$META Mic drop moment

Why buy $PYPL when you can build a competitor for a fraction of the price

$META should NOT buy $PYPL. Acquisitions are supposed to make the core flywheel spin faster. Meta's flywheel is simple: build apps and ecosystems that billions of people enjoy using every day, then monetize the attention. Every great Meta acquisition fit that flywheel. Instagram and WhatsApp added users and engagement to the same machine. PayPal does not fit. It is a separate payments business in a separate competitive fight, and buying it would not make one more person open Instagram or message on WhatsApp. It would only hand management a second flywheel to fix while the main one needs their full attention. It would be an incredible disservice to the talent at Meta and their shareholders if they spent their time and energy trying to fix a broken flywheel. Buffett wrote in 1982 that the thrill of the chase blinded the pursuers to the consequences of the catch. Meta has the best consumer distribution on earth and a long AI runway in front of it. The winning move is focus.

$META What I appreciate most about Meta's recent success with Muse is that they never felt rushed. Ever since ChatGPT launched, every major player has raced to put something in consumers' hands, hoping first mover advantage would carry them. Meta and Zuckerberg stayed patient and focused on product quality instead. They understood it was never a race to be first to ship, it was a marathon to build something consumers love. Feels almost Steve Jobs esque.

"Show me the incentive and I'll show you the outcome." — Charlie Munger China buys more than 80 percent of Iran's seaborne crude, so when its biggest customer tells it to behave, it behaves. Brent is down 2 percent to about 102 dollars. Incentives move oil before diplomacy does.

$NFLX is starting to look really interesting here

Bold prediction: Elon either through $TSLA or $SPCX will buy OpenAI out of bankruptcy

Love to see the partnership between Costco and Uber Eats

This is from QuestMobile data in 2025.09 $JD $BABA $PDD So the average $PDD user spends around 7 hours per month, or 14 minutes per day, on the shopping app. The time spent on Chinese shopping apps is so high for three reasons: a) Buying cheap stuff itself is fun and addictive. b) Short-form videos, live shopping, and mini-games are built in. c) Users can also watch short dramas in the app, and each platform has exclusive content.

The most famous product nobody owns. WD 40 Company $WDFC You know the blue and yellow can. It sells in 176 countries, and the company behind it is worth 2.6 billion dollars, runs on about 600 employees, and is covered by a handful of analysts. The brand is universal. The stock is invisible. That gap is either an opportunity or a warning. What it does: WD 40 sells maintenance sprays. The flagship Multi Use Product is 77 percent of sales. The Specialist line of penetrants, degreasers and lubricants is smaller and growing at a double digit clip. In fiscal 2025 the company did 620 million in sales at a 55.1 percent gross margin, then sold its homecare brands to focus purely on maintenance. The core four scorecard. Returns on tangible capital: Operating income was 103.8 million. Tangible capital employed was 274.0 million, that is total assets of 475.8 million, less goodwill and intangibles of 99.6 million, less current liabilities of 102.3 million. Return on tangible capital: 37.9 percent. This is the number that matters. Margin of safety: At 194.82 a share the market cap is 2.64 billion. Net debt is only 29 million, so enterprise value is about 2.67 billion. Economic price, enterprise value plus tangible capital employed, is about 2.95 billion. Economic return, operating income of 103.8 million divided by 2.95 billion, is 3.5 percent. The business is wonderful. The price is not cheap. The margin of safety here is business quality, not price. Runway: Management benchmarks a 1.4 billion dollar sales opportunity for the flagship product alone, against current flagship sales of 478 million. Specialist grew 11 percent last year. The May quarter beat estimates by a mile, 2.33 in EPS against 1.58 expected on revenue up 24.3 percent, and management raised fiscal 2026 guidance to EPS of 6.05 to 6.35. The runway is real, but it is a grind of mid single digit growth compounded for decades. Moat: WD 40 is the generic term for the category. Nobody asks for multipurpose penetrating lubricant. The formula was never patented, it is a trade secret, so it never expires. Shelf space in every hardware store on earth is the distribution moat. A 55 percent gross margin with almost no research spending tells you customers are not price shopping. Bull case: you are buying one of the highest return on capital businesses in consumer staples at a moment when the market has lost interest. The stock is down from 299 to 195. The homecare sale leaves a cleaner, higher margin company. Management is accelerating buybacks on a share count already shrunk by nearly a third. If Specialist and emerging markets lift growth from 5 percent toward 8 or 9 percent, the multiple rerates and compounding does the rest. Bear case: 29 times earnings for 5 percent growth is a full price, and the 3.5 percent economic return says so plainly. This is a 620 million dollar company that cannot reinvest much, it is capital light by nature, so excess cash goes to dividends and buybacks and growth stays grindy. More than half of sales are outside the Americas, so currency is a permanent headwind. Wonderful business, full price, stuck in the middle. What would have to be true for this to fit into a concentrated GARP portfolio, one of two things. Either the price comes in, near 150 where the economic return moves toward 4.5 percent and you get paid to own the quality. Or growth inflects, Specialist sustains double digit growth and the May quarter beat proves to be a trend rather than timing, confirming the 8 to 9 percent top line the bull case needs. Until one of those shows up, this is a watchlist compounder, not a position. Research, not advice.

I'm bullish $UBER long term, but I've never experienced worse customer support. There's no one to call, just an AI chatbot that won't even let you type in the issue. And once you finally reach a person, they offer nothing a robot couldn't do. Usually when you contact support it's because you need a nuanced take, not someone repeating a script. As a shareholder, it's frustrating to watch them cut jobs in the one department they should be investing in. Switching costs here are tiny. Fail to help someone on a delivery issue and they'll just open DoorDash next time. Honestly embarrassing.

$UBER One Uber bull case that doesn't get talked about enough: their grip on corporate accounts. Every time I travel for work, it's Uber. Not a choice, it's policy. The company holds the contract, the expense integration, the centralized billing, the duty of care tracking. Nobody is opening a competitor's app. Consumer demand is fickle. Someone will always chase the cheaper ride. But business accounts don't churn like that. The switching costs are real: expense tooling, compliance, negotiated rates, admin controls. Ripping that out to save a dollar a ride isn't happening. Here's the part I keep coming back to. Even when AVs reshape the landscape, what incentive does a business have to leave Uber? The cars might drive themselves, but the contract, the billing, the compliance layer, it all still runs through Uber. They own the enterprise relationship, and that's the part that's hard to displace. It's stickier than anything on the consumer side, and nobody prices it in.

I just finished listening to Acquired's new episode on Disney. A fascinating case study in capital allocation. From the late nineties to around 2010, the stock went basically nowhere for a decade. The typical value investor consensus in that situation is almost always the same: just buy back shares. And sure, financial engineering can boost the stock short-term by artificially raising EPS. But it doesn't fix what's actually wrong with the business. A stock that's flat or down for ten years is telling you there are serious questions about the quality of the business. Instead of shrinking the share count, Iger realized he had to fix the broken part of the flywheel. That led to Pixar, Marvel, and Lucasfilm. Each deal looked expensive and dilutive at the time. But they fixed Disney's real problem: it had forgotten how to create valuable new IP. A Disney that bought back stock for fifteen years instead of buying Pixar and Marvel isn't "Disney with fewer shares." It's a declining animation studio with nice parks, worth a fraction of what it is today. It wasn't perfect. They'd eventually pay about $71 billion for Fox. Proof that the answer isn't just "buy anything at any price." That's why capital allocation is more art than science. Management's number one job isn't engineering the share count, it's making sure the flywheel isn't broken, and finding the moves that make it spin faster. All while maintaining strict price discipline.

"I used to think that if there was reincarnation, I wanted to come back as the President or the Pope or as a .400 baseball hitter. But now I would want to come back as the bond market. You can intimidate everybody." - James Carville

$PDD Seeing a lot of bears take shots at management because they aren’t paying dividends or buying back stock. When a firm prints mountains of free cash flow, carries zero structural liabilities, and operates on vendor-funded float, the immediate knee-jerk reaction shouldn't be a demand for immediate capital distribution. Treating a fortress balance sheet as idle dead weight completely misreads the structural realities of global e-commerce warfare. In low-margin, high-velocity retail, liquidity is not an accounting leftover; it is the ultimate operational weapon. Capital retention funds the asymmetric aggression required to outlast competitors who overextend themselves chasing quarterly optics. Subsidizing growth and maintaining aggressive pricing flexibility requires deep reserves that can absorb shocks without blinking. Anyone losing sleep over the exact timeline of a buyback or a special dividend is evaluating a compounding machine without an owners mindset. True long-term operators understand that hoarding dry powder isn't capital mismanagement, it is the ultimate margin of safety designed to ensure survival and dominance if the macroeconomic weather turns ugly.

"Someone is sitting in the shade today because someone planted a tree a long time ago." — Warren Buffett

I have been thinking a lot about the internal workings of business. It has led me down the rabbit hole of looking at what I like to call ROTCE: Return on Tangible Capital Employed. This metric gives you the best picture about how efficient a business is at producing a dollar of profit and how much capital is required to do it. But I've realized that you need to take it a step further in order to determine whether you actually want to buy a firm. You have to factor in the price you pay, which means bringing Enterprise Value into the mix. The new equation I've been using is Net Operating Profit divided by the sum of Enterprise Value and Tangible Capital Employed. This shouldn't replace looking at traditional ROTCE, because you still want to isolate the tangible capital employed to see how much excess cash can actually be distributed out of the system. But when you combine them, the magic happens. If you are able to find a high-yielding company where the standalone ROTCE is also exceptionally high, you have found the holy grail of compounders. Pair that operating model with a long runway for future reinvestment, and you are looking at an elite, long-term wealth generator.

Selling Uber over AV fears today feels like an exact carbon copy of selling Google over ChatGPT disruption a few years ago.

Following Uber’s earnings yesterday it only seems right to post this classic quote. "Be fearful when others are greedy and greedy only when others are fearful." — Warren Buffett

Love what I'm seeing from $UBER Q2 2026 earnings release. Gross Bookings expanded 24% year-over-year (22% in constant currency) to $58.0 billion, driven by 3.9 billion trips across the quarter—an average of over 42 million daily journeys connecting riders, merchants, and couriers worldwide. Rather than depending on brute-force pricing power, growth was powered by platform expansion; Monthly Active Platform Consumers reached a record 208 million (+16% YoY), while user trip frequency climbed as consumers increasingly relied on Uber for both daily transit and delivery logistics. While Mobility continues to serve as the bedrock of platform engagement, the most impressive operational milestone this quarter belongs to Delivery. The Delivery segment generated $1.06 billion in quarterly operating income (+38% YoY), officially pushing past a $4.0 billion annualized profit run-rate. Delivery is morphing into a major profit engine alongside Mobility. Looking ahead, reaching $5.0 billion in annual Delivery operating profit feels well within striking distance, especially as Uber integrates its landmark $14.8 billion acquisition of Delivery Hero. Absorbing Delivery Hero’s leading footprints across Europe, the Middle East, and Asia nearly doubles Uber’s dual-mobility and delivery markets from 34 to 58, drastically expanding the TAM for high-margin Uber One cross-pollination. In hyper-local logistics, order density is the ultimate moat—doubling market density compresses courier fulfillment costs while expanding merchant ad real estate. Wish they had provided more detail on the acquisition. I'm sure it will be discussed on the call. The overarching narrative for long-term compounders, however, lies in total operating leverage and cash conversion. Revenue rose 12% to $14.2 billion (impacted by ~8 percentage points from structural business model changes), while Adjusted EBITDA surged 33% to $2.82 billion, expanding margins to 4.9% of Gross Bookings. The headline marker is on the cash flow statement: quarterly free cash flow hit $2.79 billion, pushing trailing twelve-month free cash flow past $10 billion for the first time in company history. Combined with ongoing share repurchases, Uber is proving that its two-sided network flywheel has fully matured into a global cash-generative utility.