Dan Rasmussen

Very excited to announce that my new book The Humble Investor is available for pre-order! See below for links to bookstores...

One does not need to be a bear on technology to identify that this moment in market history is likely to be characterized by over-investment, over-spending, excessive valuations. Disappointment is inevitable as an uncertain future surprises a consensus narrative that is too specific and too confident relative to the pace of change. ~ @verdadcap mailchi.mp/verdadcap/pric…

Japan has the most >200 year old companies in the world (56% of 5,586 globally) but still gets assigned negative terminal value multiples

The best counter argument to my piece yesterday

I like when two investors I admire disagree on his latest article, @verdadcap calculates that ~75% of the current value of the global semis industry (13% of global market cap and ~17% of US market cap) is derived from CF projections that are > 10 years in the future while @GavinSBaker on his recent appearance at Sohn Investment Conference 2026 said, “I am optimistic that we may avoid a bubble this time. Smoother for longer is what we all want... b/c we have fundamental shortages of watts and wafers” both quote @mjmauboussin, so may he be the one cutting the Gordian knot?

there’re many old value pe/hf dogs who are one-dimensionally cheap and love the compelling math of bad companies, so they end up in value traps, grindy 2 baggers over 6 yrs etc (i.e. little to no chance of compounded/non-linear outcomes from things like high returns on capital etc) but there are also many out of touch vc/growthy folks who seem to have basically no regard for things like math, fundamentals, price etc. so i have a theory that best investor guys in 2026 should be like 50% Buffett/Thorndike/Rasmussen/etc and 50% Paul Graham/Theil/Helmer/etc said differently, some combination of each side of the below dichotomies: >empirical/data-driven vs anecdotal/feel (although I think Helmer’s a pretty rigid empiricist) >avoids egg-on-face vs believes “pessimists-get-to-be-right-but-optimists-get-to-be-rich” >base-rates/past vs open-to-paradigm-shifts/new-world-economics (e.g. buffet in late 90’s annual was asked why he didn’t invest in internet/tech and he said something like “show me one internet company w more than $100m revs”…so correct via base rates, but also just so wrong) >rigid vs flexible >multiples etc. vs network effects/winner-takes-all, returns on capital, 0 marginal costs, TAM etc >math vs idea >value vs growth >east vs west >quantitative vs qualitative >past vs future >pe guy vs vc guy etc (for sure overly rigid dichotomies but each side is probably some composite those words) I think Steve Mandel has some great commentary that gets to this balance, here's one example (and Mandel generally seems like a good representation of this balance) (via awesome @joyscompounding interview) (@hamiltonhelmer, @verdadcap, @paulg tags) (pls send farm any $2m EBIT+ deals!)

Today’s piece from @verdadcap is spot on: mailchi.mp/verdadcap/pric… I am very much AI pilled, use it all day for everything, and think it is going to change the world meaningfully. It’s the most transformative technology we’ve seen in decades, and is incredibly dynamic in its use-cases. I also think we are in some kind of mania / frenzy that eventually will have to pop. I’ve read enough history to not really buy into the ‘this time it’s different’ view Particularly loved the ending: “The future is too uncertain and unpredictable to make high-certainty bets. Yet today’s market—and today’s largest tech companies—are taking one of the largest bets in the history of economics on the future of a new technology. One does not need to be a bear on the technology itself—we are power users and love AI—to identify that this moment in market history is likely to be characterized by over-investment, over-spending, excessive valuations, and inevitable disappointment as an uncertain future surprises a consensus narrative that is too specific and too confident relative to the pace of change.”

@ptuomov what stage are we in now? I'd say 6-7?

THE LIFE CYCLE OF A BUBBLE 1. A genuine advancement creates real productivity gains. A real technological or economic improvement increases productivity and leads to genuine revenue and earnings growth. 2. Stock prices leak into reported profitability. Rising stock prices improve reported earnings, financing conditions, collateral values, and perceived business performance. 3. Reported profitability drives real investment. Companies increase hiring, capital spending, construction, expansion, and speculative investment because of their own or their customers’ reported profitability. 4. Bubble beliefs and abandonment of present-value discipline. Investors stop focusing on discounted cash flows and begin relying on continuing gains from the greater fool theory, believing they can sell later at a higher price. 5. Inflows from sideline investors. Previously cautious investors enter the market in large numbers. New money from existing and new investors participation drive prices higher. 6. Extreme overvaluation. Prices rise far above historical normal multiples of reported fundamentals, even ignoring the fact that reported fundamentals have been driven by rising stock prices. 7. Issuance. Companies take advantage of high valuations through IPOs, secondary offerings, stock-based acquisitions, SPACs, and insider selling. 8. Exhaustion of inflows. The flow of new investors starts shrinking while existing investors approach their risk and leverage limits. Volatility and dispersion grow and gains become less uniform across stocks. 9. Earnings disappointments from slowing price appreciation. As stock prices stop rising rapidly, the earlier boost from higher valuations into earnings weakens or reverses. Companies begin missing expectations. 10. Stock-price collapse with high volatility. Confidence in both the fundamental growth and in the greater fool theory break down and prices fall sharply. Volatility rises further as leverage unwinds. 11. Bear-market rallies and progressively greater exhaustion. Bargain hunters and frustrated latecomers repeatedly buy the dips, creating violent temporary rallies that fail. Markets make lower highs and lower lows. 12. Capitulation, abandonment, and normalization. Bubble participants eventually give up in disgust or exhaustion. Volatility falls, valuations normalize, and the market returns to more ordinary behavior.

69% of private credit is rated B- or worse. A quarter is already CCC. The reality of the asset class is concentrated subprime corporate lending.

If you're wondering why Korea is up 200% in the past year... via @DeutscheBank theideafarm.com/markets/korea-…

27% of PE-owned software companies in NA have been held 5+ years. 11% have been held 7+. The exit market for these names doesn’t exist: > Can’t be sold to strategics (their stock is down) > Can’t be sold to PE peers (they’re not deploying) > Can’t be IPOed (window closed for AI-disrupted SaaS) > Can’t be refinanced cheaply (debt costs up) > Can’t be marked down by the GP (fund optics) Continuation funds it is.

Over the past 20 years, large endowments have upped their VC/PE/PC allocation by 22.4 percentage points Mainly at the expense of public equity and fixed income... via @neubergerberman

Japan's net debt is now a lot lower than most people realize. This is far healthier than most western countries.

Investing in Korean equities in 2026 is the closest thing the modern investing world has to a time machine, because what you are looking at, when you open a screen of Korean small and mid caps, is structurally identical to what Japanese deep value looked like in 2018, which is structurally identical to what American small-cap value looked like in the late 1970s, which is to say, a developed market full of profitable, debt-free, asset-rich companies trading at fractions of liquidation value while a generational catalyst builds in the background that almost nobody outside the country has yet noticed. The catalyst is the Corporate Value Up Program, launched by the Korean government in February 2024, modeled explicitly on the Japanese reforms that produced one of the great equity bull markets of the last decade. The program is voluntary, but the pressure surrounding it is not. The Korea Exchange has launched a public Value Up Index that names and tracks compliant companies. The National Pension Service is voting against management at companies that fail to address valuation. The dividend tax was cut from a top rate of 45% to a range of 14 to 30% in December 2025, which is the kind of legislative change that fundamentally rewires the incentive structure for every founding family in the country. Activist funds, both domestic and foreign, are filing campaigns at a rate that has never been seen in the modern history of the Korean market. By the end of 2025, more than 170 companies had already disclosed Value Up plans. The Value Up Index itself has roughly doubled since its launch. This is not a screening artifact. This is not an emerging-markets discount. Korea is a developed economy with a sophisticated regulatory regime, a functioning court system, and a stock market that has operated continuously since 1956, and the stocks are cheap because of a specific cultural feature, the chaebol structure and the founding-family hoarding that produced it, that is now, for the first time in a generation, under coordinated political and regulatory pressure to change. The dam that held the discount in place for 30 years is cracking. The water has barely started to move. The American funds that will eventually allocate to Korea are still figuring out the operational mechanics. The American retail investor, who can now access the market directly through a standard brokerage account thanks to the FSC’s April 2025 rule changes, has not yet noticed. You do not need to pick winners. You build a basket of 30 to 50 names, sized small, hold for a decade, and let the math do what the math has always done. Some will go nowhere for years and then re-rate 4x in a quarter when the activist arrives or the founder retires or the next round of pressure lands. You cannot predict which one will be which. You do not need to. You need to be in the basket when the catalysts arrive, and the catalysts are arriving, in 2026, faster than they have at any point in the modern history of the Korean market. The window is open. The math is the math. The early movers will be rewarded the way early movers are always rewarded in trades like this one, which is generously, and the late ones will, as always, arrive in time to be the exit liquidity for the people who showed up while it was still uncomfortable. The trade is sitting there, in a market that has just become accessible, in a moment that almost nobody outside a small group of dedicated value investors has yet recognized, and the only thing standing between you and it is a brokerage account and the willingness to do the unglamorous work that almost no other investor will bother to do.

And I should note this is all based on the excellent work of @HannoLustig

Read our full analysis here: mailchi.mp/verdadcap/japa…?

Starting in 2012, the Bank of Japan began buying domestic equities at scale. Japan also built something few countries have ever attempted: a de facto sovereign wealth fund financed at near-zero borrowing costs.

Private credit’s secret: Addbacks have gotten more aggressive, meaning leverage is increasingly understated.