Long-Only Pony
4K posts
@BoringBiz_ Those MDs didn’t get there because of their college resumes, they got there by surviving 15+ years of client pressure, deal cycles, and capital allocation decisions that a campus CV never reflects.
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I would pay to watch a game show where you make investment banking and private equity MDs apply to analyst positions at their firm using their college resumes
Can almost guarantee that 95% of them would never land an internship, let alone a full time role
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@FundamentEdge He runs great a great pod
Looking forward to listening
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This billionaire broke into hedge fund land after winning four VIC Best Idea awards. Now he runs a $5B hedge fund after surviving a $4B drawdown.
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The Three-Layer Cake of Hedge Fund Due Diligence
On two recent podcasts, Dan Sundheim gave some high level scoping of the institutional due diligence process, saying to David Rubenstein "if it's a new company, it will probably take us 3-4 weeks" and on Cheeky Pint, "if you have a good idea, you could take a month and a half to write a memo".
To the casual observer, this seems like an insane amount of work (and certainly to an average retail investor who spends, on average, 6 minutes of due diligence on a name). Having been trained in the forge of a Tiger Cub where we had ~3 ideas per analyst in the portfolio, I could write a book on how to spend 150 hours on a name (and teaching this deep due diligence process is a core pillar of the Analyst Academy).
To me there are really three layers to the cake:
1) Desktop Research: anything I can do in front of a computer
2) Primary Research: Anything i can do on a phone call or off the desk
3) Insight Formation: This is the mental process that happens while conducting desktop and primary research. The output of the mosaic that I am feeding my brain. The "aha" moment when your pattern recognition sense kicks in while reading a paper transcript or 10-K with pen & highlighter in hand. There are some tangible parts of this layer, such as writing and compiling the thesis, but insight formation is just as likely (or more likely) to happen in the shower after 3 days of wrangling with desktop/primary research than it is to happen in front of a Bloomberg terminal. There is some ineffable magic that happens in feeding your brain with raw information, giving it the task of making sense of it all, sleeping on it, and seeing what comes out.
This is a directional recipe for the sort of idea diligence that high level institutional investors conduct.
And an important skeleton to consider when we consider wrapping our process in an AI exoskeleton. Despite what AI-maximalists may claim about "AI being able to do anything an analyst does", what you will observe here is that creating a differentiated investment thesis goes way beyond reading the 10-K and building the model. These are necessary but not sufficient parts of the workflow, but the real value-added parts of the investment process are the steps along that way that build the mosaic of differentiation that supports conviction in the idea (and only kicks off the real challenge of Bayesian updating of the thesis). A lot of this happens on the phones and off the desk.
And there is a very important and very meta question of if I speed run the desk-top research, do i short circuit the mosaic that is so critical in building that mental insight on a name? Sure, reading a 3-page summary of the K and transcript may save me 10 hours, but I do pay for that in weaker insight formation? And I've ruined the whole process. For this and many other reasons, AI adoption has been quite a bit slower among most institutional stock pickers than you might think.
Investing is an incredibly competitive game of poker, and my money will continue to be on the players who conduct rigorous, close to source investment diligence vs. those who speed-run the due diligence process & produce AI slop. AI is incredibly powerful, but should be used to *carefully* compress mechanics, deepen rigor, and add validation and emotional neutrality in the context of this ~3-4 week process, not compress it down to 3-4 hours.
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Long-Only Pony retweetledi
Do not plan anything in your life. When you do not plan anything, your life will go smoother. Sounds strange, but true. There is a power that knows the way. When you get your little ego out of the way, this great power will take over and lead you into itself.
Robert Adams
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It would be super helpful to know everyone's ages here upfront ... It might be because i'm a lil retarded / developmentally slow but a lot of shyt started clicking for me at 32+ ... mostly bad (but useful) shit i can't believe how naive i was at assuming most ppl aren't horrible
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@amitisinvesting 1) I don’t many monetization levers they can pull
2) how will they grow users
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Seeing a ton more chatter about $RDDT now…
I did a deep-dive on them 2 months ago and quite frankly, the only thing that held me back was valuation.
At $230, the risk-reward wasn’t there.
At $135…what are people thinking?
Trading at 11 p/s, 30x fwd P/E with 70% growth.
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16/ TL;DR
Rivian was overvalued b/c expectations were too high.
However, not every stock with a $147 Billion Market Cap is overvalued.
What matters is this 5 Minute Napkin Math that inverts the problem:
What business performance is required to 4x my money in 10 years?
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1/ In 2021, Rivian was valued at $147 Billion.
In 4 years, Sales exploded from $1mm -> $6bn
Yet, Rivian stock is down 89%
(Meanwhile, SP 500 is up 58%)
Here's the 5 Minute Napkin Valuation that would have saved these early investors:
THREAD
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@TheRealBirnbaum You’re right. You’ve showed me the data. May Mr market reward you.
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@whatsdasource Where’s the data? The “dreadful” sale of Blue Owl’s last batch sold at 99.7% of stated value.
You’re regurgitating headlines. This is why people panic sell.
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Private equity and credit are being completely demolished on literally no news except an $OWL gating and software.
Unbelievably buying opportunity.
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Seem like finally some decent buying opportunities today and yesterday in high growth names.
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remember that the tape shapes the news and not vice versa
few thoughts:
1/5
past few months reminded me of this tweet below + the tape at that time (3/31/2025)
before "liberation day" the nasdaq traded like a bag of ass every single day for ~2 months...bleeding lower.
hence why ppl who have been trading mkts for a long time got that eerie feeling - "we could crash."
that's captured in the tweet below, the notion of, it's not about the catalyst. the catalyst could be anything.
2/5
markets don't crash from all-time highs. its when you have a "sick" tape with weak leadership, just sort of floundering -- like we've had recently -- where the mkt is vulnerable.
dont look for news to backfit px action - just respect px action. ppl don't do this -- hence "omg a 2028 substack bear case crashed the market"...my man, it definitely did not lol...do not insult the market's intelligence like that.
but that gets us where we are now...the headline "war in iran," 3-6 months ago, a strong tape shrugs that off + rotates $ into unaffected sectors.
the impact of "liberation day" type events, is not discrete - it's shaped by the underlying health of the tape.
3-6 months ago was a rotation tape. now... based strictly on px action, when you see things like "the nikkei just sold off 7% in a straight line," you may be in a correction tape.
3/5
no need to try and shoehorn news around it. the mkt tends to sniff out peaks in EPS growth, it tops out and turns lower.
doesn't mean the cycle ends - could sell off, base for 6 months, and let stocks get cheaper while waiting for new leadership to emerge + liquidity/stimulus from all angles + handoff from secular to cyclical growth.
but don't sit here expecting that we're down on a headline and will go up on the next headline. read the tape...its unhealthy, don't ask why, don't search for reasons why, just respect it.
4/5
"stop doing what isn't working."
watch the 52w highs list - 203 names with $2B+ in mkt cap printed yday...it's just not the 203 that everyone owns.
you can buy software -50% ytd or buy petrobras +50% ytd. what twtr is doing isn't important - look at the tape and you'll see what "they" are doing. basic mats/energy/industrials are roaring.
the indices could get bashed around a bit, but real downturns never happen with cyclical growth is going apeshit to the upside.
5/5
so -- "DON'T READ NEWS, READ TAPE."
there is no news, there never is, news will just put you on the wrong side of the trade.
internals + movement under the hood, are your best guide as to what happens next...
mind ur risk + good luck trading.
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@taobanker I’ve taken too much pain. I’m gonna hold at 198 PA
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$RDDT is compelling.
Sam Altman owns 9%, they have licensing deals with Google + OpenAI, and they’re the 6th most visited website in the world.
FY25 earnings:
Revenue: $2.2B, +69% YoY
Gross margin: 91.2%, +70 bps YoY
Net income: $530M, 24% net margin, +$1.014B YoY
Adjusted EBITDA: $845M, 38% margin, +$547M YoY
Operating cash flow: $691M, +$469M YoY
Free cash flow: $684M, +$468M YoY
Capex: $6.7M, 0.3% of revenue
$1B share repurchase program
$2.5B cash, 0 debt
In my view, Reddit is an AI winner vs. perceived loser.
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