Incremental Insights #103
The best of what I read, listened to, and watched during the week
AI Moats and Value Traps
A low multiple is not the same as cheap when a business is being disrupted because the price has already moved but the fundamentals haven’t yet. So the current multiple is measured against earnings that are about to erode.
How Serial Acquirers Turn Into Multibaggers
Serial acquirers can be a repeatable “multibagger” model. Buy many small private businesses using strong free cash flow, improve them, and reinvest the cash into the next deal. The great ones, the multi baggers, share common traits.
Stop Buying Memory Stocks
HBM demand for AI is creating a temporary packaging/yield shortage that markets are pricing as permanent. But as packaging yields improve and $100B+ of new capacity comes online, memory’s commodity cycle returns, and today’s peak-cycle valuations can unwind fast.
Rory Johnston on Why His $200 Oil Prediction Didn’t Turn Out Right
TL;DR China.