Ez

@realroseceline Very long winded way to say nothing.

None of this means the market is always right. Markets make mistakes all the time. In fact, some of the greatest opportunities in investing come from identifying situations where the market has become too optimistic or too pessimistic. But investors should be careful about assuming the market is stupid simply because a stock continues falling while current results continue improving. Often the market is focused on a completely different question. The real challenge is determining whether you are looking at a business whose future is brighter than the market believes or a business whose past is brighter than its future. That single question explains a remarkable percentage of investment outcomes. It is also the question sitting at the center of the entire $ADBE debate. Ultimately, $ADBE is not just a story about software or artificial intelligence. It is a reminder that investing is an exercise in forecasting rather than observation. The present is visible to everyone. The future is where the debate takes place, and that future is what the market is attempting to price every single day. For what it’s worth, $ADBE falls into the “too hard” pile for me. I am neither particularly bullish nor bearish, as I think the long term impact of AI on the business is difficult to predict with confidence. Since $ADBE is one of the most discussed stocks on this platform and generates strong opinions from both bulls and bears, I thought I’d share my two cents. 🌹 2/2

Thoughts on $ADBE $ADBE is one of the most fascinating stocks in the market today because it highlights one of the most important lessons in investing. It continues to execute at a high level. Revenue continues to grow, margins remain exceptional, free cash flow is enormous, and millions of customers still rely on $ADBE products every day. Yet despite all of that, the stock has struggled for years hitting all time lows. This confuses many investors, especially newer investors. They look at the financial statements and see a business that appears healthy. Then they look at the stock price and assume the market must be making a mistake. After all, if the business is improving and the stock is falling, shouldn’t that create an even better opportunity? Sometimes the answer is yes. Some of the greatest investments in history occurred because the market became too pessimistic about a business whose future remained bright. But it is important to remember that the market is not trying to value what a company earned previously or even currently. The market is trying to value what that company might earn in the future. This is where the story becomes interesting. $ADBE looked cheaper at $500 than it did at $600. It looked cheaper at $400 than it did at $500. It looked cheaper at $300 than it did at $400. Many investors looked at the declining valuation and concluded that the opportunity was becoming more attractive. Yet the stock continued to fall because investors were not debating the current business. They were debating what the business might look like in the future. For decades, $ADBE built one of the strongest moats in software. Photoshop, Illustrator, etc became the standard tools used by creative professionals around the world. Entire careers were built around learning Adobe’s products. Millions of designers, marketers, photographers, and video editors integrated $ADBE into their daily workflow, creating an ecosystem that appeared almost impossible to disrupt. Then artificial intelligence arrived and changed the conversation. For the first time, images could be generated with a prompt. Videos could be created automatically. Design work that once required years of expertise could suddenly be performed by almost anyone. The question investors began asking was not whether $ADBE remained a great company today. The question was whether $ADBE moat would be as strong five or ten years from now as it was five or ten years ago. That distinction is incredibly important because stocks are ultimately claims on future cash flows, not current cash flows. Imagine owning a toll bridge that earns $100 million per year. If someone announces that a second bridge will be built beside yours five years from now, the value of your bridge immediately changes even though today’s profits remain exactly the same. Nothing changed in the present, but something changed in the future. This is why investing can be so difficult. The numbers investors see today often tell a very different story than the future investors are attempting to price. A business can appear healthy while its long term competitive position weakens. At the same time, a business can appear expensive while its future becomes far more valuable than most people realize (ie $PLTR). The market spends surprisingly little time pricing the present and an enormous amount of time attempting to price a future that has not yet happened. This is also why one of the most dangerous phrases in investing is, “The stock is down but the fundamentals are improving.” Investors have said that about newspapers as the internet emerged, department stores as ecommerce gained share, and cable television as streaming began taking over. In many cases the current business remained healthy long after the future business had already started to deteriorate. 1/2 👇

@Jovan_Jankovic3 @MercuriusFilius Not applicable

@MercuriusFilius What is the cost of equity?

How would you answer this common Morgan Stanley interview question?

@NickNemo17 @orrdavid @CliffordAsness Ahem.

I took a bearish post on $CRSR well outside of the bounds necessary to make my case, or bring attn to the dialectic. To that I apologize to @orrdavid . I made errors on his private fund, and $ORR is not the worst ETF. To @CliffordAsness , I concede. Will continue to take note of your views for my own journey. @HML_Compounder @joinyellowbrick @SowingAlphaSeed I was a dick. Wish you all the best.

@francoischungus @NickNemo17 @HML_Compounder 😂

@NickNemo17 @Ezbake0ven @HML_Compounder

That’s not the question. It is, why: Long term dividend shorting should include the cash out the door. If you are short BDCs, or $SDIV , there is carry. Notice you didn’t say exactly — my 2nd point. This is not equivalent to your product. Returns are already reported.

@NickNemo17 @HML_Compounder

@HML_Compounder @Ezbake0ven So is a 1% borrow to short vs 10%

@NickNemo17 @HML_Compounder Escape into semantics, Nick

@HML_Compounder @Ezbake0ven And once again you’re strawmanning. I never said fee If you want to be credible stop trying to win an argument against something I never said

@NickNemo17 @HML_Compounder @linnux_arch @CliffordAsness Go read your original post claiming all over the place that gross expense was not cleared in return… Do you forget your own posts? Ease of the key bumps, Nick

@HML_Compounder @Ezbake0ven @linnux_arch @CliffordAsness I set the goal posts and they have not moved. You don’t get to decide where they are if you’re criticism my statements You cannot show the equal offset. If it was .98 equal offset and the arb was only over a penny that’s a loser.

Grok and @HML_Compounder are right, @NickNemo17 is wrong. It is total idiocy that the dividends on shorts are reported as an “expense.” When the dividend is paid yes the short has to pay it to the lender, but the stock you are short drops by the (very close to exactly) same amount. There is no economic “expense.” Zero. Modigliani and Miller are rolling in their graves that people are still arguing about this.

@NickNemo17 Literally Nick, where did I say anything about the performance itself?

@Ezbake0ven Show me how the total return is positive: x.com/nicknemo17/sta…

@NickNemo17 Again…sir, this a Wendy’s…you keep strawmaning Cliff Asness called you a moron, the guy with a monkey picture called you a moron… If it quacks like a duck…

@NickNemo17 @linnux_arch @CliffordAsness @HML_Compounder lol you dont even understand what you're arguing anymore... What does any of that have to do with the ACCOUNTING treatment of dividend payments on a short? Like Cliff said - sir, this is a Wendy's.. In over your head.

@linnux_arch @CliffordAsness @HML_Compounder Ex-div pricing is imperfect. That’s the whole point. You still have cash out the door, borrow, timing, and path risk. ORR made money short BDCs. Kudos. But the dividend v price isn’t alpha. See him losing money both ways on $SDIV .

@CliffordAsness Good luck with the fundraise, Nick!!

Exactly is exactly not the point. Take the L fool. You are embarrassing yourself. And is someone talking about BDCs and carry here? You know this is a Wendy’s right?

@CliffordAsness He’s a fucking charlatan and pretender. Thanks for the laughs, Nick. @NickNemo17

@NickNemo17 And therefore the total return…just in case that’s a hard thing for you to connect.

@NickNemo17 Nick, you are so confused - the price reflects the dividend payment and shows up in the total return…the statement expense is ACCOUNTING. The dividend shorting is INCLUDED IN THE PRICE.

@CliffordAsness @ptuomov @HML_Compounder @NickNemo17 Tough luck, Nick - now how about that forward? 😉

@NickNemo17 @fibonacki Just to clarify…because it seems like you don’t know from your last tweet. 12.10 bid implies you’re buying…but this tweet comes right after I asked you to set the offer… Is it bid or ask, Nick?

@Ezbake0ven @fibonacki 12.10 bid

I’m done talking about $ORR…. Returns TBD. Instead, I’ll be talking about how right I was. I think this stock is going over $20, I took the position down some. But it’s still cheap, and certainly not an “AI-loser”. Anyone that says otherwise is lazy / coping. $CRSR

@NickNemo17 @fibonacki You should have been a market maker…woulda been a nice pad to the PnL

@Ezbake0ven @fibonacki You are price in a model, not reality. lol

@NickNemo17 @fibonacki Why would the forward be below spot, Nick? What might that say about the dividends impact on the equity value? And just so you don’t get confused around the accounting like you did earlier, I kept it pure price for you This is not smooth model logic, it is basic cost of carry.

@Ezbake0ven @fibonacki You are 24 years old. As if price are set in a model Embarrassing Your logic vol curves, rates, everything would always be smooth. You’ll learn man. Good luck on your journey

@qcapital2020 Because growth estimates TOTALLY aren't a contrarian indicators. 05/18/26 BofA Quant Desk - suggested reading.

The hardest pill for bears to swallow: The S&P 500 is up +10.3% YTD, yet the forward P/E has fallen from 22.3x to 21x This rally hasn’t been driven by speculative multiple expansion It’s been driven by earnings estimates rising faster than stock prices

@HighyieldHarry It’s more embarrassing to continue to increase opex line items with no measurable impact to overall opex or revenue. There will be more cases, esp given anthropic billing changes. CTOs have the challenging requirement of properly allocating access into measurable improvements.

Am I the only one who thinks this is embarrassing to say publicly?