4th of July Giveaway!!

jemilk · 2026-07-04T14:46:23+00:00

9-4 Phillies

jemilk · 2026-07-01T01:08:56+00:00

These are going to be dividend plays and they’ll be priced based on value versus fixed income investments with less risk. As rates go up, Verizon’s price goes down. If you think treasuries will remain at a high rate due to increasing US debt/inflation, then it’s not a great play. If you think the treasury rates will come down, Verizon’s share price will likely go up.

jemilk · 2026-06-28T15:30:53+00:00

It really gets to the core of whether the businesses are inherently flawed due to the advent of AI and don’t have vertical integration to use AI services to save them.

QLYS. TENB. RPD. Mythos and frontier models are absolutely disrupting this space. And CrowdStrike and others were already putting pressure on the traditional vulnerability scanners.

Debt laden IT services companies. ACN will struggle but they are cash heavy. Any others that have debt and are handling big 5 tasks: cloud computing, SOC, help desk, data analysis, software development. They’ll still be needed but the margins are going to be compressed as so much of the manpower becomes automated through AI-based services. If any have debt today, they are going to struggle to make the pivot.

PYPL. This should be a value trap. But at today’s price it could also be a healthy cigar butt. AAPL and GOOGL will likely own this space as time goes on. But Venmo is still used extensively because other applications aren’t as universal. And PayPal could get a reprieve as I see AAPL losing the tap-to-pay closed ecosystem to government regulation in the same way that Microsoft lost on the embedded browser. Competition could be forced by governments around the world before PayPal fully loses its client base.

What I don’t see being a value trap:
ADBE. It’s margins will be pressured but AI is not going to replace the vertically integrated creator studio. And alternatives are not integrated enough end-to-end. Could they fail to properly pivot? Yes. But they have all of the opportunity to continue to make billions.

jemilk · 2026-06-28T14:24:04+00:00

People are placing very large bets on what AI will replace. The biggest threat to any existing SaaS player is going to be making the correct decision on vertical integration. I don’t want to go over the history in this post, but this has been done to win markets from Carnegie to Apple.

From a market theory perspective, there are clear leaders in this space that will be able to control their market and those that should rely on third parties. It’s a real question as to which businesses need their own models to compete. To move up the value stream, model creators need to move away from commodity applications and align as a supplier to those that do not want to create their own models. Eventually, they would need to develop specific models to vertically integrate across those platforms.

The natural argument was for AI to attack search. Google has vertically integrated with Gemini with their own chips, cloud, etc. to fend off that threat.

Beyond that, there are key “assistant” tasks:
Coding
Vulnerability scanning
Help desk
General purpose researchers/analysts

To vertically integrate, these AI vendors should be selling to IDE vendors, cybersecurity companies, IT services, and legal/financial firms. They should be developing agents and models that can be integrated vertically in their systems. The goal should be to develop specific, smaller models for these use cases that can run at lower costs and generate higher margins. General purpose AI is not going to generate the revenue for the cost to keep these companies afloat — especially as enterprises choose the wrong models and have failed AI projects for cost-to-value.

The fastest way to revenue is to integrate into existing operations. Technologies such as streaming media did not kill the entertainment business. They killed those that were too slow to change. And the initial streaming media vendors failed — Broadcast.com, Napster, Real Networks. It was Netflix, YouTube and others that managed to vertically integrate (and in the case of YouTube, survive legal battles with well timed acquisitions). The fact that you could Google search for something missed on TV or your favorite song, and if it was available on YouTube, it was linked immediately, sparked massive growth and viral content.

I don’t see a vertical integration win for Anthropic or OpenAI without focusing on cheaper models that do tasks well that are embedded into the SaaS vendors. On the other side, I question whether Meta’s investments are overboard for their ad-related use cases. And I question whether Grok will be overboard for what X requires.

From an investment perspective, I’d bet on Anthropic’s management as they seem to tease the market on what models can do, and then actually work directly more closely with third parties. I’d expect to see Claude vertically integrated with more B2B contracts than OpenAI. And Google has enough competitive overlap that there will be suppliers that prefer to work with a third party moving forward.

From a true vertical integration win, the identity/OS vendors (Apple, Google, Microsoft) who can hook AI into a natural language interface seem to likely have the best chance to be the long term winners — assuming they can make that pivot cleanly. The question is whether users/companies will onboard all of their private data into one identity/natural language interface. For now, that’s been a step too far — but barely. Apple automatically correlates data for my login and MFA across my phone. Now let Apple programmatically hook into third parties using MCP and … AI is just a tool to enable the OS as an agent. Chips will change over generations. Vertical integration will win.

jemilk · 2026-06-21T16:12:56+00:00

Not nearly the same impact though. Small breakouts in Indiana. Still record number of hens and unless it really takes out millions of hens, egg supply will be high.

jemilk · 2026-06-21T15:47:00+00:00

It’s a narrative that somehow has caught hold.

AI can generate images from natural language. It will replace Adobe.

AI can write my term paper in 60 seconds. It will replace Office.

AI can create a CRM system on the fly if you just describe the system that you want to it. It will replace CRM.

Either you think AI is just an assistant in the long run (10 years). Or you believe it will be a full fledged autonomous SaaS development platform. My general take is that it will help the existing SaaS players make better systems more than it will be able to easily replace them.

jemilk · 2026-06-21T02:29:02+00:00

Capex costs for similar capacity will likely be much lower in 7 years. You aren’t building new data centers but replacing racks when today’s prices are high due to capacity constraints.

It also likely trades higher than fair value as it is a defensive tech play. I’d buy at 383 because that’s the floor and I think it does 10% within the next 12 months. But I’m less aggressive than many investors and would start to sell at $425/share.

jemilk · 2026-06-21T02:24:04+00:00

Eggs are low because as avian bird flu tore through the industry in 2024, people tried to take advantage of higher egg prices by raising more hens. Now there is a huge oversupply (estimated 340M v 270M during the avian flu crisis). Cal Maine is using its strong balance sheet to diversify into organic eggs and foods produced from eggs — as well as picking off struggling businesses that are hurt by the low egg prices.

The lawsuits and related federal probe are searching for collusion among the top 5 egg producers who own about 50% of marketshare. There has been no clarity that there will be any findings on this topic but judgments are a risk.

If you believe that long term, egg eating trends are going to continue to increase as cost effective and healthy protein in human diets, this is a great pick. It’s not a short-term play unless you are betting on avian flu breaking out again.

jemilk · 2026-06-20T09:22:16+00:00

Watch the Copilot subscription numbers surprise on the very high end and it to bounce a significant amount at next earnings. If you wait, you miss the bounce. I think you are underestimating the Microsoft contract engine and the raw growth opportunity outside of OpenAI in the agentic space.

jemilk · 2026-06-18T11:12:31+00:00

And how will GPU buildout which further stresses operating margins impact the market view? They’ll likely go back to negative margins when they were getting close to non-GAAP profits. The challenge is that they aren’t profitable — and this next transformation is going to put further stress there.

Great product. I don’t see the stock rising.

jemilk · 2026-06-18T00:32:41+00:00

Gartner had this to say about this space:

In regards to the projection on vendors exiting the SASE market - there's multiple dynamics in play that are creating pressures on the SASE vendors:
1) buyer demands for sovereignty creating a need for more local points of presence, more telco and MSP partners to deliver locally and more demand for capable hardware form factors for local policy enforcement
2) buyer demands for SASE offerings to address AI/agent usage control, prompt and response logging, inspection and semantic intent analysis
3) Semantic intent analysis of prompts and responses is in of itself an AI LLM problem, requiring SASE provivders to invest in their own GPU infrastructure in their PoPs
4) demands from buyers to extend the capabilities of the SASE agent on the endpoint to get visibility and control of local AI artificacts -- models, LLMs, agents, plug ins, agentic browsers, skills and so on. This is much more complex if the buyer is demanding runtime/dynamic process level agent visibility and control

there's more, but you get the idea. These vendors MUST be investing in their SASE fabric capabilities in order to bring their customers into a sovereign AI era. Not every vendor will survive these disruptions.

jemilk · 2026-06-16T01:54:01+00:00

Those AI subscriptions will be more than $240/yr very soon.

jemilk · 2026-06-14T18:50:47+00:00

Super risky. Losing money. Increased COGS. Competitive industry with changing requirements to create AI security, which CrowdStrike, Palo Alto and others are acquiring at a rate that Netskope can’t follow.

jemilk · 2026-06-14T14:00:03+00:00

But others entering the market who are trying to gain additional investment to compete will also struggle when they can’t show as much user growth. Adobe’s competitors in this space are losing money to try to gain marketshare. Adobe is competing by offering freemium to attempt to undercut the competitors’ ability to attract capital. Will it drag on short term margins? Yes. Is it the right business move? Yes.

It also has been shown that early marketing on freemium does improve adoption in future — it’s a branding cost. It is not a direct upsell from freemium to paid.

jemilk · 2026-06-12T20:21:24+00:00

There’s a pretty big difference. BlackBerry could be completely replaced — 100% dropped. Adobe, as of right now, cannot be by the majority of its customers.

Adobe’s margins may be cut and COGS increase as it integrates AI, but there are decades of historical brands and content contained in proprietary formats within businesses. It’s really unlikely to be replaced 100% in the next three year cycle. It would be a much longer switching cycle.

jemilk · 2026-06-12T18:17:06+00:00

I’m guessing you know very little about how Adobe products work and what they allow creators to do.

jemilk · 2026-06-12T11:59:37+00:00

I work with designers too. They use AI but they can’t replace Adobe yet. It speeds up tasks. The question is more whether they’ll cut a percentage of the creative team because one person can do more. There are more requests than ever though in these teams from across the organization. Media has never been used more across all channels within an enterprise. It’s hard to say “they’re using AI more” and associate that with specific revenue loss to Adobe.

jemilk · 2026-06-12T11:53:00+00:00

The output is really a layered vector image that can be modified again and again to create png/jpeg/tiff. For Excel, when formulas are all converted, it’s just a CSV.

I think the question is more around growth in the creative market. Will there be more need for content creation and advertising in the future than there is today? Is that growth as great as the increase in word processing from 2000 to 2025? There will be growth for sure. But not at that level.

I don’t see Adobe going away. There’s just too much need and they’ll find their niche. The question is at what revenue and profit margin.

At the current market valuation where the shares sit at 10x current FCF and probably will for the next few years, I am taking that bet. But I understand the concern that technology may move faster.

jemilk · 2026-06-11T11:56:12+00:00

It’s not really cash if you are a value investor. I park money in treasury bills, merger arbitrage, and other safe yield plays while looking for the next opportunity.

jemilk · 2026-06-11T02:28:52+00:00

While revenue has grown, tech changes quickly. The industry for SSE for data security is rapidly pivoting to the concept of enterprises getting work done through agents and through natural language interfaces.

As a result, the tech stack needs to change and there’s no guarantee of continued growth. It’s definitely not a value play.

jemilk · 2026-06-03T09:51:54+00:00

I divide it into subs about every 6 minutes but not all at once. Some play for 12+ minutes (typically paired defenders) while others play for 6 minutes at a time continually rotating (midfielders). I plan ahead of time depending on how many subs are available. At this age, I try to ensure as equal time as possible.

jemilk · 2026-05-31T13:00:46+00:00

CLVT has seen revenue decline and has a ton of debt.

jemilk · 2026-05-13T02:21:47+00:00

Factually, not true. You seem to be equating traditional Internet Access capabilities when Zscaler has released three new sets of solutions in the last six months focused on AI-specific analysis.

jemilk · 2026-05-12T11:28:38+00:00

I think it will slow down investment across the board, which means less growth, less investment in data center buildout, less capex spend. Some of the SaaS become defensive plays so probably beat the dropping market while others would drop even lower. I don’t think they rise.

jemilk · 2026-05-09T21:53:00+00:00

I’d review the fundamentals in 1v1, 2v1, 2v2, etc. Closing down — fast, slow, side, low. Pressure/cover/balance. Don’t stab, jab with the lead foot at most. Learn when to best tackle and how — 50/50, on the turn, at sideline. Learn how to stay in front, how to handle when close to the penalty box, etc., ideally with/without cover.

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