Prakash

Weekend analysis seems to point to strength in $BTCUSD and $SLV. Now there is low correlation between the two unless the mighty $ is headed for a fall among other things

Bitcoin $BTC is back over $82K 🟢

Lufthansa cuts 20,000 flights to save fuel as prices soar, per FT

𝗦𝗧𝗔𝗔𝗥 𝗦𝘂𝗿𝗴𝗶𝗰𝗮𝗹 𝗹𝗼𝗼𝗸𝘀 𝗹𝗶𝗸𝗲 𝗮 𝗰𝗹𝗮𝘀𝘀𝗶𝗰 𝗰𝗼𝗻𝘁𝗿𝗮𝗿𝗶𝗮𝗻 𝘀𝗲𝘁𝘂𝗽, 𝗯𝘂𝘁 𝗽𝗮𝘁𝗶𝗲𝗻𝗰𝗲 𝗶𝘀 𝗿𝗲𝗾𝘂𝗶𝗿𝗲𝗱 $17.40 stock price | ~$187M cash | Enterprise value ~$700–725M STAAR Surgical ( $STAA ) today sits in an uncomfortable place in the market, which is often where the more interesting opportunities begin. The company is small, with a market capitalization of roughly $850 million and an enterprise value closer to $700 million once you account for its ~$187 million in cash and no debt. It operates in the shadow of much larger players like Alcon ( $ALC ), Johnson & Johnson ( $JNJ ), and Bausch + Lomb ( $BLCO ), yet it occupies a part of the market those players do not fully control. STAAR’s business is simple to describe and difficult to replicate. It implants a lens inside the eye to correct vision, rather than reshaping the cornea like LASIK. The procedure is particularly effective for myopia, or nearsightedness, a condition where distant objects appear blurry because the eye focuses images incorrectly. Myopia is rising globally, especially in Asia, which is one reason the category has grown so quickly. The company’s approach has clear advantages in certain cases. It is reversible, it preserves the cornea, and it often delivers better outcomes for patients with moderate to severe myopia who are not ideal candidates for LASIK. It also requires surgeon training, regulatory approvals, and years of accumulated experience, which together create a real, if not absolute, moat. For years, the story worked. Growth was strong, margins were high, and China became the engine. Then the company ran into a classic problem, not of demand disappearing but of inventory building up in the channel. Management stopped shipments to reset the system, and reported sales collapsed, especially in China. The market treated that as a broken story rather than a reset. The stock followed, falling to around $17.40. At the same time, strategic interest emerged. About a year and a half ago, there were credible discussions around a sale above $50 per share. More recently, Alcon ( $ALC ) made a firm cash offer that was ultimately raised to about $30.75 per share. That deal failed. Broadwood Partners, the largest shareholder and a holder for more than 15 years, blocked it. They argued the process was poorly timed and did not reflect the true value of the business. They were also critical of how the go-shop was conducted, describing it as rushed and restrictive, limiting the ability of other bidders to properly engage and complete due diligence. Broadwood’s position is not that the company should never be sold. It is that it should not be sold here. They have indicated they would be open to a transaction, but only after the business stabilizes and reflects normalized performance. They had no interest in selling at around $30 in the middle of a downturn. From their perspective, that would have meant selling a unique asset at a cyclical low. They continue to believe the company is worth significantly more. That leaves the stock in a familiar contrarian position. A differentiated business, a real moat, a strong balance sheet, and a product still being adopted globally, but a narrative dominated by one disrupted geography. The question is no longer what STAAR does. The question is whether China was a temporary reset or a permanent peak. Broadwood is clearly betting the house on the answer. They knew rejecting a $30.75 offer would likely send the stock lower, and it did, yet they still blocked the deal. The position represents roughly 20% of their fund, implying unusually high conviction. Either way, this is not a short-term situation. The setup may be contrarian, but the resolution will take time, so no rush to buy.

This is now a powerful "triple six" rally. The S&P rallied 6% in 6 days from a 6-month low. It failed in 2001 and was painful in 2008. But otherwise, excellent one-year returns. It bumped up the probability of a positive one-year return to 81% from 55% a few weeks ago.

Interesting to me that even after the current minor correction in P/E we are still in the range of consistent negative 5 year forward returns