The Overview Of The Week is back!

While I announced that there would be no Overview Of The Week for two weeks. Many Multis missed their weekly write-up and I got dozens of messages about why there was no OOTW (or other articles). I see that as a great compliment. When they heard I was on vacation in Sardinia for two weeks, for the first time that long in over a decade, I got many friendly messages from people wishing me a fantastic vacation.

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And it was great. I’m essentially always ‘on’ and I ‘work’ 7 out of 7. I put ‘work’ between hyphens because it doesn’t feel like work. This is what I love doing. But switching off completely for two weeks was really refreshing! I feel like my energy reserves are back to where they should be. I prioritized sleep (of which I often don’t get enough), reading, playing chess, swimming and enjoying the beautiful island and coast of Sardinia. For once, no earnings, no stress, and no pressure to publish. I think you can already see this week that it’s paying off for you as well, as this is already the fifth article this week. Let’s look back at the four previous ones.

Articles In The Past Week

The absolute priority I had set for myself was the earnings analysis of The Trade Desk earnings. I took my time to dig deep and you can find the result here.

The second article was about another company that didn’t have great earnings, Celsius. You can read that analysis here.

Even during my vacation in Sardinia, I kept up my Duolingo streak. I mostly do chess now, but also sometimes Italian. I analyzed the most recent earnings in this article.

Yesterday was the 15th of the month and traditionally, that’s time for the Best Buys Now. They are doing great so far this year, beating both the S&P 500 and the Nasdaq convincingly, by 13% and 12.5% on average.

With the new Best Buys Now, I feel confident I can keep up the winning streak. You can find the selection here.

Memes Of The Week

No memes this week.

Interesting Podcasts Or Books

I didn’t read anything that had to do with the stock market during my vacation, and as for podcasts, I listened to a few, but in Dutch. For those who can listen in Dutch: De Beursvoyeurs Zomer, with my friends Jurgen Vluijmans (about Bill Ackman) and Pieter Slegers (about Warren Buffett).

I also listened to Philippe Gijsels talk about William O’Neil, which made me decide to read O’Neil’s book. I’ve had it for years but never started it. I still have to finish another one (a manuscript of a friend I’m proofreading) and then I will learn more about O’Neil’s CAN SLIM method.

The markets in the past weeks

Let’s check.

It was a great three weeks, as you can see. The Nasdaq won 7.02%, the S&P 500 5.04% and the Russell 2000 4.72%.

The Greed & Fear Index jumped from FEAR territory before I left to GREED.

Below: the lawsuit one of my picks is facing (and why I don't see it as a thesis breaker), the two picks that jumped 36% in three weeks, the 12 other picks that were up more than 5%, the big SMB opportunity one of my picks just started to deploy, and much more. The Best Buys Now beat the indexes by 13% on average this year. Don't want to miss the next ones?

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Aaaah, it’s Sunday again. Every week you get the Overview Of The Week and every week, I hope you enjoy reading it as much as I do writing it.

Before we dive in, I’m leaving on holiday starting Wednesday. Sardinia is a great place to blow the dust off my Italian. I studied the language 30 years ago, but the last time I spoke it was 12 years ago.

It’s the very first time since I launched Potential Multibaggers as a paid service 6 years ago that I’m taking almost 2 weeks off.

That means there will probably be no Overview Of The Week next week and the week after that. But there might be an odd article. Writing is one of my favorite activities next to reading, so maybe I can’t resist the temptation. But in the first place, I want to be present with my family and the friends who join us. So, it is possible that you don’t get any articles in the next two weeks. Next to my Italian, my chess game should improve in those two weeks as well.

I’ll be on our internal discussion platform for paid Multis but probably not as much as usual. And I might post some vacation posts in our Casual Corner channel, the only channel that’s not about investing.

Multi Flo (and countless other Multis) have noticed that when I’m not at home, the markets tend to react very negatively to that, so brace yourself for the next few weeks. You could find some buying opportunities.

Articles In The Past Week

This is only the second article this week. One of the main causes was the abundance of material Axon has put out since the earnings. But it was a great investment of my time. I had already done a deep dive when I picked Axon, of course, but this taught me a lot more about the future of the company. And it left me even more optimistic about the company.

You can read the article about Axon here.

Next to that, I also continued my deep dives in some companies that are on the watchlist and could become a new pick. Don’t expect it any time soon.

Memes Of The Week

Just one meme this week. Not as much an investing meme, but still funny. Thanks for sharing, Multi bep.

Interesting Podcasts Or Books

This week, I did some catching up with one of my favorite podcasts, Invest Like the Best with Patrick O’Shaughnessy.

Very often, I don’t know the guests, but they always are very interesting. The first episode I listened to was with John Kim, on money raising. It was great to hear the other side of investing, which is not often talked about and how it is a game of trust. You can listen to it here.

The second episode illustrated what I like about this podcast. It was totally different and went in all directions but all interesting. Jeremy Giffon argued that internet fame, and especially that on X, where you have to have an opinion, is now worth more than money. But that was just one thought. You can listen to the full episode here.

The markets in the past week

Let’s check.

The Nasdaq continues to be the biggest loser, down 2.13%. The Russell 2000 lost 1.09% and the S&P 500 0.61%.

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The Greed & Fear Index stayed in FEAR territory.

Quick Facts

1. Optimism and Creative Destruction

This is not really a quick fact, but a quick thought.

One of the things I repeat over and over again is that optimism wins. That’s not naive but reality. If you look at history. Things just get better over time, with shorter periods of setbacks. Very much like the stock market, in other words.

But it’s also a warning signal for investors. Very often, the companies that play on defense lose. The new and better paradigm will almost certainly win and if you don’t adapt, you’ll be disrupted and perish. Joseph Schumpeter called this creative destruction, the idea that the economy can only stay vital when the new destroys the old.

That’s also how you have to look at the Mag7 capex boom. The risk of NOT investing so much is much higher than that of investing too much. Multiple Mag7 executives have already said this aloud, but many investors don’t seem to realize that it’s either going all-in or be disrupted. That’s why Alphabet announced more investments and that’s why others will invest more as well. They know that their very existence is at stake.

Morgan Stanley still expects a big jump in capex in 2027, but only a small one in 2028.

Source

2. The Worst July In 22 Years?

This week, I saw this table.

Source

This is about the Nasdaq. As you can see at the top, the average gains for July are 3.45% but right now, it’s down 7.08%. If this holds, it would mean the worst July month since 2004.

But you should also see this in the context of April and May, which were exceptional. You can’t have higher upside with deeper downside. The Nasdaq has been much more volatile than the S&P 500, but which would you prefer to have held in the last 20 years?

This is something many investors still don’t appreciate enough. The short-term volatility is the entrance price you pay for higher long-term returns. So, the choice is yours. What will you focus on? The short-term drops or the long-term climbs?

I see that most choose the short term. 99% of the news about investing, be it on mainstream media or social media, is about the short term. That leaves an edge for investors who look at the long term. It sounds easy, but it’s not. You have to have the stomach for it.

By the way, this image also fits into this picture. You have to know that the S&P 500 is up 8.5% and the Nasdaq 7.5%.

Source

In other words, up to now, the average individual investor is underperforming the indexes by about 20%.

Just to be sure, this is not looking down on the individual investor, as I am one myself. Every single investment strategy will underperform the indexes at certain moments and sometimes for a few years in a row. Look at the year before the dotcom bubble popped and how Warren Buffett did compared to the Nasdaq 100.

That’s an underperformance of 122%. But look at the next three years.

It’s important that you know what game you play and that you accept the ups and downs that come with every approach. The current winners are tomorrow’s losers and vice versa. That’s why yearly returns don’t mean anything.

Below: this week's news on the picks and much more. The perfect moment to join the Multis.

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It’s Sunday again and it’s summer. I hope you enjoy both and that this Overview Of The Week even enhances that enjoyment.

Before we go into the rest of the content, two things.

First, you will notice that this Overview Of The Week is early this week. That’s because tonight (here) I want to watch the World Cup final.

Secondly, normally, I would have been at Chapters this week, but the evening before I was traveling to Hamburg, I decided not to go. The reason was, in the first place, my health. I had felt very tired after returning from Vail a few weeks ago and I decided to listen to my body. Secondly, I found out that there was a live stream of the Capital Market Day this year. Of course, I missed the direct contact and conversations with management, but as I had that last year, I thought I could skip a year. I’m feeling less tired now and that is more important. And you can still expect my article on my insights from the Capital Markets Day of Chapters in the upcoming week.

Articles In The Past Week

This is the third article this week.

The first article was the Best Buys Now article.

In the second article, we analyzed the Rubrik earnings.

Memes Of The Week

Maybe you have seen this picture of a 19-year-old Lionel Messi giving a bath to a baby Lamine Yamal. The two protagonists of the World Cup final did a Unicef campaign.

I saw a great parody of this picture.

Interesting Podcasts Or Books

This week, I started a new book called Endure.

The book explores the limits of human performance. It basically challenges that physical barriers are fixed. Think of pain, fatigue, heat and other limiting factors. It says that the brain is much more important than the physical limits and we can endure more than we think. I only started it and I’m very curious to read more.

The markets in the past week

I saw many X accounts blowing up a lot this week. Here are a few.

This again shows how dangerous a non-diversified, leveraged portfolio is.

But the markets didn’t do that badly, of course.

Still, the Russell 2000 dropped 0.52%, the S&P 500 1.55% and the Nasdaq 2.9%, which is quite a bit for an index drop in one week.

The Greed & Fear Index dropped further into FEAR territory.

Quick Facts

1. Kimi K3: DeepSeek 2.0

As a Belgian, the first association I have with the name K3 is this hugely popular children’s music group called, you guessed it, K3 (named after the three original members, whose names all started with a K: Karen, Kristel and Kathleen.

But this week, a different K3 got on the stage, not just in Belgium and the Netherlands, but worldwide. Kimi K3 is a big new AI model from the Chinese company Moonshot AI. It was launched on July 16, 2026. It’s intended to be fully open-source, with weights promised for July 27.

But the main shock came from the fact K3 outperformed American in some tests. Especially the Frontend Code Arena test was a shock to many.

Kimi K3 also came close to Anthropic’s Fable and OpenAI’s Sol overall.

Source

There are several concerns about the frontier models from OpenAI and Anthropic, but it ultimately comes down to lower costs and open-source.

Here you can see that costs are much lower.

In times when AI budgets skyrocket, this may be an important factor for many companies with heavy coding work or running agents.

The open-source part means that everyone with GPUs can adapt it and run it privately, remove usage limits, and build on top of it.

Kimi K3 beats the other models on frontend coding, long coding sessions, at a thrid of the price and soon without limits (because of the open-source part). That means OpenAI and Anthropic will either have to keep dropping their prices, which will hurt them as they already lose money, or make much better models, which is also expensive.

Of course, this shocked the US tech scene, just like DeepSeek did. But it’s probably also very similar to DeepSeek that it is really good for AI. In January 2025, I wrote a full article about DeepSeek.

This is a sentence I wrote in that article: “It’s also clear that DeepSeek did something Chinese companies are good at: copying.” Read that sentence again, but replace DeepSeek with Kimi.

I have not checked it myself this time because it’s probably already fixed anyway, but you could see this everywhere on the net.

This works through distillation. Distillation starts with insights from another model by sending inputs to the teacher model and recording the outputs. Those outputs are then used to train the student model, in this case, Kimi K3.

Probably, Moonshot AI has done this through Anthropic’s API. This clearly violates the terms of service of the models, but you can’t block it.

This is clearly negative for Anthropic and OpenAI. They make a lot of money on their top models, and companies may choose to host their own models based on Kimi. But this is not so bad.

As Gavin Baker reasons, if only OpenAI and Anthropic controlled the whole AI market, they might end up buying too much of the supply. Think of areas where there is more demand than supply: chips, power, data center capacity etc. If there are more players, there’s a bigger market. That’s why Nvidia’s Jensen Huang supports open-source models. They need the same hardware, and more competition means less pricing power from customers.

On top of that, Kimi K3 is not very efficient with tokens. In other words, it uses more words/thinking than some rivals. The real cost per finished task is higher than it looks.

Don’t forget that LLMs (ChatGPT, Claude, Grok, Llama, etc.) have never been seen as the end goal but as an intermediary step on the way to AGI (Artificial General Intelligence).

American companies will now adopt to this new reality as well and get a kick in the behind to keep innovating as efficiently as possible, just like with DeepSeek.

But this kind of X post is very, very misleading.

First, you only see the spending of a few companies. Secondly, this is also about inference, the application of the AI. If you have the top model, but there’s not enough capacity to run it, your lead is completely worthless. The US companies show they lead to China, not that they are less efficient.

What does this mean for chips, memory, and power? That there will only be needed more of it. BlackRock CEO Larry Fink even thinks that there will be futures for those three classes soon. That means they are seen as a new asset class. He thinks it’s important enough to treat it as a scarce commodity essential to the world economy, like oil, and therefore it should be able to be traded and hedged. Weird times.

I also think that there are some deals to be done with the fallen angels in the last weeks. Think of Micron, for example. The stock is off 30% from its highs, but Morgan Stanley thinks the company’s gross margins will jump from a whopping 85% already to 89.5%.

Source

It’s healthy that there is a pullback, but I think that will be it, a pullback, not the start of the ‘popping of the AI bubble’ as many claim. Of course, there’s never certainty in markets, but from following it this closely, I don’t see the signs in reality that many claim the stock prices give.

On an aside, it was also announced that Moonshot AI, the company behind Kimi, wants to list on the Hong Kong Stock Exchange soon, using the momentum of the K3 release. At the same time, it’s collecting money from the private market, by finalizing a round that values it at $30 billion. Its competitor, DeepSeek, is also rumored to be planning an IPO soon.

2. Volatility And What It Might Mean

Below:

Why momentum stocks just had their biggest monthly drop since 2008 (and what it means for the market)

Why I think the “overvalued market” talk is itself overvalued

And much, much more!

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The US and Belgium are out of the World Cup. The Iran war is back (again), oil is expected to spike again and Senator Lindsey Graham suddenly passed away at the age of 71. People got killed by fires in Spain and the situation in Ukraine is still awful. And there was much more to be sad about this week.

But if you look at the history of our species, things have only improved. The short term often looks dire, but over the long term, it’s simple: Optimism wins. There are horrible episodes in our history (think of the wars, famine, diseases and so much more), but over the long term, life gets better. If you have not read the book Factfulness by Hans Rosling, I can only recommend it wholeheartedly.

Many things went really well this week. People got married, got children, got a new job, or heard they were cured. But there’s a huge filter that eliminates all those things. It’s called the dramatic attention filter. If it’s not dramatic, it just doesn’t reach you.

Source

That’s also how the stock market is. You often hear about the bad things, or the things that have the potential to be bad. But you don’t hear how so many thousands of companies do outstanding things to serve their customers, to improve their products, yes, even to make this world a better place. As investors, that’s what we bank on, and it’s this that sets us apart from traders. Traders need the drama to profit. We want the quiet performance over the long term.

Articles In The Past Week

This is the third article this week.

In the first one, I analyzed Chapters Group’s results in more detail.

The second one was not really an article but a webinar of 35 minutes in which I talked about Mercado Libre, my biggest position. You can find it here.

Memes Of The Week

This is the first meme this week.

No comment, haha.

Our Multi Meme King Flo posted this one.

When cab drivers play with leveraged positions, we are usually much closer to the top than to the bottom.

Then there was the Terry Smith situation. He has a big fund, Fundsmith, and he changed his approach dramatically. More about it later in this OOTW. First, the memes.

I made this meme myself.

Interesting Podcasts Or Books

Every now and then, I feel a bit tired or drained, and when I want to listen to a podcast at such a moment, or I do it when I have to pay too much attention to what I’m actually doing (like cooking something I haven’t cooked before), I listen to a light podcast episode.

For me, the Market Cap Game Show, a quarterly returning game show on David Gardner’s Rule Breaker Investing podcast, is the ideal combination of light entertainment and still learning something.

The concept is simple: two contestants guess the market cap of a company. You can listen to the most recent Market Cap Game Show here:

The markets in the past week

During the summer, I always check my portfolio less frequently, which I actually think is a good thing. So, what have the indexes done this week?

As you can see, the pattern we have already observed a few times in the last few weeks was back: the big difference between the Nasdaq and the S&P on the one side and the Russell 2000 on the other side.

The Russell 2000 dropped 0.61%, while the S&P 500 was up 1.23% and the Nasdaq 1.74%.

The Greed & Fear Index is based on the S&P 500. Therefore, it was not unexpected to see it climb to NEUTRAL from FEAR.

Quick Facts

This week, there was a lot to do about Terry Smith’s letter to shareholders, in which he changed his approach. Multi Gorki summarized it very well on our platform for paying Multis:

The reason is simple: Terry Smith lost a lot of his AUM (assets under management). AUM is now £12.3B, down from £29B in 2021. That’s down 58%. Ouch. But the fund has underperformed the index in the last 5 years, so that’s not really surprising.

This is also the reason why funds often underperform the index. At the moment they want to buy more, when their stocks are undervalued, they have to sell because people are asking for their money back. And reverse as well: when there’s a ton of money available to invest (like in 2021), a big majority of stocks are overvalued.

This is what Smith changed. From ‘do nothing’ to a turnover of 52% in a single quarter, that’s wild.

Now, don’t get me wrong. I think it was time Smith did something. More, even, he should have done something earlier already. I think he forgot a bit that the market prices stocks for growth and forward potential.

Take Zoetis, for example. In the last 5 years, it grew its revenue by 3% per year on average. That’s just not a company that will outperform.

With some price hikes, EPS growth averaged 6% per year over the last 5 years, which is still below the S&P 500 average (8.3%).

If you want a Fiscal subscription to get these insights as well, you get a 15% discount through this link.

Below: the Cloudflare deal with OpenAI that just changed the AI search game.

One Potential Multibagger up 34% in the last month and one up 56% in the last two weeks before this one.

Why Nubank's just-announced Mexican banking license is important.

The two stocks in the PM Forever Portfolio that report in the upcoming week.

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Congratulations to the USA for its 250th birthday. It’s incredible what happened in those 250 years and how the country became the leader of the free world.

This is just the first article this week. There are multiple reasons for that.

The first is my jet lag after my week in Vail. On Monday and Tuesday especially, I really felt it, but even now, my biological clock is not reset yet.

Usually, it takes me just two days to recover, but the altitude in Vail probably plays a role. The village lies at more than 2,500 m (more than 8,200 ft) and the mountain even more than 3,500m (11,500 ft) and you definitely feel that. My Garmin watch warned me that during my first night, my oxygen level was just 85% and that I was either sick or at high altitude.

The second reason is that we had a belated birthday celebration for our daughter. Her birthday was three weeks ago, the day before the exams started, so we only had a small family celebration then (I wrote about that in the OOTW as well). Now, she had time to celebrate with her friends. We went to a trampoline park (the girls called it a “trampo park”) and they went swimming in a subtropical swimming pool with multiple glides and a wild river ride. There was a sleepover as well.

The first two reasons why this is the first article this week are personal, in other words, but the third is not. I went into research mode this week, and maybe (!) there’s a new pick crystallizing. It’s not sure yet, and if I decide to release a new pick, it may not be in the upcoming week. We’ll see. But I learned a lot this week and I enjoyed it.

I’ve also been working on an earnings review, but it’s not fully finished yet. I might have pushed it out yesterday if I really wanted it, but it didn’t feel finished enough yet. It needs some sanding, so to speak. So, probably, that’s an article I will publish tomorrow. At the same time, the Muse doesn’t come on command, so maybe it could be later this week.

It’s something I don’t often talk about, but I really try to make my articles as good as possible. I used to play guitar and sing and I composed my own songs. Some came in 15 minutes, some took months before they were finished. With articles, it’s less extreme (I have never written an article in 15 minutes and never worked on one for months in a row) but it’s a bit the same process. It’s only finished when it feels finished, not before.

Sometimes, I almost don’t change anything from the first draft, sometimes the rewriting takes more time than the writing. The Chapters Group is in the second category. The reason I don’t often talk about this is because it doesn’t matter for you. The article should always be good, full stop, whether I struggled with it or not.

That’s also why I still write the old-fashioned way. AI can’t make articles that are anywhere near satisfactory for me. It’s way too middle-of-the-road, faceless, without character. I also see it immediately in other people’s articles or X posts.

Let’s dive into this handwritten Overview Of The Week!

Memes Of The Week

Just one meme this week, shared by our Meme King, Flo.

Interesting Podcasts Or Books

This week, I listened to Chris Mayer, the author of the great book 100 Baggers talk about his new book The Investor’s Odyssey in Investing By The Books. You can find the episode here.

Because of this, I saw that the previous episode of Investing By The Books had Tom Russo on Common Stocks and Uncommon Profits, a fantastic investing book by Phil Fisher and one of the books that inspired me the most for Potential Multibaggers. I have not listened to that one yet, but it’s on my list for the upcoming week. You can find it here.

The markets in the past week

So, what did the indexes do this week? Let’s check.

As you can see, the Russell 2000 was down 0.46%, but the S&P 500 was up 1.76% and the Nasdaq 2.12%.

The Greed & Fear Index is still in FEAR but it’s up from EXTREME FEAR last week.

Quick Facts

1. SK Hynix On The Nasdaq

On Friday, SK Hynix will start trading on the Nasdaq under the ticker SKHY.

There’s a huge memory boom going on, as many of you will know and that is visible in the numbers. Bernstein estimates that SK Hynix could post a 90.9% gross margin in its DRAM business for Q2. Others see around 80%, so this is a surprising call. In Q1, this was already at a record 72%.

HBM remains the main thing, but conventional DRAM and NAND prices are also shooting up. And SK Hynix is a great player. If it had been on the American markets years ago, I would have bought it. I didn’t want it when it traded on the Korean market because of the lack of top-notch info and the costs associated with buying there.

Now, we will get an easier way to buy the stock, as SK Hynix is scheduled to begin trading on Nasdaq this Friday, July 10.

The offering could raise as much as $29.4 billion. SK Hynix plans to invest in new fabs and manufacturing equipment to add capacity.

I don’t think I will buy shares soon, but I’m happy it comes to a big market. And if I buy, I will let you know, of course.

2. AI Capex Slowing? Nope

There have been some voices saying that the AI capex boom is slowing.

Last week, I shared this.

And the average token pricing is down as well, albeit moderately.

But using cheaper models and lower token pricing has not resulted in slowing the AI infrastructure spending. Usage is growing much faster than prices are declining, according to JP Morgan.

JPMorgan estimates that token usage on OpenRouter jumped a whopping 70% month over month (!) in June, up 20x from last year. The message is simple: cheaper AI makes users use it much more.

Chinese and other low-cost models are winning a larger share of token volume, as already mentioned last week. In particular, developers, startups and AI agents use them. U.S. models accounted for only 35% of usage in June, down from 56% in April.

But the money tells a different story. Models from OpenAI, Anthropic, Google and xAI still collected more than 85% of total spending. Customers appear willing to pay higher prices for the strongest models when performance matters.

The hardware market shows the same thing. Rental prices for Nvidia’s A100, H100 and B200 all increased in June. The A100 rose 6.3% from May, while the H100 posted its seventh consecutive monthly increase. Even older GPUs remain valuable as companies match each workload with the most economical chip. This is pretty crazy if you know that the A100 was launched in May 2020 and the H100 in March 2022. That also means that Michael Burry’s call that 5 years of depreciation time was egregious is simply ignorant.

Memory is even crazier. JPMorgan says the price for 16-gigabit DDR5 has shot up 740% over the past year. AI servers need more memory capacity and bandwidth, while HBM production consumes manufacturing resources that might otherwise serve conventional DRAM. That’s why there’s so much demand for Micron, SK Hynix and Samsung.

Storage suppliers like SanDisk, Western Digital and Seagate also benefit from prices far above last year’s levels, but NAND has started to soften a little bit.

So, up to now, the consistently higher infrastructure still demands bigger and bigger demand from customers.

Below:

• Why I think the Mag7 is set for a comeback nobody's pricing in

• The CCP AI propaganda that's fooling millions of people on X right now

• The study of 21,559 companies that proves AI won't kill jobs (and what it means for your career or company)

• The Multibagger pick President Trump just bought (and what happened right after),

• And of course much more.

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I’m starting to write this Overview of the Week in the back of an Uber, driving to Denver Airport.

I’m not constantly glued to my screen, as the scenery is simply too beautiful.

It’s Saturday afternoon here now, and I will arrive home around 4.30 pm on Sunday. I know I’ll need a few days of recovery from the jet lag. Those of you who have been flying east know that that’s always the worst, as you ‘lose’ time while flying.

I loved the conference a lot again. The best thing about it is not necessarily the ideas, but the conversations with some of the world’s smartest and most successful investors. They are great at poking holes in your thesis, asking the best questions and adding valuable context.

As I already shared last week, I presented about Mercado Libre.

If you want my full presentation, you can download it in the paid part of this article.

Articles In The Past Weeks

Because of my stay in Vail, this is just the second article this week. I know you are used to more, but most services don’t provide half as much content as I do for this price.

On Monday, I published the Topicus earnings analysis, updated the Quality Score and valued the stock. You can read that article here.

By the way, Constellation Software was widely discussed during the conference. ;-)

Memes Of The Week

Two memes this week. They may be outside some people’s comfort zone, so feel free to scroll past them. But I found them too funny not to share.

This is a parody of Benjamin Graham’s book The Intelligent Investor.

The second one is about SpaceX.

I don’t know much about technical analysis, but this one looks pretty correct, haha.

Interesting Podcasts Or Books

On the flight to Denver, I read about 70% of this book on Nubank. It’s self-published, and that means that there are a few things a good editor would have weeded out (like a paragraph that’s repeated), but it’s well-written and great to get extra insight on the company. I intend to read the rest on my flight home, although I might also try to sleep.

The markets in the past week

How did the markets do this week? As I was fully immersed in the conference, I actually have much less of an idea than I normally do. Let’s have a look.

That’s pretty crazy. The Nasdaq was down 4.6% this week, while the S&P 500 only lost 1.95% and the Russell 2000 was up 1.02%. I can’t remember such a big difference between the weekly returns of the indexes.

The Greed & Fear Index dropped to EXTREME FEAR.

Quick Facts

1. Apple Wants To Buy Banned Chips

Apple is lobbying the Trump administration for permission to buy memory chips from China’s CXMT (ChangXin Memory Technologies).

The Pentagon has classified CXMT as a Chinese military company. Apple reportedly contacted the Commerce Department more than a month ago and has also approached White House officials and political allies. Its goal is of course to lower the cost of memory. But I doubt that this will be successful. CXMT is blacklisted because of its ties with the Chinese military. I would be very surprised if the White House approves this. I mean, do you want almost every American to have a Chinese spy chip in his pocket? I don’t think so.

At the same time, Apple raised prices for iPads and MacBooks, saying it could no longer absorb the jump for the expensive memory chips.

Source

2. $100K Is More Than 10% of the Journey to $1 Million

Compounding growth is a hard concept to understand and I saw a great post this week that shows how many get it wrong.

Suppose you want to go to $1 million. On paper, $100,000 is only 10% of $1 million. But measured in time, it can represent more than 25% of the goal.

If you invest $10,000 a year and earn an average annual return of 7%, it would take 30.7 years to reach $1M. The first $100,000 would take 7.8 years. That means the first $100,000 consumes about 25.5% of the total timeline.

Then compounding starts doing more of the work and things speed up. Going from $900,000 to $1 million takes only about 1.35 years, almost six times faster than reaching the first $100,000.

At the start, things may feel slow, because most of the growth comes from your own contributions. Later, the compounding returns accelerate.

The first $100,000 is the hardest. Charlie Munger already said that.

Source

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I’m going to start this Overview Of The Week in the same manner as last week: happy Father’s Day! Last week, we celebrated it in Belgium but today, the US and many other countries celebrate fathers.

I hope you enjoy or enjoyed your day if you are a father and celebrating this day. With Juneteenth, it was a long weekend.

In the upcoming week, I’m going to Vail, Colorado, for the Intellectual Investor conference of my good friend Vitaliy Katsenelson. This is a picture from two years ago.

As you see, the group is not that big, and that’s on purpose. It’s on an invitation-only basis, and Vitaliy doesn’t accept more people. That’s why the presentations are a bit longer, and you get to know the people much better. The level is very high, and it’s a joy to be invited again.

I’m already looking forward to the presentations. Mine will be about my biggest holding. Seasoned Multis know that this is Mercado Libre. This is the title page of my presentation.

As I’m flying to Vail and back this week, I will have a bit less time to write, but it will be a very inspiring week. In such weeks, the soil gets fertilized, so to speak. I don’t often get direct investment ideas, but I can talk about certain topics, themes, and technologies with people with deep knowledge, and that sometimes triggers an idea.

Articles In The Past Weeks

This is the third article this week.

In the first article, I selected the Best Buys Now for this month. So far, the selection had a good start.

In the second article this week, Zack and I analyzed CrowdStrike.

Memes Of The Week

Just one meme this week, shared by the Potential Multibaggers Meme King, Flo.

Interesting Podcasts Or Books

This week, I listened to a very interesting podcast episode of Stock Club. Guests were Neeraj Khemlani and Matthew Ankrom, the people behind the book The Coffee Can Investor.

They talk about what it takes to find 100 baggers. You can listen to it here.

The markets in the past week

How did the markets do in this four-day week?

As you can see, it was another volatile week but the indexes ended in green. The S&P 500 was up 0.93%, the Russell 2000 gained 1.22% and the Nasdaq 2.43%.

Weirdly enough, the Greed & Fear Index remained firmly in FEAR territory.

Quick Facts

1. The SpaceX IPO (pt. whatever)

I get some questions, some pretty arrogant, on how wrong I was on the SpaceX IPO.

This is supposed to be the evidence on how wrong I am.

Well, you can guess I got the majority of the questions on Tuesday, June 16, when the stock was up 25% from where it opened, not on Thursday, June 18, when it was just up 13% from that open.

I don’t know how many times I have to repeat it, but I’m not a trader and I’m not interested in short-term returns. I’m an investor, not a trader. Investor comes from the Latin

I studied Latin for 6 years (and now on Duolingo again as a refresher), and that means I know the origin of the words speculator and investor. They are not the same.

The Latin word speculator means an observer, a spy or someone who examines something. But that’s inherently short-term. Later it was used for someone who anticipates future developments and takes a short-term position based on that judgment.

People who have listened to the fantastic David Gardner will know the origin of the word investor. It comes from the Latin word investire, which means: to clothe. If you invest in a company, you wear the clothes of that company, as it were, as if you become a part of the team. That’s totally different and inherently meant for the long term.

So, I don’t care a bit what the SpaceX IPO does over the short term. What I do know is that I could see myself become an investor if the stock drops a lot. And for those who think that’s not possible, don’t forget that in the next few months, the market will be flooded with shares. Right now, the float is just 4%-5%, but that is about to change pretty quickly. This is the vesting schedule.

Source

If the stock drops a lot in the next year, I might consider investing in SpaceX. Right now? No, thanks, not interested at all.

Below: the stat that proves why you should never try to time the market, the table that shows which AI infrastructure stocks are still cheap (and matches what I just put in the Best Buys Now), why one of my picks jumped 32% in four days, and of course, much more. Don't want to miss opportunities like this one again?

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Because of a technical flaw, this Overview Of The Week was not published yesterday. I’m very sorry, but here it is.

Happy Father’s Day to all Belgian fathers!

Yes, in Belgium, we celebrated this a week earlier. If you are Dutch, American or in many other countries, it’s next week. If you are in Switzerland or Lithuania, it was last week.

My wife and daughter spoiled me this morning with a delicious breakfast.

Articles In The Past Weeks

In the past weeks, you got four articles, but this week, the pace dropped a bit and this is ‘only’ the third article this week.

In the first article, I looked at Kinsale and its Q1 results.

Yesterday, you got an analysis of the outstanding Cloudflare results.

Memes Of The Week

This week, you couldn’t ignore the SpaceX IPO. And of course, this meme is as true as it is funny.

This is another one about the SpaceX IPO.

Because of the IPO, Elon Musk became the first trillionaire ever. The difference with the other billionaires is so big that we are all actually closer to Larry Page, Sergey Brin, and Jeff Bezos than they are to Musk. Pretty crazy. That gave rise to this meme, I guess.

This week, there was also the launch and suspension of Fable 5, the version of Anthropics Mythos for the general public. The American government thought it was too dangerous for foreign use, including Anthropic’s own overseas employees. Pretty wild. That’s when you get situations like this.

Interesting Podcasts Or Books

This week, I listened to The Compound and Friends. The theme was the state of the market and why the knockout punch everyone expects doesn’t come. Interesting stuff.

Oh, one tip, if you are only interested in the investing stuff, you can start at minute 10. Before that, they talk about basketball and other things. You can listen to the episode here.

The markets in the past week

Last week, the market indexes lost quite a bit, mostly because memory stocks dropped sharply. How about this week?

As you can see, it was a volatile week and the indexes only got in the green on Thursday and Friday. The S&P 500 was up 0.65% and the Nasdaq 0.70%. The Russell 2000 was up 3.90%, which is actually what you want to see, as it means the market strength is broadening. If you don’t know what I mean, I refer to the podcast episode above.

Weirdly enough, the Greed & Fear Index dropped further into Fear territory.

Quick Facts

1. The SpaceX IPO

Last week, I said not to buy the SpaceX IPO. This week, some said that I was apparently wrong. I think they read me wrong, haha. I’m not a trader. I’m an investor. There’s a fundamental difference between the two.

Now, some also thought I said I would never invest. I have not written that in any way or form.

I just never invest in IPOs.

This is what I wrote in 2020 already:

Why I never buy IPOs

I wait for at least 2 quarterly results, preferably even more, but normally at least 8 or 9 months after the IPO. There are several reasons for that.

1. FOMO or fear of missing out: a lot of investors don’t want to miss out on the next ‘hot’ stock but fear of missing out is not the best investing principle. You buy a stock not because the company executes so well or because you are impressed by the conference calls but simply because so many people tell you it’s so exciting.

There seems to be huge social proof and as human beings, we’re very susceptible to social proof. If so many pundits are upbeat about it, it must be a good investment, right? Well, maybe. But wait for it and you can have proof in the quarterly results. You can judge for yourself then instead of believing others.

2. The bank-fueled hype machine: banks buy the shares of companies that want to IPO and then sell them at the IPO. That means that if the bank buys for $31, like nCino and shares jump 150% that they pocket that difference. That’s why they will do everything in their power to push everyone in the industry to hype stocks before the IPO. And you know how it goes in a business where everybody knows everybody: most will simply do what they’re expected to do and will contribute to the hype. As an outsider, I am a bit more skeptical.

3. Execution. Very important: I want to see how a company executes under the eye of the world for at least a few quarters. Public scrutiny is something else than operating as a private company. The expectations come from outside analysts now and missing earnings in your first few quarters paints a whole different picture.

4. The lock-up period: After 6 months (mostly) the lock-up period expires so insiders can sell as many shares as they want. Management and early investors often seek to cash out at least a part of their holdings and that means that millions of shares flood the market.

5. Price drops: That selling often causes the price to drop, so plenty of time to buy then. I’ll give some examples of the best stocks, although I picked them randomly. I just had a look at them and they fitted into a pattern that I often see.

This is Shopify in its first 6 months of trading:

Then look what happens over the next three months, after the lock-up has expired:

In investing, patience is a virtue. Don’t be the ball but be the player that controls the ball. And think who can take advantage of hyping you up for an IPO.

I added more examples than just Shopify, but I didn’t want to make this too long.

That’s why this visual is so good.

Now, it’s very hard to pinpoint the exact buy point before it goes up. But I can wait out ‘dead money,’ unlike funds, which are judged on their quarterly performance.

So, if SpaceX’s stock drops enough, I might be interested. But don’t expect a second Tesla. Why not, you may ask? Well, because of this.

A whopping 25,420% gain? Up more than 250x? That would mean SpaceX would have to grow into a company with a market cap exceeding $500T. To give you some perspective: the total market of all American stocks is $79.5T, and the market cap of the whole world is $136T.

I’m happy to wait for the drop. And I’m pretty sure it will come. When? It could already start in three months, but more likely between 6 and 9 months.

Now, if you hold IPOs long enough, that can still work out. Look at this table. But also look at the difference in P/S between SpaceX and the rest of the IPOs.

But of course, there is Elon Musk. He knows how to pump the stock of his companies. I mean, if you can keep up this stock's momentum with those fundamentals, you can do it with another stock as well, right?

Now, I’m not dunking on Elon. That would be utter stupidity. Long-term Multis also know I owned Tesla in the past but took my gains. I admire Elon deeply and after reading Walter Isaacson’s great Elon biography, that admiration even grew.

But that doesn’t mean I can’t say Elon’s a stock pumper. Part of that is naive optimism, as he always thinks that things will be rolled out much faster than possible. Just like Steve Jobs, he has a reality distortion field. That’s a power, as he can bend reality into the shape he wants it to be over the long term, but over the short term, it makes them almost impossible to work with and irritating when it comes to setting expectations.

A new example of this came today when Elon replied to a post on X.

To be honest, I would be surprised if SpaceX’s revenue would be greater than $1T in 2031. I can’t say it won’t reach that in, let’s say 2038 or so, but even that is very uncertain.

Sometimes, people have trouble seeing the negative pendant of geniuses, but I don’t. It makes these incredible people, who change the world we live in, much more human to see them multi-faceted, just like we are all not one thing, but many things at the same time.

2. There’s TSMC And The Rest

This week, I saw this image.

This again shows how important TSMC (TSM) is for chips. All other foundries combined only have a quarter of the whole market.

Here’s where the free part ends. If you are a paid sub, keep reading, as there’s much more.

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Pfew... Yesterday was a deep red day. After such a day, I appreciate the weekend even more than in other weeks.

And of course, weekend also means a new Overview Of The Week.

Articles In The Past Weeks

We are keeping up the pace. This is again the fourth article this week. Let’s look back at the three previous articles.

In the first article this week, I presented you the second part of the deep dive on the newest Potential Multibaggers pick. It’s already up 30%, but if you want to hold for the long term, reading this can help you decide if you still want the stock.

In the second article of the week, we dissected Celsius Holding’s earnings.

Yesterday, I published the third article of the week, another earnings deep dive. This time, the outstanding Datadog earnings reflected the fundamental change the company has undergone over the last few quarters. We looked at what changed.

Memes Of The Week

It’s funny how people react to this section. Some people love it and others hate it. Now, if you hate it, you can scroll past this section, but if you love it, you would have to miss the memes otherwise, so I’ll keep them in.

This is not really a meme but from the Potential Multibaggers community. The Friday bloodbath left some traces, haha.

Bryan Johnson, the millionaire health freak who became even more famous because of the Netflix documentary Don’t Die: The Man Who Wants To Live Forever, also posted a stock market meme about Friday’s market action.

I also laughed hard with this one because it’s so true for so many investors.

This one went viral on X because of the funny cross-reference between the comics and movies and the chip company.

The high token costs also created a few memes, like this one.

Earlier this week, the market was much better than Friday and this inspired Multi bep for this funny thought.

Interesting Podcasts Or Books

This week, I listened to an episode of David Gardner’s podcast Rule Breaker Investing. David Gardner is one of the best investors of the last decades. He has picked multiple 100+ baggers like Amazon, Tesla, Nvidia, and several others. And yes, he kept them.

He recently turned 60, and in that context, he made an episode titled “60 Thoughts As I Turn 60.“ He puts them in three categories: investing, business and investing. Recommended!

The markets in the past week

The markets were down substantially, by 2.5% for the Russell 2000, 2.8% for the Nasdaq a whopping 5.1%.

Last week, I wrote:

In exactly two months (March 31 to now), the Nasdaq is up a whopping 29.71%. That’s crazy. And unsustainable.

I hate the word correction, because it implies that the market has done something wrong. But right now, I think a correction would be welcome.

Now, sometimes, you have to be careful what you wish for. But what feels bad for the short term can be very healthy for the long term.

The Greed & Fear Index dropped from Greed to Fear.

Quick Facts

1. Don’t Buy SpaceX’s IPO

What a coincidence (not). Just a week before SpaceX’s IPO (scheduled on Friday), the company announced that Google will rent computing power from SpaceX for $920 million per month for 32 months. That means an additional $ 29.44 B in revenue.

But mind the details. It’s $920 million per month. Not a $29.44B contract. The difference is in this sentence:

After December 31, 2026, the agreement may be terminated by either party upon 90 days’ notice.

Google owns 6% of SpaceX. At the expected IPO value of $1.75T (yes, a T), that means that it has an investment of $105B in SpaceX at that valuation. So, it’s not that it doesn’t want to help SpaceX.

It even inspired someone to make this GIF. It’s a bit cynical, but you can’t say it’s total nonsense.

Source

And some other suspicious things are going on. This for example.

If you still believe price targets, please let this convince you to stop attaching any credibility to them.

But back to SpaceX and why you shouldn’t buy the IPO. It’s quite simple. You are the exit liquidity. That’s a fancy name for being the sucker to pay insiders, VCs and early investors at peak hype valuations.

Before the Google deal, SpaceX traded at 94 times the 2025 revenue. That’s not a typo. 94x forward revenue, not profit. That’s bonkers.

Suppose that SpaceX grows its revenue by 50% without the Google deal. That’s very strong growth. That would mean $28B in revenue. Add one year of Google revenue and you have $39B. Very strong, but that still means SpaceX’s valuation is 45 times revenue.

If someone wants to buy Potential Multibaggers for 45 times the forward revenue, please contact me.

Still not convinced not to buy the SpaceX IPO? Look at this.

Ok, if you want to buy, I know what you are going to say: SpaceX is an exceptional company. Well, here are some other exceptional companies like Cloudflare, CrowdStrike, Facebook, Shopify, Palantir, and multiple others.

Source

Focus on the last column. The stocks of these outstanding companies that went public that year dropped by 55% on average within a year.

I may buy SpaceX at some point, but not at the IPO.

2. Bullish For Nvidia

I don’t know if people think about what happened in the context of Nvidia. This is pretty important.

SpaceX doubles the price of operation to rent out its GPUs to Google. This means two things:

1. There are still not enough GPUs to quench the chip thirst. Nvidia ramps up its production continuously, but it can’t follow the demand. Google decided, therefore, to rent the GPUs from SpaceX.

2. This also shows that Nvidia’s GPUs are probably better to run Gemini on than Google’s own TPUs. Why would Google pay double the market price for GPUs if its own TPUs are cheaper than that market price to start from. It would simply make no sense.

Jensen Huang has said on several occasions that Nvidia’s Blackwell costs twice as much as an ASIC chip, of which Google’s TPU and Amazon’s Trainium are examples. So that means Google pays four times as much for GPUs as it would if it simply deployed its own TPUs.

There is something interesting that Jensen Huang adds to the price. He says that even if Blackwell is twice as expensive, the compute power, efficiency, energy efficiency, etc., means that Nvidia’s GPUs are twice to eight times as effective. Google seems to admit that with this rent.

3. An Earnings Bubble?

This week, I read this interesting post.

The argument is simple and correct. While many compare this to the dotcom bubble, probably because AI a revolutionary tech innovation, this looks more like the build-up for the Great Financial Crisis.

These charts are shared to convince people that this is different than the dotcom bubble.

Source

Do you know why that’s convincing? Because it is different than the dotcom bubble.

In the buildup to the Great Financial Crisis, banks and home builders also posted big earnings gains. But they poked them up with very risky behavior.

Now, don’t get me wrong. What happened then was much riskier than what happens now. Now, the financial system will probably not in danger.

What I mostly mean is that people want to predict the next bubble by making it fit into the mold of a previous one.

Right now, I have the same opinion as the takeaway of what I showed you earlier. Yes, this is a bubble. Yes, it will pop. But probably not now yet.

4. When Good News Is Bad News

Over the short term, the market doesn’t trade on the economy but on interest rates.

We saw a big drop in the indexes this week. Most of that was from Friday. The Nasdas lost dropped 4.18% in a single day. The reason? The job report came in, and it blew all expectations out of the water. The US economy added 172,000 jobs in May, double the expected figure.

The market had been counting on rate cuts, but with higher interest rates and this strong jobs report, the odds of a rate hike are higher than of a cut.

But there’s a caveat. The job report looks like a blow-out economy, but if you look closer, there’s something else going on.

Just to be clear, the trend is cooling. Higher-wage cyclical jobs are still shrinking, and those are usually a better indicator of the trend, not people temporarily hired for the World Cup.

The takeaway for Multis? Nothing about the fundamentals changed this week. The price is a fickle market trying to price a company’s next decade and more. That’s an impossible exercise and that’s why emotion over the short term matters a lot. In the long term, a company’s return is determined by fundamentals, though.

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I hope you had a great week. To round it off, or to start it, here’s a new Overview Of The Week. We’ve got quite a bit to cover, so let’s start right away.

Articles In The Past Weeks

This is the fourth article this week. Let’s look back at the three previous articles.

In the first article this week, we saw that the numbers Hims & Hers posted were actually much better than they appear at first glance. It shows why deep research matters.

In the second article of the week, I showed which position I trimmed and the ten stocks I bought.

Yesterday, I published the third article of the week. This time, we looked at a stock that I rate a strong buy.

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Memes Of The Week

Here’s the fresh harvest of the best stock market memes.

Here is the first one already.

And this one went viral as well.

Multi Bep made this great one specifically for Potential Multibaggers. At the same time, I think it’s very generally applicable.

Multi Rule No.2 posted this one, a variation on a classic.

The last one was posted by Multi Julien. It’s not an actual meme, but sometimes, reality feels like a meme.

Interesting Podcasts Or Books

This week, I listened to an episode of David Senra. He interviewed Rick Rubin. I love music and Rubin has produced some of the best work of the best artists.

He worked with the Beastie Boys, Slayer, Metallica, Public Enemy, Run DMC, LL Cool J, Red Hot Chili Peppers, Johnny Cash (the legendary American Recordings series), Nine Inch Nails, Tom Petty, System Of A Down, Sheryl Crow, Rage Against The Machine, Macy Gray, Jay Z, Slipknot, Neil Diamond, Justin Timberlake, Linkin Park, Weezer, Lana Del Rey, Lady Gaga, Eminem, Kayne West, Neil Young and many, many more.

But he is not just a producer. Sometimes, he resembles a zen master. His life takes are fantastic. You can listen to the episode here.

The markets in the past week

So, what did the markets do in the past week?

Once more, the indexes were up. The S&P 500 was up 1.47%, the Russell 2000 was up 1.75% and the Nasdaq 2.39%.

In exactly two months (March 31 to now), the Nasdaq is up a whopping 29.71%.

That’s crazy. And unsustainable.

I hate the word correction, because it implies that the market has done something wrong. But right now, I think a correction would be welcome.

The Greed & Fear Index remained in Greed territory once more.

Quick Facts

1. The Most Expensive Market Ever

I’m still torn about this market.

On the one hand, the valuations are crazy. Just look at this chart, for example.

Source

So, if you combine all of these valuation methods, we have the most expensive market ever. So, sell, right?

Well, not so fast.

First, I think quite a few of the used metrics are flawed. Market cap to GDP, for example. It’s often called The Buffett Indicator because Buffett called it “probably the best single measure of where valuations stand at any given moment.” And look where we are right now.

232%. If you know that 100% is considered fair and anything above 120%-130% (opinions differ) expensive, what is this market? Nonsense?

Well, not so fast.

First, the market has been expensive, based on this indicator, since 2012. If you had used it for market timing purposes, you would have lost a ton of money. This is how $10K has done since that ‘overvaluation’ started.

There are multiple reasons for the disconnection and for why the Buffett Indicator no longer works.

One is that many American companies get more of their revenue from global markets than in 2001, when Buffett wrote about the market cap/GDP indicator. Apple, Microsoft and many other companies get more than half of their revenue from abroad now and that is not included in the GDP, as that is Gross Domestic Product.

Secondly, it also doesn’t account for the higher gross profit margins companies have.

So, I wouldn’t attach too much weight to the Buffett Indicator. Of course, there will always be someone telling you that you should have known, based on this indicator or any other, when the eventual drop comes. But those people probably didn’t make much money for a long time, so pity them instead of paying any attention.

The Buffett Indicator is just one metric that doesn’t work anymore. Price/Book is also flawed. Companies need less capital in general to earn a ton of money. If you have a cybersecurity company, for example, you may need some data centers but you don’t even have to have your own. You could rent capacity from Amazon, Microsoft or Google (among others). Compare that to Coca-Cola building another factory.

And that’s also the reason the price-to-sales ratio doesn’t work anymore.

This market is expensive, for sure. But always be careful with charts like these.

2. A Very Cheap Market

As I just said, how you look at the market really depends on your perspective. This chart, for example, uses the gold price to evaluate markets and it says that markets are very cheap right now.

Source

I think F. Scott Fitzgerald’s quote is important in this context:

The test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function.

When you join Potential Multibaggers now, you get my entire investment system:

✅ Best Buys Now: every month, the 5 best stocks to buy

✅ My Proprietary Quality Score: rating companies on 17 quality metrics nobody else uses

✅ Deep Earnings Analysis: thorough breakdowns that reveal what really matters

✅ Valuations & Buy/Hold/Sell scales: cut through the noise and know exactly when to act

✅ 15,000+ Word Deep Dives: each pick gets 4-5 extensive articles so you understand exactly what you own.

✅ Private Community: direct access to me and 800+ serious long-term investors.

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It’s Sunday Funday time again!

Yes, a new Overview Of The Week. Without too much ado, let’s dive in.

Oh, don’t forget your tea or coffee! :-)

Articles In The Past Weeks

This is the fourth article this week. I’m keeping the pace high.

In the first article this week, we did a deep dive on the Nu Holdings earnings and looked if this was a good time to start a position or add to it.

We did the same thing with the Sea Ltd. earnings.

Yesterday, I published the third analysis this week. This time, we looked at Tempus AI. I analyzed the earnings, set up Selling Rules, updated the Quality Score and looked that the valuation. Is it a buy? You can find out here.

Memes Of The Week

Last week, there were most memes ever since I started compiling them. But the selection of this week is not wrong either.

This is the first one, about the SpaceX IPO.

Source

Here’s another one about the SpaceX IPO.

This is not a meme, but I still include it here. It’s the first time a part of an S-1 makes it in the meme section of the Overview Of The Week. Congratulations, SpaceX! This TAM (total addressable market) thing is the most ridiculous thing I have seen since the WeWork IPO.

Flo is our Meme King, but this week, his meme game was great again. His comment was: “This will get the stock moving.” It’s hilarious.

This is not a meme, but I found it funny enough to include it here.

Nvidia had its earnings this week. This meme played on that.

Brad from Stock Market Nerd also had a funny meme. The new favorite hedge fund trader is Leopold Aschenbrenner (first pic).

This is not the meme, but funny anyway, because it’s true.

Interesting Podcasts Or Books

It’s been a while since I shared a book here. Not that I stopped reading, but I also read a lot about other subjects. For example, I just finished The Obesity Code by Jason Fung. It really helped me to better understand GLP-1s. Not that that is the subject, not at all. But if you understand the problem better, you understand the solution better.

I also read about many other subjects and also novels, usually combining five books or more at the same time.

But before I share a book here, it should have something to do with investing. If you want me to change that, let me know.

In 2024, I read The Power Law by Sebastian Mallaby. The subtitle says it all: Venture Capital and the Making of the New Future.

It may sound a bit boring, maybe, but it’s a phenomenal book.

That’s why I also didn’t hesitate to buy Mallaby’s new book The Infinity Machine. Again, the subtitle says what it’s about: Demis Hassabis, DeepMind, and the Quest for Superintelligence. I only started it yesterday, but it starts out really great.

The markets in the past week

So, what did the markets do in the past week?

The Russell 2000 is almost always the most volatile index and that was the case again this week. It jumped 2.72%. The S&P 500 was up 0.88% and the Nasdaq 0.45%.

The Greed & Fear Index remained in Greed territory.

Quick Facts

1. AI Bubble Signs

Let me show you a chart that bothers me more than I would like. The Information put together the spending commitments of OpenAI and Anthropic to the four big U.S. cloud providers, as a share of those providers’ total revenue backlog.

Source

OpenAI alone has committed $280B to Microsoft and $300B to Oracle. Anthropic has $100B at Amazon and $200B at Google. Add it up and these two companies make up 43% to 54% of the entire revenue backlog at Microsoft, Oracle, Google, and Amazon.

Read that as what it is. Half the future revenue of these giants comes from two companies that don’t make any money. Anthropic spends about $3 to make $1, and that’s before staff, before electricity, before anything. Microsoft put $300B into capex and realized $18B in AI revenue.

You know me, I’m not a doomthinker. But I also don’t live with my head in the clouds. I know that these huge companies have gigantic resources. So, I’m not saying they will crack. But what if OpenAI gets into trouble, for example?

We already know about the circle. Everybody’s revenue is everybody else’s cost. OpenAI buys from Microsoft and they buy from Nvidia. Meanwhile, many enterprises paying for this are burning their annual AI budgets in four months with no measurable return.

I’m not saying it ends tomorrow. These things run far longer than you would think. But there are other signs as well.

2. DeepSeek Moment 2.0?

Something else that makes the AI ecosystem look fragile is this. It comes from the same player that first shocked the world with its much cheaper and technically differentiated AI. This is what it announced this week.

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It’s Sunday again and that means the Overview Of The Week’s back!

The markets are always uncertain, but lately, with AI and its (supposed) consequences, it’s more uncertain than usual. But sun or rain, bull or bear, up or down, the Overview Of The Week is here!

I’ve written a lot this week and I was happy with this comment from Multi Kamran:

Thank you Kris ... one of your very best analysis! All the analysis articles since you came back from Omaha have been beyond awesome!!! Something happened with you when you visited us in the US!!

And yeah, in a way, I feel the same. I got soooo much energy from Omaha. It was my third visit and by far the best. And the two previous ones were already so great! It feels almost like a rejuvenation process, haha. Talking to fellow investors, newsletter writers, portfolio managers, company management, people working at family offices and so many other professional and passionate investors really fed my enthusiasm.

On top of that, the event I organized with Pieter Slegers (Compounding Quality) and Brian Feroldi (Long-Term Mindset) also made me realize how much my articles mean to some people. I sometimes read that here (see Kamran’s comment above, for example), but hearing it in real life cranks up the good feeling for longer.

In Omaha, maybe 20 or 25 people also recognized me and wanted a picture with me. No, I’m not talking about my picture with Mohnish Pabrai, haha. Ordinary people whom I don’t know came asking for a picture with me, saying that they love Potential Multibaggers. That really felt great, and so, if you ever see me in real life, don’t hesitate to come talk to me.

On top of the wonderful experiences in Omaha, I had been on holiday in Egypt two weeks earlier. That definitely also helped.

And I see more opportunities now, which I like more than if stocks are expensive.

But enough about me, let’s dive into what you are here for.

Articles In The Past Weeks

This is the fifth article this week. Let’s look back at what you got before.

The first article this week was the earnings deep dive on TransMedics. The stock dropped about 40% over the last two weeks. You can read here if that means it’s a buy now.

Another stock that dropped a lot this year is Shopify. It’s down almost 50% fropm its highs in 2025. Same question, same approach: an earnings deep dive.

Friday, it was the 15th of the month and you know what that means: the Best Buys Now. This time, in a slightly new format.

Yesterday, you got my article about Mercado Libre. It’s another earnings deep dive that talks about the context of the margin compressions and negative free cash flow. You can read it here.

Memes Of The Week

There’s a good harvest of memes this week. It’s the longest selection since I started this.

This is the first one.

The second one laughs at the arbitrary nature of trade patterns.

For the third one, you have to read the text at the bottom first, the JPM assumption.

It’s funny to laugh with other people, but real intelligence shows when you can laugh with yourself. So, this is about many of us. :-)

And I think we all know this situation.

I made my own meme with this image.

And this shows that token costs hurt.

And we don’t stop yet. Here’s the next one already.

And the last one this week.

Source

Interesting Podcasts Or Books

The Compound and Friends is a podcast that is sometimes a bit chaotic, but the takes are always interesting. I listened to this week’s episode about the Nasdaq euphoria. You can listen to it here. I also listened to an episode of the great podcast series Founders. David Senra talks with Eric Jorgenson, the author of The Book of Elon, about, you guessed it, Elon Musk. It’s an interesting conversation on how Elon Musk functions.

The third podcast I listened to and that I want to recommend (I listened to more) was an older one that was still on my list. In the podcast In Good Company with Nicolai Tangen, the CEO of the largest single investor in the world, Norges Bank Investment Management, talks with interesting guests and Reid Hoffman is such a guest.

Hoffman was at Apple in 1994, founded a social network company called SocialNet in 1997 and was part of the Board of PayPal when it was founded. He became the COO of the company in 2000 and was part of the PayPal mafia, as the group was called. He then founded LinkedIn in 2002 and joined the Board of Microsoft in 2017, after Microsoft bought LinkedIn in 2016. He was also one of the first who gave capital to OpenAi in 2016 and joined the Board until 2023. Since then, he co-founded and funded several AI startups.

You can listen to the conversation here.

The markets in the past week

This is what the markets have done in the past week.

As you see, the S&P 500, up 0.13%, and the Nasdaq, down 0.08%, didn’t move much. The Russell 2000 dropped 2.37%.

The Greed & Fear Index remained in Greed territory.

Quick Facts

1. Why This Is Not Like The Dotcom Bubble

Last week, I wondered if the top was near. This week, I want to add some more thoughts about this.

First, I don’t think this is like 2000 yet. Markets are not as expensive as they were back then. I hear some people saying that. It’s nonsense. For example, Cisco traded at a forward PE of 150 at the time. Nvidia now? About 27. That’s a difference.

Maybe you think that this was the exception, but that’s not true. Look at this chart shared in the episode of The Compound & Friends I already referred to.

As you can see, the valuations were much, much more expensive back then. Now 59% of companies in the Nasdaq trade at a PE between 20 and 40. Back then, 76.4% was either unprofitable or traded at a PE above 60. So, no, this is not the same as the dotcom bubble.

This is another aspect of it, margins.

So, back then, 10% of the companies had negative margins. Now? None. There were no companies with margins between 50% and 100%. Now? 20.4%. If you look at 25% margins or more, then it was just 25.3%. Now 70.6%.

Things have changed. We live in the information economy now, not the mostly industrial economy of more than 25 years ago.

On top of that, there were hundreds of IPOs by companies that had one thing in common: they said they were internet companies and had no revenue yet.

Maybe you have seen this chart.

Source

It looks pretty scary, right? But with what you know now, it’s extremely unlikely that the market will drop 80% and take years to recover like back then.

Of course, a drop is always possible, but don’t be afraid of a dotcom scenario. Or at least not up to now.

Productivity is already scaling now, unlike then, the valuations are not like they were then.

For commodity products like memory, there will definitely be a bust at some point. I’m talking about Sandisk, Micron, etc. When? No idea. But if you look back at EVERY single infrastructure outbuilt in the past, that happened at a certain moment.

You saw the same in the infrastructure buildup for the internet. It’s not that we suddenly used less bandwidth in the early 2000s, to the contrary, but there was overcapacity because of efficiency jumps in internet delivery.

I think the same will happen now. I’m not worried about companies like Nvidia and AMD, as they have truly differentiated chips, but memory chips aren’t as high-tech as state-of-the-art GPUs. That’s just demand and pricing and if you look at the history of chips, especially those, they have always had a boom-and-bust cycle. Look at these charts and you will see what I mean.

This is Sandisk.

Look at revenue. It had a great jump, of course. But now look at net income. It was still negative in Q2 2025 and in Q1, it was already at $3.6B.

Ok, look at Micron.

Sure, Micron started at a higher income base. But, it’s the same pattern, revenue is up big, but net income much more. You can see that in the CAGR of 124.5% revenue growth, but 396.5% net income growth.

How is that possible? Simple. Pricing. Memory chip prices have ballooned because there is a shortage of memory chips. Once that imbalance is fixed, prices will drop by two-thirds or more. The question is when there will be more supply and/or when there are AI efficiency gains. I don’t foresee this going away anytime soon, so if you are a trader, I think there’s more juice in this lemon than you might think.

As for the market, I see two scenarios: the market will go down soon or it will continue to go up, haha. I’m making fun of it, but I mean it seriously.

Either the market lets off some steam soon (meaning in the next few months), which would be healthy, or the melt-up continues and that will only make the drop bigger.

But history seems to suggest that there will be a drop.

Beware: just because that’s what historically happened doesn’t mean it will now. But it’s possible. As always, we’ll have to see.

I get questions about where the system could break. Well, I don’t know. There are always many possibilities. Think of a black swan event, which is inherently unknowable. Or it could be spiking inflation. Or maybe it’s this.

Source

The earnings expectations for the S&P 500 for the next 5 years are now at 21%. That’s very high. Any disappointment there and the stock market tumbles. That’s how this game is played. And I don’t think it’s too crazy to expect lower EPS over the next 5 years. We all know about the gigantic capex the Mag7 and others are taking on now for data centers. You can’t extrapolate that line to the next five years and maybe some have, which could influence the average expectation.

Or will it be the new Fed Chair that causes pessimism in the market? I saw this graph.

Source

I should add again that I generally don’t draw too many conclusions from such charts. As so often, correlation is no causation. But still, it’s interesting to see.

I think that everyone who has followed me for some time knows I’m generally very optimistic. But I can’t close my eyes for certain things. That’s not optimism but pink glasses. I look at reality as it is and I believe things will turn out well. I do now as well, even if the stock market does not do great over the next few months or so. It will be a temporary hiccup. If it comes, that is.

2. Which Companies Are Interesting Now?

As you know, I invest in other stocks than the Potential Multibaggers as well. For newer readers, you could see that in the Best Buys Now article and in my portfolio, which is linked there.

In that context, I find this chart interesting. I had not seen it before I bought for my portfolio this week, but look, two of the stocks I bought are above the second line, the highest quality. Nvidia is, not surprisingly, the king of the heap.

I think if you look at the AI bottlenecks, you see that multiple big winners. And Coatue put that in a great visual.

Source

In the past 15 years or so, the Mag 7 has performed phenomenally, but will that continue? Their margins are no longer that high because of the huge investments they make and it’s very questionable if they will return in the first years, if they return at all.

On the other hand, they know that they have no other option. They have to spend to stay in the race. If they don’t do it, they will definitely be disrupted and that could cost them their existence as a relevant company.

Now, I know this still doesn’t really answer the question in the title of this paragraph. Which stocks are interesting now? Interesting and attractive are not the same, of course. I see a lot of interesting stocks that I wouldn’t want to touch now. On the other hand, there are also more attractive stocks because the AI trade drew money from elsewhere, mostly, but definitely not only, SaaS. Look at these two beauties, for example.

Just saying.

3. The SpaceX IPO

The new milestone for the market has a date: June 12. SpaceX will have its IPO on the Nasdaq on that day under the ticker SPCX. The company aims at a valuation of $1.75T to $2T.. That’s insane. It wants to raise $75B, which makes it by far the largest IPO in history.

Source

And no IPO without hype. After all, an IPO must be sold. Analysts called this a ‘Netscape’ moment. The Internet browser went public in August 1995. The shares were planned to go public at $14, were offered at $28 with a last-day change, opened at $71, reached $75 and closed at $58. It’s seen as the start of the dotcom bubble.

And yes, the peers of SpaceX immediately had incredible gains this week. Just look at these two: Rocket Lab and AST Spacemobile.

But the exceptional size of the IPO also has disadvantages. cut both ways. Some fear that the IPO will vacuum up even more liquidity from other places. SpaceX holds thousands of BTCs, and there is a fear that crypto traders will prefer SpaceX over crypto.

And talking about that, there’s a new Fed Chairman period. Look at this.

Now, as with so many things in the stock market, this is correlation, not causation. I think the SpaceX IPO could have a bigger effect on crypto than a new Fed Chair.

But back to SpaceX. MSCI and other index providers warn that SpaceX’s giant IPO will force big changes to benchmarks. Passive funds will have to buy massive amounts of the stock, and that could distort the market allocations for months. For months, meaning for six months, when the lock-up period ends. Then dozens of funds will dump SpaceX shares on the market.

Why? Because they are so overweighted SpaceX. They invested in private rounds and couldn’t sell. Scottish Mortgage Investment Fund (Baillie Gifford) for example, has a position of probably bigger than 15% of the fund and at this valuation probably more than 20%. They will want to take a big part of those gains. And they won’t be alone.

That could have effects for the market in another way. If all the money flows out of SpaceX, it could flow back into the market, into other stocks and that cause a new stock market impulse towards the end of the year.

Of course, that’s just theory. In theory, reality is easy, but in reality, it’s not.

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Tuesday afternoon, I got back home from Omaha (and fell asleep on the couch within 15 minutes of my arrival; jetlag is real).

That’s also the reason you didn’t get an Overview Of The Week last week, so this is one for two weeks. Shoutout to Mark for always being there to assist me with the OOTW!

An OOTW of two weeks means we’ve got a lot to cover, so let’s dive in right away!

Articles In The Past Weeks

Last week, I published my article on Celsius and you can expect a new one soon, as the new results are already out.

This week, this is already the fourth article.

The first one was about Omaha, Berkshire and 5 lessons. I hope to see you next year in Omaha, the festival for investors.

The two other previous articles were on earnings, both of stocks that have seen big declines recently.

On Friday, you got a deep dive into Duolingo’s earnings. And yesterday, I published my theory about the battle The Trade Desk is waging.

Memes Of The Week

Multi Flo is the Meme King, as we all know. And he proved that again this week by sharing this, asking what stage of the cycle we are in?

And Flo knows his classics.

I also had to laugh with this one. I sent it to some value investors. :-)

We all know about the Hanta virus by now. But we don’t have to worry about it, haha.

Markets are not the same anymore. Or are they?

Multi Dheeraj shared this funny one.

I laughed out loud with this one.

This is the last one of the rich harvest this week. You need some reading but it’s worth it.

Interesting Podcasts Or Books

I read Atomic Habits on the plane to and from Omaha. It’s a classic and maybe that’s why I had expected a bit more of it, but it’s still a good read.

The markets in the past week

As you can see, the Nasdaq was up 5.68%, the S&P 500 by 3.26% and the Russell 2000 by 2.66%.

More thoughts about this later in the article.

I don’t think it’s a big surprise that the Greed & Fear Index is in Greed territory.

It actually feels more like extreme greed.

Quick Facts

1. Are We Near The Top?

This is what I wrote two weeks ago:

This is a weird market. Despite Iran and the ensuing energy crisis, the indexes are at all-time highs. The fact that this is exceptional can be seen in this Bank of America chart.

Source

I want to point out a few other elements to show how exceptional this market is, and probably not in a good way.

While the S&P 500 is at all-time highs, just 42 of the 500 stocks contribute to the upside performance. Usually, that’s around 100. That means that the average stock in the S&P 500 has been struggling.

Just look at this chart.

Source

Based on the following metrics, US stocks appear expensive or very expensive right now. This is a Charles Schwab table.

Source

And this is another one that shows markets are expensive.

Source

As you can see, only Health Care trades at a normal level vs the 30-year trend. All the rest is expensive. As for the last decade, Materials, Health Care, Energy and Financials are more or less around the 50% mark. Again, everything else looks pretty expensive.

Now, we all know AI could boost productivity a lot and that could mean that what looks expensive could be reasonably priced in hindsight. But I think AI will need a breakthrough moment for that like DeepSeek was one. With the AI-related stocks, especially semis, going vertically, the stock market keeps frontrunning AI efficiency gains. That’s normal, but it also means the expectations could be inflated too much. But even if that is the case, it could mean there is another leg up.

Someone asked Grok a good question.

Someone asked an intelligent follow-up question, though. And that shows how hard market-timing is.

Something else that might illustrate the forming bubble is this.

Source

As you can see, the defensive sectors have the lowest market cap ever, even smaller than in 2000. And that is with Walmart at a forward PE of 45 and Costco at a forward PE of 49.

Michael Burry, who has predicted 27 of the last 3 bear markets, said that the markets feel like the last months of the 1999-2000 bubble. I don’t agree and this guy on X pointed out that Burry is often bearish.

This starts to feel like 2021, though. I even got questions from some Multis on “why I missed AI completely” while I’m long AMD, TSMC, Nvidia, ASML, Cloudflare, CrowdStrike, Broadcom, BESI, and others. I also pointed out the opportunity for Micron about 400% ago.

In 2021, the rise of meme stocks led me to make my worst investment ever: Skillz. It was a tiny position in my portfolio (less than 0.1%), but it still stings that I was fooled into believing the market conditions were normal.

But back to the market.

This is the Schiller CAPE ratio:

Source

At the same time, even if you only poured all of your money into the Nasdaq 100 exactly at the top of the tech bubble (which would be a pretty awful strategy), you would still have averaged a yearly return of 8.2% at this moment.

That is the power of long-term investing.

There are many warnings out there now. Look at this one, for example.

As everyone knows, correlation is not causation, but there are quite a few signs pointing in the same direction.

This is another one.

But this doesn’t mean you should time the market. There’s also this.

If so many people are hedged, that can have the opposite effect and there could be a gamma squeeze. When you buy a call, market makers (think of Citadel) sell it to you, but they have to buy the underlying stock or ETF. That drives up the prices, causing more calls and Citadel and others buying more stocks. That causes the gamma squeeze.

But at the same time, such high call volumes have often marked tops. And a lot of the calls are zero-day calls, which are the most volatile of them all. It’s not particularly a sign that the markets are healthy, but that there is a lot of speculation. But you probably didn’t need this explanation to know that. You can also see that in this chart. It shows that high-beta stocks hit an all-time high relative to the S&P 500. The “safest” stocks hit all-time lows.

Source

But there are counterindicators as well. If you look at the IPOs, for example, you don’t see a boom there yet. At the same time, I have already said multiple times I believe there is a bubble in private markets, with companies like SpaceX, Anthropic, OpenAI, Loveable, Stripe and other companies mostly linked to AI. That could explain why there is no surge in IPOs.

But with SPACs, NFTs, web3 and other crazy stories in 2021, it went pretty wild. I don’t have the feeling we are there yet.

But you can’t really know and the best thing is to keep investing. But if you are worried about the markets, you might have some bigger cash cushion now.

2. ServiceNow Dead? Nvidia Doesn’t Think So.

At ServiceNow Knowledge 2026 in Las Vegas, Nvidia CEO Jensen Huang went on stage with ServiceNow CEO Bill McDermott to show how the two companies want to partner to make enterprise AI more than just some chatbots.

Source

ServiceNow launched Project Arc, an autonomous desktop agent. The system can figure out tasks, write code, use enterprise apps, access files and terminals, and adapt when workflows change. Instead of using rigid automation scripts, the agent works more like a human employee who has to deal with unexpected situations.

Nvidia’s Jensen Huang said software is moving into a big new market. Factories, logistics, warehouses, and supply chains will all be automated with AI. He said that the entire factory will be a robot and it will be managed by AI agents. The partnership between Nvidia and ServiceNow is based on that vision. ServiceNow will take of the rules, approvals, and workflow management for AI agents, while Nvidia provides the chips and secure software environment that lets the agents run safely.

ServiceNow CEO Bill McDermott said many companies are deploying AI without proper controls, creating major security risks. The Project Arc platform is a safer way to scale agentic AI across the enterprise.

Huang also said agentic AI requires about 10x more compute than earlier generative AI systems because agents must reason, use tools, and execute tasks continuously in real time. Of course, that’s a huge driver for Nvidia chips.

FedEx was there as well. The company served as a real-world example of this. The company already runs millions of ServiceNow workflows monthly while building AI-driven digital supply chain systems.

This is interesting, as we all see the limitations of current AI applications at the enterprise level.

3. 1 In 8 Americans Now Use GLP-1 Drugs

I saw this graph this week.

Source

12.4% of Americans are already on GLP-1. That’s wild if you think that just over a year ago, in February 2025, that number was 5.8%. I think we are just at the beginning of this trend.

As usual, Fiscal ai has the data precisely.

This shows that Eli Lilly is winning the battle with Novo Nordisk. And with retatrutide, a so-called triple G receptor agonist (GLP-1, GIP, and glucagon) in Phase 3 trials and label expansions (think of alcoholism, for example), I think the stock is interesting here. “Reta,” as it is already known, showed even greater weight-loss effects (up to 28.7% of body weight), as well as type 2 diabetes (not surprisingly) and knee osteoarthritis.

Retatrutide may be even a bigger blockbuster than Zepbound and Mounjaro. Novo Nordisk might look much cheaper, I wouldn’t want it in my portfolio. Look at the revenue growth projections for the next two years.

Compare that to Eli Lilly:

And I think that the 2027 estimates will be way too low if the company can release retratrutide in 2027, which is expected.

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It’s Sunday and that means the Overview Of The Week again. On Tuesday, I am leaving for Omaha for the Annual General Meeting of Berkshire Hathaway.

It’s the first time without Warren Buffett, but I am still looking forward to it. To be honest, the Berkshire AGM is OK to follow live, but you can probably follow it better through the livestream. The really fantastic thing about Omaha in that week is that everyone who means anything in investing is there and there are numerous events in the days around the AGM.

I have the honor of inviting you to two of those.

The first is one I organize with Pieter Slegers and Brian Feroldi. On Saturday evening from 8.15 pm to 10.15 pm in the speakeasy Howard & Fine, inside Moe & Curly’s Pub And Grill.

Please register if you want to come.

You can do that here.

I hope to see you there!

Secondly, my friend Vitaliy Katsenelson organizes a FREE BREAKFAST in Omaha on Sunday, May 3. He allowed me to invite every single one of you. Important: if you want to go, you have to let him know. No registration, no breakfast. But it’s totally free. Don’t wait too long, because, while there is a big capacity, I think it will be full fast. I will be there as well. You can register here.

One last announcement: since I will still be in Omaha next week, there will be no Overview Of The Week next Sunday.

Articles In The Past Weeks

This is the third article this week.

The first one was about ServiceNow.

In the second one, I combined the Best Buys Now and the additions to the Forever Portfolio. You can read that article here.

Memes Of The Week

Four memes this week. The first one plays on Bitcoin’s weak performance over the last year.

Source

If you want to know why I’m a long-term investor, this is one of the reasons.

I also had to laugh with this one.

Flo shared this one about ServiceNow.

Interesting Podcasts Or Books

I listened to a very interesting Invest Like The Best podcast episode this week. The guest was Dylan Patel and if you want to have insights on the edge of AI and chips. You can listen to it here.

The markets in the past week

The Russell 2000 was up 0.36%, the S&P 500 0.55% and the Nasdaq 1.50%.

The Greed & Fear Index surged incredibly in the last weeks. It was at 9 on the 14th of April, now it’s already at 66, in Greed territory.

Quick Facts

1. An Exceptional Market?

This is a weird market. Despite Iran and the ensuing energy crisis, the indexes are at all-time highs. The fact that this is exceptional can be seen in this Bank of America chart.

Source

A portfolio of 25% in stocks, bonds, commodities and cash is up 26%. That is the highest return since 1933, when the stock market was still suffering from the results of the Great Depression. That shows that these are not normal times. On the other hand, are there “normal” times in investing?

But at the same time, the fact that there’s a fast recovery after a crisis is not that exceptional. Look at this overview.

Source

Investors often panic, but just focus on the long term, not the short term. Not that focusing on the long term is easy.

Now, just to be clear, the recovery has been remarkable. The S&P 500 is up 12.5% over the last four weeks and that was the 20th-biggest 4-week jump since 1950.

Source

2. Tech? Tech! Well, Some Tech.

The S&P 500 at all-time highs is not that crazy if you see that the earnings estimates for this year and next year keep going up. But the crazy thing is that almost all of the estimate upgrades come from three sectors: energy, materials and tech.

Source

As you can see, tech is very resilient, with EPS estimates up already 11% this year and 15.1% for next year.

But of course, tech is divided into multiple subdomains. If you look at the companies that

Source

As you can see, Micron alone is responsible for 51% of the EPS revision for the S&P 500. That’s totally nuts and it shows in what exceptional times we live. Add Broadcom and you already have 61%.

And it’s not just Micron. Semiconductors now make up 14% of the Total US stock market cap. That’s up 3x in three years and double as much as during the dotcom bubble. Crazy times.

Source

3. Charlie Munger and Howard Marks

I’m showing this X post completely, as it is important.

An overwhelming majority of people are focused on the short term, even if they think they are not.

One of the biggest investing mistakes you can make is selling winners too early. That’s why I always err on the side of holding too long, not selling too early. Selling too early can feel right over the short term but can be a huge way of missing out on the best investment of your life.

4. Earnings In The Upcoming Week

Normally, I do this at the end of the article, but this time, I put it here, as the upcoming earnings week is pretty crazy, especially on Wednesday, when Microsoft, Amazon, Meta, and Alphabet all publish their results at the same moment. Chipotle Mexican Grill, Brookfield, and KLA Corporation also report at the same time. Apple and Mastercard report on Thursday and Spotify, Visa and Robinhood report on Tuesday.

Source

What a week! In total, 172 S&P 500 companies report in the upcoming week, so I think it’s fair to say this is the most important earnings week for the market when it comes to Q1 2026 earnings.

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Did you check your calendar when you saw the Overview Of The Week come in?

It’s Saturday, not Sunday, but you already got the Overview Of The Week today.

The reason could already be deduced from the title. I’m going to Egypt with my family for a week. As a child of the 80s, I have to think of the great Bangles hit “Walk Like An Egyptian” every time I hear the country’s name. I know it’s maybe a bit immature and culturally not fair for a country with such a rich history, but it’s true.

Source

As a sidenote, the songwriter, Liam Sternberg, was a bit tipsy when he crossed the English Channel. The sea was choppy, and passengers and waitresses had to do moves to keep their balance. It reminded him of the postures of figures in Ancient Egyptian tomb paintings. But back to today.

The consequence of this very-last-minute holiday is that you get the Overview Of The Week on Saturday already, that you will hear me less often in the upcoming week and that there will be no Overview Of The Week next Sunday (no, not next Saturday either).

I have worked on part two of the new pick. I already have about 6,000 words, but I could cut or add words depending on my editing process. So, that’s one you might get in the upcoming week. Or, if not in the upcoming week, definitely in the week that follows. It depends on how much time I will dedicate to working there (don’t pity me, I still love what I do!) and how many hours the article still needs, which I never know exactly and chronically underestimate.

Articles In The Past Weeks

This is just the second article this week. The first one was, of course, on the new pick. You can read the full 7,600 words here.

Memes Of The Week

Three memes this week. This is the first one.

And the second one.

I always love it when people can break out of the current paradigm to mock it, like this one, for example.

Interesting Podcasts Or Books

One of the biggest influences on my investing was David Gardner. As long as he still talked about stocks himself, until 2021, I never missed an episode of his podcast. Now, I listen every now and then and this week, I did that. In this episode, David Gardner talks about little tricks that can help you in life.

The markets in the past week

For a while now, the market and tech stocks have been disconnected (more on that later), so if you are overweight tech (like I am), it’s now harder to assess the broader market by looking at your portfolio alone.

Let’s look at what the indexes have done this week.

As you can see, the markets were up substantially again, just like last week. The Nasdaq won 4.68%, the Russell 2000 3.97% the S&P 500 3.56%.

So, where does that leave us year-to-date?

So, after this week:

• The S&P 500 is down just 0.42% YTD,

• The Nasdaq is -1.46% YTD

• The Russell 2000 is up 5.99% YTD.

Remarkable. Because it doesn’t feel like that. But those are the numbers.

At the beginning of last week, the Greed & Fear Index dropped to 9 but it ended the week at 19. This week, it continued to zoom up, to 38.

That’s still in Fear territory, but the sentiment seems to be improving fast.

Quick Facts

1. Nasdaq 100 Replaces Atlassian by Sandisk

This week, the Nasdaq 100 has booted Atlassian (TEAM) from the Nasdaq 100. It is replaced by Sandisk (SNDK). There was not a single reason why Atlassian was replaced, but the fact that the stock is down the second-most over the last five years won’t have helped. Only “PainPal” did worse over the last five years.

But being removed from the index is not always as negative as it sounds. Sometimes those stocks have already had a big drop and the removal sometimes marks the bottom. On the contrary, the stocks that come in have often had a big recent jump, and that goes for Sandisk too. It’s up more than 25x over the last year.

But, as said, that doesn’t always mean it’s a good thing to “sell your losers” and “keep your winners.” In general, if the investment thesis holds, it’s often a good thing to hold the stocks that are out of favor.

Charlie Bilello gave an example of this with an index replacement. In August 2020, Exxon Mobil was removed from the Dow Jones Industrial Average, and Salesforce replaced it. Exxon returned almost 4x since then, while Salesforce is down almost 40%.

2. Private Equity In Trouble? Or Opportunity?

For about a year or so, I have said every now and then that I saw a bubble in private equity. I couldn’t put my finger on it exactly, but I saw initiatives by people with questionable integrity that wanted to ‘democratize’ private equity. If that’s the case, you know something is fishy.

Private credit was the first problem for private equity. This story is still evolving, but it’s clear some private equity funds will get hurt. The second and simultaneous problem for private equity is the massive exposure to software. Only in the last few months of this year have software deals come down a bit, but they still account for 49% of all deals.

Private market managers poured hundreds of billions of dollars into software firms over this period, betting that software-as-a-service (SaaS) business models would produce strong growth and consistent cash generation. The private equity industry has never been this exposed to a single sector. But now valuations crash and don’t forget that private credit was also mostly given, probably much more than 49%, to software companies.

I’m very sure that some of the software names out there are babies being thrown out with the bathwater, but there will be AI disruption of software companies that only have a nice interface, but no proprietary data, insights, high switching costs or network effects. That means that this is a double whammy for private equity.

Now, the market has sold off many private equity companies and there too, some opportunities could spring up soon. I’m thinking of companies like Brookfield (not that far off its high) and KKR, both part of a cream-of-the-crop group in private equity.

3. Amazon’s Hidden Chip Giant

Amazon’s stock was up about 12% this week after its CEO Andy Jassy published his annual shareholder letter and gave a few interviews.

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Jassy shared that Amazon’s AWS AI revenue was already at a $15 billion annual run rate in Q1 2026. Evercore’s Mark Mahaney, a legend in tech investing, had forecasted somewhere between $5 and $10 billion. Three years into the AI wave, AWS’s AI run rate is nearly 260 times bigger than AWS was at the same point in its history. Not a typo. 260x.

The crazy thing is that AI revenue wasn’t even the best news. The chip business inside Amazon seems to have been underestimated for a very long time.

Amazon’s custom silicon division, which includes Graviton (’CPU’), Trainium (AI accelerator), and Nitro (networking), is now at a $20 billion annual run rate.

That doubled from $10 billion at last quarter’s earnings. On top of that, Jassy said if Amazon’s chip division were a standalone business selling to third parties like any other chipmaker, the annual run rate would be around $50 billion. That would make it comparable to Broadcom’s AI chip business.

The market assigns zero value to Amazon’s chip business because it’s buried within AWS. And yet it’s potentially a $50 billion standalone operation. That’s bigger than 82% of the Fortune 500.

Two large AWS customers asked if they could buy all of Amazon’s Graviton capacity for 2026. Amazon had to say no because, well, other customers exist.

On the Trainium side, Trainium 2 is completely sold out. Trainium 3, which just started shipping a few weeks ago, is nearly fully subscribed already. And a significant chunk of Trainium 4, which is still about 18 months away from broad availability, has already been reserved.

AWS CEO Matt Garman confirmed at re:Invent that all currently available Anthropic models were trained on Trainium. There are now 1.4 million Trainium chips deployed across all three generations, and Anthropic’s Claude runs on over a million Trainium 2 chips. Anthropic helped AWS co-design the chip from the ground up, working at the kernel level with Amazon’s Annapurna Labs team.

This all tells you something about the chip demand. For Amazon’s chips, but also chips in general. As I wrote last week, it may be time to buy Nvidia again.

Free cash flow dropped from $38 billion to $11 billion because Amazon is spending almost $200 billion in capex in 2026, mostly on AI infrastructure. That scares people. But Jassy said Amazon already has customer commitments for a substantial portion of this capex, with most of it expected to be monetized in 2027 and 2028. That includes the $100 billion-plus OpenAI commitment, on top of the Anthropic partnership.

In January, I made 5 bold predictions for 2026. I’m still confident that these two will prove to be true.

4. Anthropic: The Stock Destroyer (part 372)

At this point, Anthropic might be the single most effective stock destroyer on the planet. Every time it puts out a press release, dozens of stocks drop like a rock. The market sells first and reads the press release in full later.

It happened again this week. Anthropic announced Claude Mythos Preview, a new AI model it considered too dangerous for public release, and launched Project Glasswing, a cybersecurity initiative around it.

Mythos found thousands of vulnerabilities across every major operating system and browser, including a 27-year-old bug in OpenBSD, a system that’s famous for being unhackable and a bug that had been hiding in FFmpeg for 16 years and survived five million automated scans.

Sounds impressive, right? It is. But look at what happened before anyone even digested the details.

When Fortune first leaked the existence of Mythos back in March, cybersecurity stocks cratered. CrowdStrike dropped around 10%, Palo Alto 8%, Cloudflare 14%. The narrative instantly flipped from “cybersecurity spending is non-discretionary” to “AI will make all security software obsolete.” Billions in market cap gone in hours, all because of a leaked draft blog post.

Then, this week, the actual announcement came out. And guess what? CrowdStrike and Palo Alto were named as launch partners.

This is the pattern now. Anthropic says something, the market panics, software and cybersecurity names get slaughtered, and then people actually read the announcement and realize it’s more nuanced than “everything is dead.” But they have sold their stocks and then invent a rationally-sounding explanation like “more uncertainty.”

This fits into the anti-bubble I’ve been writing about. In the dotcom bubble, the biggest bubbles were in public companies. Think Yahoo!, Pets(.)com, Webvan and many others.

In contrast, this time, the biggest bubbles are in private markets: Anthropic, OpenAI, SpaceX, Stripe, ...

I’m not saying these aren’t phenomenal businesses; they clearly are. But the valuations are crazy. And the result is that money is being pulled out of public markets to chase these private names (see above in this Overview Of The Week for the percentage of software in private equity).

This puts more selling pressure on the public companies that are supposedly disrupted. Look at this chart that Michael Batnick shared:

This is about Wednesday and Thursday. The S&P 500 was never up this much with software down this much. This already shows you again that the movements are extreme.

Public shareholders get hit twice: once by the panic selling after every press release, and again by the capital outflows into private markets chasing the next hot AI round.

At the same time, forward earnings expectations for software stocks continue to go up.

Source

I’m not saying Anthropic is doing this on purpose, but it’s a hypemachine. An AI model too dangerous for public release? I don’t know about you, but damn, I want to try that out! I’m still frustrated a lot with the current models, for many use cases.

The model is clearly very powerful. It found four vulnerabilities that escaped for so long. Anthropic said these capabilities weren’t even trained intentionally. They just emerged.

But the market keeps pattern-matching “new AI capability = existing companies are dead” without doing the work. The companies inside Project Glasswing, Amazon, Apple, Microsoft, Google, Nvidia, CrowdStrike, Palo Alto, Broadcom, and about 40 others, are getting $100 million in usage credits and early access. They’ll be stronger from this, not weaker. Being at Anthropic’s table is probably better than being on its menu.

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Happy Easter if you celebrate.

I don’t always publish the Overview Of The Week on such special days, but I wanted to do it this week, especially because I have an announcement to make. And of course, as always, some thoughts about the markets. Let’s dive in.

Articles In The Past Weeks

This is just the second article this week. The first one was on Topicus. You can read it here.

A NEW PICK!

There were two reasons I published only one article this week.

The first one was private. On Wednesday evening, my good friend Michael Gielkens invited me to Maastricht to hear Sofina CEO Harold Boël speak.

(Source)

If you don’t know Sofina, it’s one of the best Belgian holding companies. It’s been run by generations by the Boël family, who made their fortune through steel.

While I was in Maastricht, I also took my bike with me and did two days of cycling, which really gave me the same feeling as a full week of vacation.

The first day, I did a relaxing and flat 50-km ride in Belgian Limburg, the second day was an 80-km ride in Dutch Limburg. There, I did some hills you might know from the Amstel Gold Race (if you like professional cycling): Cauberg, Geulhemmerberg, Bemelerberg, Looorberg, Camerig, Vaalserberg and several others that are not included in the race.

But there was a second, for you much more important reason why I only published one article this week: research.

Two weeks ago, I already wrote this:

I’ve been researching much more this week, as there are more attractive stocks with this pullback. There may be crystallizing something, but I’m not sure yet.

It’s that same stock that really convinced me in the last few weeks. I’m always careful to share anything because I want to have the option to withdraw at any step of the process. If I find something that impacts the thesis too much, I want to throw away my work. Without a doubt or without sunk cost fallacy. If I announce too much in advance, I feel too obligated to live up to my promise.

But I have done all the work now and found nothing about the new pick that worries me too much and a lot that makes me really excited. That’s why you will get the new pick this week, probably on Tuesday or Wednesday. I have the outline of the first article, but it still needs some work.

I’m very excited about this new pick. It has been on my Watchlist for a long time and because of the recent pullback, I think it’s the right time to invest in this company.

Memes Of The Week

Just one meme this week, but it’s a good one.

Interesting Podcasts Or Books

This week, I listened to the No More Investing Secrets podcast.

The episode was about Constellation Software, the SaaSmageddon, Wise and much more. You can find it here.

The markets in the past week

This week, the markets were up substantially. The Nasdaq won 4.44%, the S&P 500 3.36% and the Russell 2000 3.28%.

While the Greed & Fear Index dropped to 9 early in the week, it ended the week at 19. Still in Extreme Fear, but not as much as it was.

Quick Facts

1. Buy Stocks!

Ben Carlson wrote this on X this week:

No one knows how long a correction will last when you’re in it But buying stocks when they are down tends to be a good long-term strategy A look at what happens when you buy the stock market down 10%, 20% and 30%.

I keep repeating such stats because I know it’s necessary. I’ve seen it so many times before: people nodding when I point such things out, even saying “of course” when I show them the theory, but when it comes to action, they are still doing the exact opposite of what they theoretically know to do.

The difficult thing about investing is that we are used to immediate feedback, not delayed feedback. In that sense, investing resembles the long-term effort of building a business, training for a sports career, or anything else that takes years to build. There will be rough patches, like injuries in sports, but only with persistence, you will succeed.

This overview shows the same thing.

(Source)

As you see, in most of the years, 63% of the years to be exact (12/19), the stock market was positive from day 60 to the end of the year.

Now, to be honest (and long-time Multis know this), I don’t care about my returns for the year. I focus on the real long term, preferably decades.

2. Is It Time To Buy Nvidia Again?

This week, several people sent me this and today, Karan also shared it on Slack.

Quietly, Nvidia seems to have become very cheap again, at just 18.7x forward earnings, a multiple it has not traded at since 2018. That’s crazy, if you know that the stock is up 60% over the last year and 1,170% over the last 5 years.

The funny thing is that many people think Nvidia is expensive because it’s up so much. But you can see here, that it’s not multiple expansion, just sheer earnings power.

The Return Of The Potential Multibaggers

So, how did our stocks do this week? This is an overview of all the stocks that moved 5% or more. There were 10 stocks this week, all up more than 5%.

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Yesterday, I was a speaker at the VFB Conference in Antwerp. You can see a picture here that Multi Frederic sent me. Thank you very much for that pic. It’s the only one I have so far. There were multiple professional photographers, but it takes a while before I will have those pictures.

There were 2,000 investors there and I spoke with many people. Overall, the sentiment is really negative now.

I also spoke to some Multis who were there and came to me. Thank you for those great conversations. And what stood out to me is that Multis are wired differently. While the general mood was one of negativity about the state of the world and investing, Multis can see through the clouds. They are more optimistic.

Now, that doesn’t mean it’s easy for Multis to invest now. We are all humans and that leads to conflicting feelings. On the one hand, many of you have seen this (and worse) before.

Sometimes, people seem to forget that in 2022, there was a crash for tech stocks. The Nasdaq as a whole was down 36%, more than during the Covid crash. Right now, the Nasdaq is down ‘just’ 12.5%.

But the problem, both then and now, is that many stocks are down much more. Here are just two stocks from then, for example: Shopify and Cloudflare. Shopify was down more than 85% from top to bottom and Cloudflare 83%. This chart doesn’t show you the exact numbers because the stocks bottomed at a different moment, but it gives you a feeling of what it was.

You see the same thing now. While the index isn't down much, some stocks are down a lot. There’s negative market sentiment for all that are down and some have real or perceived company-specific issues.

It’s always possible that some never recover. That’s inherent to investing. You can never have only winners. The only thing we can do is keep monitoring our holdings closely, look at the fundamentals (not the price) and have patience.

I promise I will do my utmost best to help you to bridge this period.

Maybe this stat can help you. This is a midterm year and many midterm years have negative returns but all the consecutive years have positive returns since 1950, with an average return of almost 40%.

Source

Of course, this is not a guarantee. Every situation is different and correlation is not causation. But don’t forget that the short-term market movements are emotional. But what will be the impact of the Iran war? We don’t know. We can only keep investing. Time in the market will always beat timing the market.

What we see now is a multiple contraction. The market dropped from a forward PE of 23.1 to 19 times in just a few times.

Source

And do you want more reassurance? I saw this post.

Again, be careful with these kinds of predictions. The markets are unpredictable. But overall, I think the sentiment is too negative now.

And you can see that from this as well. Nomura released a chart this week and I think it’s interesting.

It shows S&P 500 implied skew versus realized skew. In plain English, the red line is how much people are paying for downside protection (puts versus calls). The grey line is how much the market has actually moved down.

Look at the right side of the chart. The red line is spiking to high levels, even though I also want to point out that the period is short. But it shows that investors want protection against a crash. Many seem to expect the worst.

But if so many are already hedged, it actually protects the index from a big drop. After all, you won’t sell if you are hedged. I’m not saying we can’t go lower. We absolutely can. Duh! But it seems like a lot is already priced in. Maybe not in the index but in the hedges.

Also, don’t forget that the stock market just pulls back every now and then. Ben Carlson made this chart with an overview since 1928.

I also laughed with his description of what a bear market is:

Something that only lasts for like a month and happens every 3-5 years

So, don’t overreact. Just stay invested. Just look at this post.

I always see people who say that if you miss the worst days, the result is similar. Of course it is, but you won’t time the worst days well without missing the best days. In that context, this sentence is crucial:

8 of the 10 worst days happened within 1 week of the best days.

Ok, one more, to close this off. This chart.

Source

So, except for the mid-70s, the bottom was always very close when the stock market dropped 10 of the last 11 trading weeks. Again, correlation and causation are not the same, but maybe we are closer to the bottom than we might realize. Judging on the sentiment I hear from investors, which is very gloomy, that might be the case.

But the best thing of all is that you don’t have to predict this right. Just stay calm, keep investing and that alone will make you stand out.

And drink coffee or tea, if you like that. :-)

Articles In The Past Weeks

This is the fourth article this week.

In the first article, we analyzed TransMedics’ results and whether the stock is a buy now.

The second article showed that AI is a benefit, not a headwind, for CrowdStrike.

In the third article, I showed you which stocks I bought for my PM Future Fund portfolio.

Memes Of The Week

It was a bit calmer on the meme front this week, with just two memes I liked enough to include here.

The second one tells you something about perception. The S&P 500 is now at the same level as in September 2025, but it feels totally different.

Interesting Podcasts Or Books

I didn’t find the time to listen to an investing podcast or start a new book this week.

The markets in the past week

I don’t think I have to tell you that most stocks were down, but surprisingly enough, the Russell 2000 was up 0.46%. The S&P 500 was down 2.12% and the Nasdaq 3.23% this week. That’s quite a lot for indexes.

You won’t be surprised that the Greed & Fear Index dropped further, to 10.

Quick Facts

1. AI is not killing engineering jobs

Look at this chart from Trueup, shared by Lenny Rachitsky this week.

67,665 open engineering jobs globally. That’s 78% up from the low of 37,982. The most open engineering roles in over three years.

But yeah, of course, software engineers will be replaced by AI, right?

What we’re seeing here is Jevons Paradox playing out in real time. When something becomes cheaper to produce, you don’t use less of it. You use more. Way more.

Think about what’s actually happening on the ground. Companies outside of tech are realizing they can now afford software projects they would never have given the green light two years ago. Marketing teams at big corporations are bringing in engineers to automate workflows. Life sciences and healthcare companies are hiring engineers to automate research pipelines. Small businesses are hiring their first engineer ever to build better digital experiences. I could go on, but you get the picture.

Projects like this were too expensive or too complicated before AI made software incrementally cheaper.

Jevons Paradox means that if something becomes cheaper, the demand increases exponentially.

That means there will be much more software than ever before. And the people who understand how to build, maintain, and fix it will be wanted, just like they have been for years.

AI agents still require a human who understands what to prompt, how to review when an agent hallucinates, how to maintain the system that was built and so on.

All the advice floating around telling young people not to go into engineering is, in my opinion, very wrong. It sounds smart gets you clicks but data says the opposite. AI is currently not killing engineering jobs, no matter what you hear.

Of course, you might be shown this graph.

In that context, the rise of job postings looks minimal But you can see that the huge peak was caused by Covid, not by AI. Many people were fired during Covid, and, of course, job openings peaked when things normalized again.

2. Recession? CFOs Don’t Think So

This week, I saw this chart from The Daily Shot.

It shows the CFO Survey, tracking optimism about the US economy versus optimism about their own company. And there’s something interesting going on.

CFO optimism about the broader economy, the black line is down a bit. That’s what you would expect, with tariffs, the situation with Iran and its consequences, and the overall sentiment.

But look at the blue line. CFOs rate the optimism about their own company still very high.

Don’t forget that CFOs are well-informed. They see the order books and the margins. So, the difference in perception is interesting.

Now, this doesn’t mean everything is fine. CFOs can be wrong too. They can’t look into the future without fail. Orders can be canceled. But right now, CFOs, who have some of the best data points out there, are still confident about their own companies.

To me, that information is more valuable than a thousand doom-and-gloom X posts.

3. The US Market Concentration In Context

There’s been a lot of drama around market concentration in the US. The Mag 7 are too big, the S&P 500 is too top-heavy, it’s dangerous, it’s a bubble, etc. You’ve probably heard it all.

For context, look at his chart from Bloomberg Intelligence this week.

It shows countries ranked by the percentage of the market in the 10 biggest stocks. The US has only around 30%, one of the lowest concentrations. Some go to 80%.

Some concentration is completely normal. Great companies tend to keep growing. If you do well, it’s normal that your market cap keeps growing.

One of the things I see constantly in investing is people overcomplicating things. No, a slightly higher concentration in the top 10 stocks in the US doesn’t mean there’s a bubble or anything else. There’s too much noise out there.

4. Software Is Not Dead, Part 347

I know I have repeated this message in several forms multiple times already. But if I feel that everyone else says it differently, I think it’s good to keep repeating this to have a counterbalance to the noise.

Thoma Bravo just released their LP meeting slides. For those who don’t know, Thoma Bravo is the world’s largest software-focused private equity firm.

And what are they seeing? Fundamentals have improved while valuations have compressed. Look at this chart.

Source

The Rule of Profile (free cash flow margin plus 2x revenue growth) has been trending up since mid-2024, hitting around 34-35%. At the same time, EV/FCF multiples have dropped like a rock because “AI will kill all software.”

Thoma Bravo’s view is simple and aligns with mine: all software companies are created equal. Business durability matters more than sentiment and sentiment creates opportunity.

Thomas Bravo has more data, more due diligence, and more skin in the game than any influencer tweeting about how AI will replace all SaaS. Or even multiple times more than hedge funds trading on this theme.

The market is not distinguishing between software that will be disrupted and software that will adapt and thrive. It’s selling everything. That’s how you get opportunities.

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How are you doing? I hope you are not too stressed out about the markets. This week, I got a reminder that the markets are not the most important thing in my life.

Our daughter Romy (she’s 11) broke her little toe from jumping on a trampoline.

Of course, that’s nothing to really worry about, but every Multi parent will know that seeing your child in pain really affects you deeply and if it were possible, you would take over the pain without any hesitation.

Zack, who writes these great articles for you, is also very sensitive and he felt I was a bit less connected this week.

So, yes, I am OK. And I was indeed a bit less active this week. Next to spending a bit more time with our daughter, I’ve been working a bit more behind the scenes for long-term initiatives in the last few weeks. The results may or may not become visible towards the end of the year or early next year. We’ll see. I’ll update you asap if something starts to get more concrete. IF because it’s not certain, as many things in life and investing.

On top of that, I’ve been researching much more this week, as there are more attractive stocks with this pullback. There may be crystallizing something, but I’m not sure yet.

Having said that, let’s dive into the Overview Of The Week.

Articles In The Past Weeks

This is the third article this week.

In the first one, I gave you the five stocks I consider the Best Buys Now. Of course, because the whole market is down, these stocks are down as well and that’s why I see them as even more attractive. As always, I put my money where my mouth is and I bought these stocks, together with a few more.

The second one was a deep dive on Mercado Libre. I really invested a lot of time into the article. You can read it here.

Memes Of The Week

Scary times mean the number of memes shoots up, and we can appreciate them more.

This is the first one. I made it myself, based on this post.

Multi Julien did a big investment to beat the index this year.

And this one shows that AI is not always as productive as you would want it to be.

And Multi Julien, who lives in Belgium, where Meli is a brand of honey products, posted this one as well.

Interesting Podcasts Or Books

This week, I watched Drew Cohen’s deep dive on Mercado Libre. You can find it here.

The markets in the past week

While the Russell 2000 dropped the most the past few weeks, it now dropped the least, with 1.68%. The S&P 500 dropped by 1.90% and the Nasdaq by 2.07%.

Despite the alarm messages you hear and see everywhere, the S&P 500 is down just 6.77%. The Nasdaq is down 9.65% and the Russell 2000 is now down more than 10%. That’s a correction already.

That means there could be much more downside. Or not, of course. You never know in the markets. The stock market can drop hard and fast, 2020-style, or slower, 2021-2022-style. I don’t know which one is more painful. More about this later.

You won’t be surprised that the Greed & Fear Index dropped further, to 15.

Quick Facts

1. Bear Market Ahead?

I hear a lot of negativity from all sides, even with the main market indexes not even in a correction (a 10% drop) yet.

Sentiment is now at its lowest point since Liberation Day. But you don’t need graphs to see that all around you, sentiment is negative. You see posts like this one everywhere.

Well, to start with, this is utter nonsense. What if I picked the bottom of the 2008-2009 crash as my starting point and showed you these returns?

Of course, you’d call me out for cherry picking the bottom, right? At least, that’s what I hope. But picking the absolute top is not a problem all of a sudden? It’s as much cherry-picking as choosing the very bottom as your starting point.

Secondly, it assumes that you invested on one single day, the very top, and poured in all the money you had. You never invested a single cent in the markets anymore. Yes, in those circumstances, you’d have to wait for 13 years. But if you invested like “normal” people do, you would probably not throw in all the money you had on a single day. If you did, you could probably use the long waiting period to learn about how to invest better, and hopefully, you have some money to average down.

But back to today. Sure, there are reasons to believe that the current environment could trigger a bear market. I don’t have to name them, I think: Iran, expensive oil and gas, potential inflation or stagflation, a private credit crunch and probably some others.

But what if we looked at the data first? This is based on 105 5% pullbacks since World War II. Only 24.8% turned into a correction (so down 10%+) and 12.4% into a bear market (down 20%+).

Source

That means that 62.5% of all 5% drops are just that, 5% drops. But investors panic each time as if there will be a huge bear market. As you can see from the stats, chances are not that big, but of course, it’s not impossible.

Never forget that things can always change quickly. As fast as the conflict started, it can stop. Sure, there will still be some residual damage, but what I mean is that nothing is set in stone. There are no anchor points that are certain and that means it could change tomorrow.

Four years ago, Warren Buffett was asked about a potential World War. This was his answer:

Well, if you tell me all of that’s going to happen, I will still be buying the stock. You’re going to invest your money in something over time. The one thing you could be quite sure of is that if we went into some very major war, the value of money would go down.

I mean, that’s happened in virtually every war that I that I’m aware of. So the last thing you’d want to do is hold money during a war. And you might want to own a farm, you might want to own an apartment house, you might want to own securities.

I mean, during World War Two, you know, the stock market advanced. The stock market advances over time. American businesses are going to be worth more money. Now, dollars are going to be worth less. So that money won’t buy you quite as much, but you’re, you’re going to be a lot better off owning productive assets over the next 50 years, then you will be owning pieces of paper.

I’m preaching against everything you hear now. I know. But don’t forget that 99% of the information on the internet and in the media comes from traders, not investors. Everyone has their reasons to talk about the short term. Brokers want you to trade, the media want you to be hooked when things go wrong, using your strong fear emotions for interaction.

And don’t forget that many influencers just want to be seen as smart. Negativity makes you seem smarter. And you can repost a post later if a bear market comes. You add something like: “You see? I told you.” If the bear market never comes, you never talk about the post again, of course. That’s how most do it online.

I want to be the antidote and I want to show you that there’s still a sun behind the current clouds and it will always return. Sure, when it returns is impossible to know, but that it will is almost certain, unless the world is devastated and then we have bigger problems.

Often, when we least expect it, the market can go up.

Maybe we have already seen the bottom? I saw this chart today.

Negativity around events is always the biggest in the first few weeks. Then it’s seen as the new reality or a temporary hiccup.

That doesn’t mean I don’t see the potential for long-term disruption from what’s going on in the world. It means that we have always pulled through.

I don’t want to downplay what we are going through. If you look at what happened in the seventies, it’s pretty scary. A 5-month oil embargo in 1973 resulted in almost a decade of stagflation. That’s definitely a risk now as well.

Sure, the US has its own oil production now but it imports a ton of things from Asia. Probably, the device you are reading on is assembled in China. They have much higher oil prices, so the product becomes more expensive, and transport costs as well. That could cause inflation to spike if the Strait of Hormuz is not opened fast.

There’s also the bull whip effect. I made this years ago and this is the normal situation.

But it also goes the other way around. Even a small disturbance in the supply side, can cause big effects for the consumer.

Natural gas is essential for fertilizer production, which is an important input for food prices, as we all experienced in 2022. Helium plays a critical role in healthcare and chip manufacturing. Ukraine was already a bottleneck for neon, a critical material for chip lithography. This adds to the supply difficulties. And think about shipping and insurance costs, and so much more. If the problem keeps lingering, it could potentially cause a big shock. The longer it takes, the bigger the impact. Of course, Iran knows this.

That’s also the reason why President Trump has set an ultimatum for Iran to open the Strait of Hormuz. We will see how that ends.

2. Tech = Cheap?

Of course, I know. Many stocks are down much more from their highs and that can be painful. Especially tech is hit hard.

For a long time, the Mag 7 has dominated the markets, but now, they are all down more than the S&P 500 and the Nasdaq.

Microsoft, usually one of the less volatile stocks, is now down 29%.

Sure, you hear about the big investments companies must make for building out data centers and other AI-related costs and that could put pressure on the margins of some. But these companies have huge piles of cash and probably, they are spending it well to make sure they will have huge piles of cash in the future as well.

Many of the things you hear are stories and they are not all based on reality. I go further and say that most are not based on reality. Remember when Google was going out of business just about a year ago? Or Meta a few years ago? Tesal has probably been proclaimed dead over a dozen times and the story around Nvidia was initially that it had no moat. Now that it has proven it has, the story is that the moat will end (so less pricing power) or growth will drop or whatever other story.

But look at this graph:

As you can see, all of them except Amazon are expected to still be profitable on an FCF basis in 2026. Be critical when you hear these stories. Often, they are just someone’s very superficial opinion stated with too much certainty.

Is tech really cheap now? I would argue that many tech stocks are. But that doesn’t mean that they can’t get any cheaper, of course.

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Sometimes, it’s good to remember what investing is about. It’s not about the daily noise. I felt inspired yesterday evening, and I wrote this short story. It may help you when you feel stupid sometimes.

A Tale Of Two Brothers

Thomas and Lucas were 26 and 24 and they were in tears. Their father had just died. But he left them something. His two sons both inherited $150,000 and some words scribbled on a legal pad paper: “Buy stocks of companies that make things you understand. Be patient.”

Thomas took the words to heart and he bought Amazon first, as he saw that his wife placed several orders per week. Over the years, he bought several more companies that he understood.

His brother Lucas had always been brighter than Thomas, excelling in school, college, and university, and he had a good job at Google.

He made $40,000 on his first trade. At Thanksgiving that year, he told Thomas that patience was stupid and that he would help him make much more money. Thomas was tempted but decided to stay the course, remembering their father’s words. Not following that advice felt like not listening to his father’s last wish.

Lucas had a gift for reading the market, or at least that’s what he thought. So, the next year, Lucas started with leverage, and he made even more money. That Thanksgiving, he told Thomas he should have listened to him because he would have doubled his money.

But then, things slowly started to turn for Lucas. A trade went wrong but he was sure he was right. He had a special gift, right? So, he doubled down. A margin call came and he sold his winners. Each decision made perfect senseto Lucas. He just knew he was right.

Then the market dropped 30% and Lucas really started panicking, seeing his portfolio lose much more than the market because of his leverage.

Thomas did not do much. When a stock fell 65%, he read the annual report and decided to add a bit to his position. For the rest, he just didn’t look at his portfolio that often.

His inaction looked stupid to his brother Lucas. He told Thomas that he would lose all his money if he didn’t buy protection. Thomas considered it but did nothing.

Skip forward to thirty years later. Thomas’ portfolio is worth over $4.5 million. Unlike his brother Lucas, he never made a single trade that would impress anyone at a cocktail party. But he could retire rich at the age of 56.

Lucas was still working. He had $139,000 left of the $150,000. After 30 years. He finally understood, much too late, that trading was designed to keep him playing, not to get rich.

Lucas had sounded smart, but his brother Thomas had compounded the money at 12% per year and that turned $150,000 to $4.5 million. He had felt superior to Thomas all that time. He followed the market much closer than his brother; he was active, and he knew things better than most other investors. If he was honest, he had been looking down on Thomas for his inaction and underperformance when things went great.

But in the end, he realized that his brother and father had been right. Patience is the secret ingredient to successful investing. Not intelligence, action or sophistication, but patience. He had sold his stocks when he should have bought.

I hope this story helps you protect yourself from the people who sound so smart and only share their successes.

Articles In The Past Weeks

This is the third article this week.

In the first one, we looked at the Global-e results.

The second one was about the most volatile stock we have ever held: Hims & Hers. You can read that article here.

Memes Of The Week

Multi Karan shared this one this week about Fintwit (FinX?). It’s funny because it’s true so many claim to be specialists in everything.

I found this one very funny.

Multi Market Sense posted this one.

If this one is true, it looks good for the market.

This shows again that you can find patterns wherever you look. But it’s not because you see them that they mean something.

Interesting Podcasts Or Books

For the third week in a row, I listened to an episode of The Intrinsic Value Podcast. This time, it was an episode about Duolingo.

The markets in the past week

As you can see, the Russell 2000 dropped the most again, with 1.79%. The S&P fell 1.6% and the Nasdaq 1.26%.

Even if it may not feel like this, the S&P 500 is not even down 5% from its all-time highs set earlier this year. The Nasdaq is down 7.34% and the Russell 20000 8.78%.

Those are very moderate drops and that can be viewed in different ways. The positive reasoning is that the indices are remarkably resilient, and that may mean something. The negative reading is that there is a lot more room to drop. You can choose your side, but whatever you prefer, your opinion won’t change how the market behaves.

The Greed & Fear Index dropped again. It was on the border of Fear and Extreme Fear last week and it dropped from Fear to Extreme Fear. Strange, with the S&P 500, on which this is based, is not even down 5% from its all-time high.

Quick Facts

1. Growth & Value Valuations

This week, Meb Faber posted this very interesting chart.

It shows that expensive stocks have become more expensive and deep value stocks have become even deeper value.

At the same time, if you look carefully, you see that expensive stocks became more expensive already in 2016. There was a reset in 2022, as we experienced, but then valuations of the most expensive stocks started to rise again. Deep Value has already become cheaper since 2010.

Of course, the way this is measured also matters. As you can see, it’s a blend of Price to Sales, Price to Gross Profit, and Price to Economic Book. I think you know I love Price-to-Gross Profit, but I’m not sure it’s really that applicable to value stocks.

Even with the caveats, this remains an interesting chart.

2. The 5% Drop In Perspective

And more about the 5% S&P 500 drop. This is a very fascinating overview from Charlie Bilello.

The message is short: this too shall pass. You can point out that there has not been a big drop since 2008-2009, but a big recession like back then only happens about twice a century or so.

During this period, there were some steeper drops. And don’t forget that this is the S&P 500. The Nasdaq dropped quite a bit more (almost?) each time.

3. Nasdaq bends the rules for SpaceX

By Kris

Multi SS linked to a very interesting article earlier today. It’s written by Keubiko, of whom I had never heard before, but the argument is convincing.

Nasdaq is trying to change the Nasdaq-100 rules to make it possible for a giant IPO like SpaceX to get into the index fast and at a rich valuation. The consequence for passive investors: they could end up buying massive amounts of stock at inflated prices while insiders get an easy exit.

As we all know, index funds have attracted trillions of dollars in investments now. Overall, that’s a good thing, but that now means indexes can move markets. And that’s what SpaceX wants. And it’s clear Nasdaq wants SpaceX, which is expected to be the biggest IPO ever, to list on the Nasdaq, not on the New York Stock Exchange. It’s even willing to bend the rules to obtain that goal.

One proposed rule would let very large IPOs enter the index after just 15 trading days. Another would let low-float stocks get index weights way of a bigger part of the total shares, not just those that can be traded.

But if there’s a tiny float and forced buying from index funds, that could cause the stock to skyrocket even before passive money gets involved. Market funds don’t buy based on a valuation but accept whatever the market gives them.

That’s how Nasdaq wants to get a better pitch to win big IPOs and the stock gets early index status, boosting the demand. Passive investors will be the victim.

The Return Of The Potential Multibaggers

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It’s Sunday again and that means time for your weekly dose of news in the Overview Of The Week!

I’ve noticed that some Multis get a bit nervous from these markets and I understand that. But the equanimity I talked about last week can really make you stand out from the crowd.

As they say, staying calm when everyone is losing their mind, you will win in the end.

As you probably know, I have a background in linguistics and literature. I have never shared a poem before, but this time, I think it’s very useful. It was written in 1910 by Rudyard Kipling and it’s a father talking to his son. But I think it’s a useful poem for investors as well.

Try to be this and be an example for others.

Articles In The Past Weeks

This is the third article this week. The two previous ones were about two stocks that dropped hard after they announced their earnings and I put a lot of effort in them. I was very happy to see that was appreciated a lot.

In the first article this week, I dove deep into Duolingo’s earnings.

The second article was also a deep dive, this time into Sea Limited’s earnings.

Memes Of The Week

Multi SkQ shared this in our meme channel:

I also liked this one.

Interesting Podcasts Or Books

Last week, I listened to the Intrinsic Value Podcast episode about Constellation Software.

In that episode, I heard they also have one about Chapters Group. I listened to it this week. You can find it here.

The latest episode is about Duolingo.

The markets in the past week

What did the market do this week? I think most of you will know that stocks generally dropped quite a bit.

As you can see, the Russell 2000 dropped the most, by a whopping 4.07%. The S&P dropped 2.02% and, surprisingly, the Nasdaq dropped the least of the three, but it was still down 1.24%.

For months, I have been saying that the market felt like 2021, when growth stocks were already down 50%, 60% or more and the indexes remained at or near their top. Is this the point of surrender for the indexes? You can’t know, of course.

The Greed & Fear Index dropped. It was already in Fear but close to Neutral. It is now close to Extreme Fear.

Quick Facts

1. Most Protection Ever

This week, I saw this chart.

This chart shows that in the last 16 years, there has never been a period with more protection bought than now.

Historically, that has been a good counterindicator. In other words, if so many investors buy puts, the market usually goes up.

On the other hand, if this were a percentage of invested capital, it would probably look a bit different.

All in all, it’s like with all data points. It could be true in the short or long term, but I wouldn’t invest much money betting on it becoming true.

2. Higher Oil: Bearish for Stocks?

The most discussed theme of the weekend was the higher oil prices.

Ben Carlson always has interesting charts. This week, I saw this one on the relationship between higher oil prices and stock market returns.

As you see, the S&P actually goes up more with higher prices.

Of course, again, there are many nuances here. Maybe the speed of the climb plays a role, the impact on inflation if it persists and so on. Still, an interesting chart.

The futures, though, look bad for tomorrow, though.

So, tomorrow could be an awful day. We’ll see. But things can always change fast.

3. Nu Holdings

This week, I found this table, which compares Nu Holdings (NU) after 5 years in Brazil and 5 years in Mexico.

This is another data point that the company keeps crushing it.

The company also announced that it would first target Brazilians in its US expansion, which is coming soon.

4. This Is Getting Crazy

With some news, I have to take a step back and think: what on earth did I just read?

Cortical Labs, a small Australian biotech, just demonstrated something that sounds like it belongs in a sci-fi movie. They grew real human brain cells on a silicon chip and got those 200,000 cells to play Doom. It played the 1993 first-person shooter where you have to navigate a 3D environment, spot enemies, and shoot them in real time.

Even crazier: a developer with no neuroscience background did it in about a week. He used Python through a cloud API. The neurons figured out basic gameplay faster than traditional machine learning algorithms. It took just minutes, not hours.

Cool demo, but so what, you might think, but the implications over the medium-long term might be big. Your entire brain runs very efficiently, much more efficiently, like 50 times or more efficiently, than the most efficient chips right now. So, this could be a huge efficiency leap once this becomes applicable at an industrial scale, if that ever happens, of course. It’s still very early.

The CIA’s venture arm, In-Q-Tel, is an investor in Cortical Labs. The first 115 units shipped in 2025. And if you don’t want to buy the hardware, you can rent access to living neurons through their Cortical Cloud platform. It’s a subscription service where you deploy code to actual brain cells from your browser. The cells are grown from adult skin and blood samples and reprogrammed into neurons.

Read that last paragraph again if you need to.

Biological computing could eventually leave traditional silicon in the dust when it comes to energy efficiency and adaptability. Neurons learn from tiny amounts of data, adapt continuously, and consume almost no power compared to GPUs.

Also, this was just 200,000 neurons. The human brain has about 86 billion. So, you see the potential.

We’re at the absolute beginning of this. And honestly, I find it both fascinating and a bit terrifying.

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