Quality Capital

@VladBastion Cyclicals always look cheap on peakish earnings

Micron $MU is one of the rare S&P 500 stocks that currently ranks in the top 20% by Growth, Quality, Value, and Momentum. Archetype: Elite Compounder at a Deep Discount. As the world's largest pure-play memory maker, Micron sits at the center of the AI infrastructure buildout. After a brutal downcycle in 2022–2023, the cycle has flipped - pricing power is back and margins are exploding.

@capital_mindset That’s the 2018-2019 thesis. They used quite a bit of their untapped pricing power and the regulatory environment is much more complicated and uncertain than it was just 12 months ago. Not simple at all imo

$FICO is just so juicy to ignore here. Thesis is simple: you have pricing power with some multiple of volume as a factor to growth. Long-term rate sensitive only because of the volume question. Needs relatively low capital investment to grow and as a consequence will likely always demand a premium to market. The only long-term risks honestly are these closed-loop underwriting environments from some of these promising fintechs, but even then what they are tackling is not the lion's share of finance. FICO is probably going to maintain its status as the lingua franca of finance. I love the Pulte drama that I've called out several times before. Guy is hilariously attacking this company when they make up such a small % of the cost of a home purchase. To conclude, you get a nice pick up in volumes... well this thing is off to the races. But you don't NEED that to be the case. But it helps alot in the forward return potential.

@insureperson Not sure what is the issue.. it’s too low? And redundant reserves is kind of a concept where it’s impossible to really know the real value. Could be 20 or 100 or defficient by 50bn$, no one really knows

The P&C industry faces over $20B in redundant loss reserves as of year-end 2025, signaling potential inefficiencies in reserve management. This surplus raises questions about underwriting practices and may indicate a shift in claims experience. Insurers need to reassess their...

@SmeadCap @Cole_Smead @activemanagers Is there a recording of this?

This morning, CEO & Portfolio Manager @Cole_Smead presented "Manias in American Capex Cycles" at the Value Invest New York 2026 conference hosted by @activemanagers. His presentation covered past investment bubbles coinciding with emerging technologies—and how those historical lessons shape our thinking today.

@gordocap18 @Divergent7651 Agreed on $VRSK, not clear on indexes and credit rating, I feel the so-called MOAT is more related to the brand and for FICO, kinda feels the same + the regulatory aspect. Not sure its much about data and/or proprietary processes

Firms with proprietary, mission-critical data and strong network effects are well insulated from AI disruption. Ratings, indexes, insurance data, & credit scores are deeply embedded in the financial system & would require complex coordination to disrupt. $FICO $SPGI $MCO $VRSK

@TSOH_Investing sure, I'll dm you a few thoughts later on. I don't follow DG/DLTR that closely so not sure how Action would stack up, but on an absolute basis the economics are quite interesting.

@QualityCap0 I have not, mind sending more info?

Today's TSOH Investment Research Dollar General: Closing The Gap $DG

@oguzerkan this guy being long these markets shouldn't mean anything. He has conviction, you should build your own and in the case of a sell off you'll have a better idea of what to do. Otherwise, you'll probably end up selling for a loss.

Stanley Druckenmiller: “We are long South Korea, Japan and Brazil.” It’s insane to me that people are dumping $MELI and $NU while they are at their lowest valuation and Druckenmiller is long Brazil. Two of the most attractive buying opportunities in the market.

@GHadjia @FishtownCap sure, but $FICO is not getting one cent from the MBS market for scores. Mortage volume is not a growth market, hence having VS as an otpion could clearly impaired $FICO pricing power in the future i.e. not getting the growth form the last 5 yrs = multiple contraction

@FishtownCap Not really. It just shows the difference to the borrower with different risk premiums. That's not what makes a $FICO score sticky though. The gating factor is the securitization mkt.

Recirculating this $FICO piece - the recent VantageScore news is just noise, but to reach that conclusion it requires an understanding of how entrenched FICO is in the mortgage value chain and the fact that credit pull costs are passed onto borrowers.

@lebron_ex @CedarStResearch in some ways yes. PGR still going strong, but getting litlle bit worst every month. I think you can make a case for being long $PGR here, the stock is already priced for a normalization, Geico seems to be having problems again. StateFarm seems the only one growing

@QualityCap0 @CedarStResearch Are the auto insurers like $PGR still digesting post covid comps?

For anyone vested in insurance carriers. For the better half of the past 15yrs carriers workers compensation portfolios have massively benefited from the strong credit cycle we've been in since post GFC. For those that might be confused, workers compensation losses are highly cyclical to (1) unemployment and (2) wage growth. Higher unemployment typically leads to higher claims frequency... also fraud and (2) higher wage growth higher benefits on the claims side. If you track the workers compensation industry schedule P data you can see that the large reserve releases carriers benefited from the past 10yrs is starting to slow down if you track LDF's. Anyway, it's something to pay attention to if you own any carriers with large comp portfolios. Full employment is still below 5% and wage growth is flat to down so the frequency/severity claims environment is still friendly, but it's my observation carriers are being more conservative with releases going forward.

@GHadjia It feels like everyone agree on that. But nobody can argue that there’s not more uncertainty around the competitive position of FICO and with any valuation that high the price action is warranted. Lots a stocks behaved like this in the last few months

For anyone saying $FICO has a broken moat bc of more aggressive CB pricing, I would v strongly pushback. The FICO moat is the securitization mkt and that takes a fair bit of work to properly understand. Have a read of the report below to appreciate how entrenched FICO really is.

@BubleQe @mythmakrr Pretty sure the “E” in the P/E still has wti at 65$ (analysts won’t update their numbers until higher price settle in) hence stock looks expensive right now. Obviously prices could go back down if the war ends tomorrow.

@mythmakrr Sadly I think people trimmed on the way up (not me). Missed ~40% upside. Look at valuations also though before making any decisions. WTI 3 month strip is now ~$80/bbl & FX this is > $110/bbl CAD. Stock prices have moved up, but so too has commodity so valuations change.

Might be time to trim a bit of $cnq $cnq.to it was a good run #com

@yummyCenturyEgg Hard lesson. At some point valuation matters. Maybe $FICO position stays intact (most likely IMO) although I don’t think the valuation it had is coming back. Not much is worth 30x earnings, much less 40-50x.

Because the $FICO shareholders believe in buzzwords, like "compounder", "locked in", "network effect", "flywheel", "pricing power", "moat", "brand", "mission-critical", "winner-reinforcing". They held these beliefs as the valuation got to 30x revenue, and then convinced themselves that this is a cheap asset at any price (because other people also repeated the same thing). And then anchored themselves to the high price and doubled down after it dropped. Now the bagholder mentality sets in and they will ride it all the way down until the bell curve formation is completed, all the while acting like they want to hear the bear thesis when in fact they just want to reconfirm their priors and assuage their ego. Or maybe it's just market volatility, hahaha I don't know.

@TSOH_Investing What is your take on what’s going on at Geico?

$PGR Personal Lines Annual Underwriting Income

@Larryjamieson_ CBs are also down on the rumors of VS grid being release, feels like the market expecting bimerge at the same time, as you’re saying. Anyway, I could see a scenario where bimerge doesn’t change anything really on the volume front, pricing could offset though.

@QualityCap0 Honestly thought Pulte would have potentially aired out a new credit file mandate by now… maybe they are waiting until vs4 is released

[Update] More VantageScore/FICO Score Drama $FICO $EFX $TRU $EXPN Link: buybackcapital.substack.com/p/update-more-…

@ManuInvests IMO this is not the cause of the drop in the last 2 days. Rumors that the GSE's could release the pricing for Vantage and not clear if this will come with a move to Bimerge. this could be material for FICO and the bureaus

$FICO down 20% in 5-days due to VantageScore price cuts and announcement of $1B Offering of Senior Notes. Opportunity or cause for concern?

@QualityInvest5 There's rumblings about the GSE's releasing the LLPA grid (pre $TRU ID yd). Last piece to make VS usable in the comforming market. I don't think the selloff is about the price being 99c. In the current envrionment, it's not surprising to see the stock being sold, it is a threat.

$FICO down 10% over something that WON'T impact their main moat (secularization) Market is insanely dumb sometimes