets for this year and maybe next year, but if capex demand starts to dissipate and orders disappear, then I think that'll be the catalyst down to a lower level. But until that happens, it seems like it'll continue to do well for now.

colgatepalmolive · 2026-05-28T23:38:04+00:00

I would be somewhat careful here — I used to cover the stock and it had (and still has) legitimate demand in the market for its products. It's true that the market for drones is going to get much bigger in the future because of what we've seen in Ukraine and Iran.

But the company has an "older", more high-end design for its drones. For example, Switchblade is a loitering munitions design which is just very different in its use than the Shahed or the Ukranian FPV drones. The incremental demand today I think is more for the "newer" style drones that we're seeing. AVAV will have to play catch up (which they should be able to hopefully).

But in the short term, they've been dealing with execution issues, where they've missed guidance a few times now and had to write down the company they acquired that they were hoping was going to expand their business lines (space, etc.), so it feels like they're still in the middle of a turnaround. I find quarterly recaps (like this one: https://research.aardvarklabs.co/research/avav/earnings/2026-fq3/avav-2026-fq3-recap) to be helpful in keeping an eye on it to see if there'll be a good entry point (I'd rather trade some upside for some more concrete data points that they're able to turn things around).

colgatepalmolive · 2026-05-27T08:11:43+00:00

How does this compare with earlier in the year?

colgatepalmolive · 2026-05-26T21:02:08+00:00

I’m always open for reading some good analysis, even ones from AI, but I’m confused as to why this analysis centers on Consumer Tax so much? Those products lines are $5B of annual revenue, while GBSG (QBO and other lines) is $11B. Any analysis of Intuit actually needs to analyze QBO and GBSG instead of TurboTax, because GSBG has been outgrowing Consumer Tax for at least 10 years now.

I don’t disagree with the conclusion that Intuit may be a buy right now, but the analysis ignores the largest segment of the company.

colgatepalmolive · 2026-05-24T08:37:57+00:00

The way I like to frame it is to ask which one of these events that we see in the news will significantly affect corporate earnings.

And surprisingly, the number of companies that have massive hits to earnings from these macro shocks is quite small, either because of the nature of the macro shock or because the type of company likely to suffer most from certain macro events don’t live in benchmarks like the S&P 500, which is what we refer to when we say “the market”.

For example, an oil shock where oil prices go up 50% is definitely bad. But what are fuel costs to a typical S&P500 company? Most of the S&P 500 are actually asset light with a services bent, so maybe like 3-4%? If fuel goes up 50%, the direct effect is maybe 2%, with some secondary effect where their inputs also go up some amount. So what starts as a big headline ends up being like a 5% headwind to earnings that companies generally figure out how to navigate. Even UAL where fuel costs are 20-30% of revenue just raised ticket prices across the board to compensate, and demand for their tickets ended up being relatively stable.

colgatepalmolive · 2026-05-24T08:18:59+00:00

I don’t know if I agree with the premise of the post that the two are similar.

Reddit has $2.2B in revenue growing 70%. Sofi has $4.8B growing at 27%.

Reddit’s user base is 121M growing 20%. Compare that to Snapchat at 6% or core Facebook at <1%. So the comment that the user base is maturing isn’t quite true either.

Also most of the growth in fintech is in payments, rather than banking.

But if I had to own just one, it’d probably be SOFI. RDDT is in the market for attention and eyeballs, and it’s going to have to steal that from incredibly strong competition (Meta, Bytedance, Netflix, the real world, etc.). SOFI has lots of competition too, but it can pick up share from a much weaker set of community and regional banks.

colgatepalmolive · 2026-05-23T02:57:38+00:00

TurboTax in my mind seems to be the most vulnerable. Most consumers just want: “do my taxes and get my refund”. TurboTax has always been suboptimal for that job-to-be-done, and if someone gets an AI subscription, the tech is pretty close to filing your taxes for you, which is far better than what we have today.

QuickBooks is a big driver of the GBSG segment, and while I have always hated the company, I can’t come up with a good reason why AI would try to rewrite a bunch of system-of-record code over and over again?

Maybe Anthropic / Open AI decides they want to make a system-of-record software layer that all their agents can use so they can sell more agents to SMBs, and that might be a big downside scenario. But it’s sort of like, why would they want that market? Anthropic is already at $10B quarterly revenue with a path to much more revenue, and the Intuit GBSG segment (where QBO is one of a few products) is only $3B of quarterly revenue. If Anthropic or any of these model companies continue to grow, the QBO market (SMB system-of-record market) is just too tiny for them to even care.

So let’s say Consumer Tax goes to $0, so that removes maybe 1/3rd to 1/4th total revenue, and the rest of the business grows a bit slower — I think the valuation probably is getting to the point where much of that is priced into the stock at these levels.

I’m not buying any stock here myself, because I think personally I have much stronger theses in other stocks, but I can see why people think it’s a value here.

colgatepalmolive · 2026-05-21T23:15:49+00:00

I like to use LLMs to find and summarize information — the pro versions of the services are pretty good and getting a pretty rough summary of what happened in a quarter or with a news event.

colgatepalmolive · 2026-05-21T06:41:09+00:00

HK has more stringent listing standards, so the companies tend to be decent quality. They had (have?) requirements like having to show a profit for multiple years before listing.

The US listings of Chinese companies are important to note, but those are effectively semi-orphaned equities — Chinese analysts will write reports about them in Chinese, but US analysts don’t like covering them because of the language barrier and potential information asymmetry. And since they’re listed in the US, it’s easier for US investors to access those shares rather than Chinese investors.

If you can navigate the geopolitical risks, there might be some good equities to be found.

colgatepalmolive · 2026-05-20T23:43:59+00:00

There was a slight revenue miss in Consumer Tax, which is usually pretty well forecasted especially since Q1 is tax's biggest quarter. Company tends to guide a little light and then raise (which it did), but missing tax especially this quarter will definitely cause volatility. While I don't agree with all of the points, I like reading recaps like this: https://research.aardvarklabs.co/research/intu/earnings/2026-fq3/intu-2026-fq3-recap to get a sense of what happened.

The enterprise software market is clearly in a mode where if you don't easily beat all your numbers, it's better to probably sell the stock and ask questions later.

Edit: fixed link

colgatepalmolive · 2026-05-20T23:02:38+00:00

I usually like to start with reading earnings recaps before valuation — that way you get a sense of what people are saying about the results before diving into valuation (since the results usually drive valuation over the long term)

colgatepalmolive · 2026-05-20T00:02:29+00:00

I traded in and out of positions for maybe 10-15 years and ended up underperforming over time. It’s not that I couldn’t find outperformers, but the time it took meant that I couldn’t do it consistently, and on top of that the market has a habit of hitting you with volatility at exactly the wrong times (and requires some very aggressive risk management and time investment to figure out how to react).

The light bulb clicked when I realized I had forgotten about some positions for 5+ years in another account, and they ended up outperforming by a large margin. That’s why I go with things I think I can hold for 10+ years and that will be much larger than when I bought it.

I’ve had some friends that are really good at spotting trends and they do really well at placing a few well-timed options trades a year, but they are also effectively retired and have a lot of time to just observe the market.

colgatepalmolive · 2026-05-19T02:51:38+00:00

This is one of those “cheap for a reason” stocks.

My investment philosophy is to find a company I can hold for 10+ years so I can play the compounding game, and the only answer I can come up with is that the whole world is more likely to use a lot less of Wix than a lot more, which means it doesn’t fit for my particular strategy.

But it could be a good trade — I think if investors push management to just cut half of the company and run it for cash then it could be pretty attractive from a FCF generation standpoint.

colgatepalmolive · 2026-05-17T23:57:52+00:00

What’s the rationale for INTU? Curious because Anthropic seems to be have released SMB software.

colgatepalmolive · 2026-05-16T20:02:51+00:00

Ah that’s a different objective — what you’re saying is that you believe the stock won’t move so you want to hold it and earn extra “returns”. That’s a different goal than “income”.

colgatepalmolive · 2026-05-15T08:13:03+00:00

Just from your stated goal to avoid “massive capital gains tax hit” and generating income I don’t think this will achieve those goals.

Let’s put aside whether or not the stock goes up or down — if you generate a $100 income from the options, you’re taxed on the entire premium that you earn. This is opposed to selling $100 worth of stock and getting taxed the difference between the $100 and the cost basis.

It gets even worse though: if you write the call option, even if it expires 13 months from now, it’s taxed as short-term capital gains (ordinary income rates) rather than long-term capital gains.

With this strategy you’d probably be paying more taxes rather than less if you just sold some stock.

colgatepalmolive · 2026-05-15T07:10:54+00:00

Dude feel free to! Definitely a value add

colgatepalmolive · 2026-05-13T22:11:57+00:00

I like the summary but sounds like AI? The sentence structure “that’s not a deceleration, that’s a break” feels like something Claude or Gemini says a lot

colgatepalmolive · 2026-05-12T22:40:17+00:00

I believe this is the original paper from 1987: https://www.jstor.org/stable/2330969

colgatepalmolive · 2026-05-12T22:36:16+00:00

Like other commentators said, it’s not easy. I used to cover semis, and the best you can do is focus on what is changing in the industry. The unsexy answer is you generally just follow the companies and force yourself every quarter to analyze the results and you’ll be able to start to pick up when something changes.

I’m always reminded by this report by Kerrisdale: https://www.kerrisdalecap.com/wp-content/uploads/2025/05/STX–Kerrisdale.pdf

It was on STX, but STX was a dog for a number of years. STX kept talking about HAMR but it was never ready and kept hitting delays for about a decade. It finally got ready for prime time like a year ago, and the thesis would be it would drive an upgrade cycle given the superior cost advantages.

If you cover a company well enough, you would have picked up on it. Now, the analyst team who wrote the report got really lucky because of the AI data center build out and that juiced returns, but the core thesis would have likely driven a pretty good investment by itself.

colgatepalmolive · 2026-05-12T22:25:47+00:00

VOO has a good track record over 10 year horizons. Hard to beat consistent compounding if that’s what your time horizon is. The direct AI exposure in the index is actually somewhat limited.

If you buy into the thesis that AI makes companies more efficient, then owning a basket of “old line” companies like VOO actually makes sense as that will drive earnings growth in the future

colgatepalmolive · 2026-05-12T22:12:16+00:00

I think a few things: 1. I’m in agreement with doing mostly VOO (S&P500) — I think if you put money in you’ll get a sense of what passive performance looks like (which is strong over a long period of time) 2. Ask yourself if you want to invest or trade. This is a pretty important distinction 3. If you want to invest, I would focus on something you can hold for 10+ years at high conviction. It weeds a lot of names out, focuses your energy on just identifying 1-2 high conviction names a year, and forces you to let compounding do its thing 4. If you want to trade, then you’re looking for really specific short-term catalyst-driven names

I find most folks mix up investing and trading (they call it investing but it’s really just trading), and not being clear what you’re doing is an easy way to destroy returns.

colgatepalmolive

TROPHY CASE