Why Stock Valuation Multiples Matter More Than GrowthThose who have been reading my blog over the past ~15 years will have heard me say “buying the best company in the world can still be a terrible investment”. This is one of the most uncomfortable truths in investing and…
Why Capital is Finding its Way Back to StaplesThe investment landscape has spent the better part of the last two years intoxicated by the potential returns of hyper-scalers, software, artificial intelligence, and similar assets. And you can understand why… These asset-light businesses offered massive free cash flows, unmatched…
NVDA Valuation Analysis: AI Capex, Free Cash Flow, and Market RealityMarkets are shifting from AI euphoria to demanding real cash flow. Private credit cracks, circular AI financing, and stretched valuations are raising hard questions about sustainability. As growth slows and multiples compress, 2026 is shaping up to be a true “show me the money” year for investors.
Agentic AI and the Future of SaaS: Disruption vs. Structural DestructionMarkets weigh Agentic AI”s threat to traditional application layers. Will AI enhance existing workflows or structurally impair legacy SaaS business models? From blanket euphoria to strategic redistribution On the surface, you could be forgiven for thinking the S&P 500 looks…
The AI Adoption Gap: Applying the Toothbrush Test to Generative AI ValuationsWhile AI remains undeniably impressive, its transition from a helpful assistant to a mission-critical necessity is facing a significant adoption gap. With daily active use remains thin, investors are beginning to question the durability of "asset-light" returns as capital expenditure soars into the hundreds of billions. This shift from software-driven scalability to hardware-heavy reinvestment suggests a major reassessment of valuations is underway, as markets weigh the probability of long-term value capture against extreme multiples.
Valuing Apple’s Moat: Why Even the World’s Best Business Fails the 20x EV/EBIT TestIn the last three months of 2025, the tech sector experienced what some called a “correction”. But what is a true correction? Technicians will be quick to say a drop of 10%. But for me that doesn”t work… I would…
The 2026 “Known Unknowns”: Why Demographic Shifts Signal a Growth ProblemAfter three years of spectacular gains, 2026 demands a strategic pivot. I outline five critical themes determining market direction: rising unemployment risks, sticky inflation, a hawkish Fed, AI capex scrutiny, and a steepening yield curve. With valuations stretched, the easy money is gone. Investors should prioritize high-quality assets and cash optionality, preparing for a potential 15–20% correction. The focus now shifts from chasing momentum to preserving capital and awaiting reasonable valuations.
Baby QE & Fed Group Think: Why 23x Forward Earnings Signal a Decade of Zero ReturnsThe Fed just delivered a "Christmas gift" with a 25bps cut to 3.75% and a surprise $40B monthly balance sheet expansion—essentially "Baby QE." While markets hit record highs, FOMC "group think" may be masking a deteriorating labor market and looming 2026 tariff inflation. With fwd PEs at ~23x, history warns that subsequent 10-yr returns are often near zero.
The Asset-Heavy Trap: Why Nvidia’s 65% Growth Can’t Outrun a 48x EV/EBIT MultipleNvidia's earnings beat—reporting 62% YoY revenue growth and projecting $65B in Q4—solidified its position as the AI chip leader. Yet, the question for investors is not if the AI boom is real, it's how much you pay? The massive AI capital expenditure by giants like Google and Meta is transforming them from "asset light" platforms to "asset heavy" infrastructure owners. This shift, coupled with the unanswered question of whether the returns on this spending will justify the massive increase in assets, is fueling investor unease and market momentum loss
The AI Earnings Mirage: Why 6-Year Depreciation Cycles Are Inflating Big Tech ProfitsMost of the Mag 7 tech giants are using an extended 5-to-6-year depreciation schedule for their massive GPU investments. Since GPUs typically have a 3-year useful life, this practice artificially inflates current earnings by reducing the reported expense. If these chips rapidly become obsolete, investors paying high multiples must question the impact on future Free Cash Flow and margins when the true depreciation expense inevitably hits. Investors are optimistic that will show very strong returns (and soon) on their half-trillion-dollar bet.
