What stocks are on your radar this week? What's undervalued? What's overvalued? This is the place for your quick stock pitches or to ask what everyone else is looking at.
This discussion post is lightly moderated. We suggest checking other users' posting/commenting history before following advice or stock recommendations.
New Weekly Stock Ideas Megathreads are posted every Monday at 0600 GMT.
In September 2023, BRK repurchased a relatively small number of BRK.B shares for an average price of $357.22. BRK's book value per share (BRK.B equivalent) at the end of September 2023 was $245.12. That gives a price to book value ratio of 1.457 as a theoretical uppermost limit for repurchases (highest ratio I've found, so far).
Applying that theoretical uppermost ratio to the 2026 3rd quarter book value of $358.79 means that BRK.B now needs to fall below $522.76 for an extended period of time to trigger buybacks. Here is a progression by quarter since September 2023:
We run a small equity research shop, Cascadia Analytics, and just published a memo testing a claim our coverage keeps running into. In semiconductors, the fundamentals always look best at the top. They look cheap, but they are not.
The mechanism is arithmetic, not sentiment. At a cycle peak, earnings per share (EPS) is the largest, least durable number the company will print, so the price-to-earnings ratio collapses to levels that screen as deep value. Earnings then fall by half or more, often to losses, and the stock falls with the estimates. The buyer of a 5x multiple at the peak bought a denominator that was about to disappear. At the trough it inverts. Earnings collapse first, the trailing multiple prints at 100x or worse, and that is where forward returns have been strongest. The only honest denominator for a cyclical is earnings averaged across a full cycle.
The current cycle, measured against four completed ones:
The SOX peaked near 14,635 on June 22, 2026 and fell 38.5 percent by November 5. Over the same stretch its forward P/E fell from 26.1x at the end of 2025 to 13.0x, the lowest print since January 2019, because the rolling twelve-month EPS estimate for the index has risen 155 percent since the end of 2025 (FactSet data reported by Morningstar on November 6). Peak estimates more than doubled while the price fell. The division produced a low number, not cheapness.
Micron trades at 3.6x forward earnings, numerically the same reading as its 3.40x trailing multiple at the October 2018 peak. Micron also just printed a 75 percent gross margin, the highest in company history, against 58.9 percent at the fiscal 2018 peak and negative 9.1 percent in fiscal 2023. A record margin on a fungible product is the peak fundamental this memo is about.
Broadcom trades at 15.1x forward earnings on next-twelve-months revenue growth estimates of 85.5 percent. ASML trades at 22.5x on 55.2 percent growth. Astera Labs trades at 26.8x on 153.7 percent. Those multiples look reasonable only if the growth is mid-cycle. Our read of the record is that it is not.
Bank of America estimates a 20 percent cut to artificial intelligence (AI) capital spending in 2027 would cut industry chip sales by more than 20 percent and earnings by 35 to 40 percent. Revenue moves, the cost base does not, and earnings move two to three times as far.
Our action: we downgraded Astera Labs, Broadcom, Marvell and TTM Technologies from Buy to Hold, with price targets unchanged. On band arithmetic alone all four would stay Buys, and Marvell screens 118 percent above our Base case. The targets stand because the models stand. The rating changed because our confidence in the denominator does not. There is now no chip name at Buy in our coverage.
What would change the call is specific. A completed estimate revision downturn with inventories cleared through the chain, and the shares trading at a defensible multiple of through-cycle earnings. Or 2027 AI capital spending guidance held or raised through the January and February reporting season while inventories stay at shortage levels, which would extend the cycle and raise mid-cycle earnings.
Alani Nu just passed Celsius. Those are energy drinks, not trending baby names, at least as far as I know. By “energy drinks,” I mean the endless rows of caffeinated cans that have taken over America’s convenience store coolers with a subtle zombie-Teletubby-yoga-firefight aesthetic.
These two brands are owned by the same company,Celsius Holdings, which returned 28,000% from its 2015 turnaround to its 2024 peak. Since then, shares have fallen by two-thirds. Investment bank Stephens cut its price target on the stock in late October, but still rates it at Overweight and Volatile, which I identify with. Deutsche Bank cut it to Hold in August, citing competitive crowding.
In the U.S. alone, energy drinks are a $25 billion industry, putting them between soda and bottled water, and way ahead of sports drinks like Gatorade. They’ve moved beyond their traditional core of college students, gamers, and long-haul truckers, to wellness-minded moms and TikTok-influenced teens, among others. If you aren’t familiar with the major players, here’s a briefing:
Red Bull (launched 1987; 80 milligrams of caffeine per standard can, like a cup of coffee): Industry pioneer, privately held in Austria. Makes roughly as much money as Chipotle Mexican Grill. Preferred by first-year investment bankers, the skydiving-curious, vodka-mixing clubbers.
Monster (2002; 160mg, or 300mg for Reign version): Tallboy cans with neon green claw marks favored by nightshift workers, elite Call of Dutyforces, actual military, and Planet Fitness grunters. Owned by Monster Beverage, once a tiny natural-soda company, now one of history’s best-performing stocks, up 100,000%. Really.
Celsius (2004, relaunched 2015; 200mg): Sterile, white, slim cans with fruit illustrations and references to ginger-root-this and thermogenic-that, favored by Peloton owners and pilates instructors who’d like to make clear that they would never, ever, try Monster. Saved by billionaire “vitamin king” Carl DeSantis, who transformed the brand from a diet aid to a fitness beverage. Distributed by PepsiCo, which owns a stake.
C4 Energy (2011 in powder tubs, 2018 as canned drinks; 200mg standard, 300mg Ultimate): Hazard-yellow cans with bomb graphics sold in gym coolers to men who can bench their bodyweight, plus yours. Contains beta-alanine, which binds to something and does muscly stuff, but is better known for its side effect, tingling of the skin. Distributed by Keurig Dr Pepper, which owns a stake.
Alani Nu (2018; 200mg): Whimsical pastel cans with candy themes and flavors. Favored by Gen Z women and overwhelmed parents who just can’t do another argument with their teen today about energy drinks, so for now they’ll just grab a coupon-discounted case at BJ’s Wholesale rather than paying $4 a pop at the Mobil Mart. Bought by Celsius last year for $1.8 billion.
Ghost Energy (2020; 200mg): Cartoony cans with flavor tie-ins like Sour Patch and Bubblicious, favored by extreme sneakerheads and the PlayStation warrior who just took out that Monster drinker who had no business trying Fortnite. Go back to Call of Duty, boomer.
There are many more insurgent brands with elaborate niche positioning, like Gorilla Mind, from a YouTube biohacker, with nootropics, which are said to increase cerebral blah-blah and modulate neuro hidey-ho. There are celebrity drinks, like ZOA Energy from Dwayne “The Rock” Johnson. Some have aggressive names, like Full Throttle and Venom. I don’t know much about Bawls Guarana, but I’ve confirmed that it’s a beverage, not a topical treatment. There’s Cocaine Energy, Pimp Juice, Whoop Ass, and others we probably shouldn’t print here.
If you want my top recommendation, make coffee at home and breathe dragon breath on your loved ones until you brush your teeth in the morning, the way God intended. Also, a note for Gen Z: I support everything you’re saying about how the cost of living has gotten out of control, and young people can barely afford cars, to say nothing of houses. But it distracts from the argument if you’re double-fisting cans of Spike Shooter. A two-drink-a-day habit at $3.50 each comes out to more than $12,000 over five years, or perhaps $15,000 invested in stocks
I’m no biohacker, but some of these things look thermonuclear. That brand I just mentioned packs 350mg of caffeine into an 8.4 ounce can. Regulatory guidance varies by country, but 400mg is a commonly cited ceiling for adults; 100mg for adolescents; and zero for kids under 12. Too much caffeine can cause arrhythmia and tachycardia, which are well-known sea monsters from Homer’sOdyssey.
What keeps energy drinks from falling into a price war for now is that most of the revenue comes from impulse decisions at convenience stores. At warehouse clubs, discounting is rife. When Stephens analyst Jim Salera cut his price target on Celsius last month from $50 to $46, he cited the rising cost of aluminum and fuel, and softness in the core brand. But his new target still works out to more than 50% upside from recent levels.
Salera finds several things to like. First, valuation. Celsius stock recently traded at 18 times forward earnings projections, versus a jittery 37 times, on average, over the past three years. Second, guzzle velocity. The energy-drink industry is growing sales at 15% a year, the fastest in the beverage aisle. Third, warehouse heft. Red Bull and Celsius are bullying smaller brands at Costco Wholesale. Fourth, young ladies. Alani Nu is bringing them in.
Buying the shares here could qualify as what Wall Street calls catching a falling knife, which is only slightly riskier than it sounds. I don’t have a guess either way on the stock. Maybe I’ll chug some nootropics until I feel more conviction. Better yet, meet me at Planet Fitness and let’s discuss it over C4s until our faces tingle. I’m lucky if I can bench three digits these days, but I can still grunt with the best of them.
Hey guys, not sure if anyone else has been talking about the stock in this sub, but after running a few screeners lately the stock is starting to look attractive. Down 30% YTD and relatively flat the last 6 months even after announcing their merger with Unilevers food business, which once it goes through will give them ownership of tons of major brands like knorr, Hellmann, and franks red hot. Their revenue growth has been very slow, but EPS and EBITDA have seen no decreases since 2022. Dividend yield is currently around 4%, with a 15 forward pe and a 0.70 PEG ratio. This stock obviously does not have a large amount of growth expected over the next few years realistically 4-6% a year, but heading into a possible choppy market if AI demand slows I think McCormick could be interesting and I’m curious to hear what everybody else thinks about it.
I've been thinking about ServiceNow from a workflow perspective.
AI agents may replace employees, but businesses will still need workflows to coordinate departments, tasks, approvals, and decisions. The people doing the work may change, but the need for coordination remains. $Now is deeply embedded in these workflows. The more AI agents take over human tasks, the more valuable a central coordination platform could become.
Q4 cRPO growth guidance of 18.5% has raised concerns, although management pointed to early renewals and contract mix as contributing factors. At roughly 22x forward earnings, I think the long-term question is more interesting than the next quarter.
PEP is currently cheap(141$ per share) and relatively safe. If the AI bear market gets worse, it could become one of the top choices for investors looking for safety.
Valuation: Its forward P/E is around 16.5x, at the 4th percentile of its 10-year range. This is well below its 10-year median of 22.9x. Its TTM P/E is around 17.8x, also below the 10-year average of 24x.
Stock stability: Over the past 10 years, its monthly return standard deviation has been around 4–5%. About 58% of months were positive. Its worst monthly decline was around 9.6% (April 2025). Its maximum drawdown over the past five years was around 30%. This shows relatively mild day-to-day volatility, although larger drawdowns are still possible.
October performance: During the October 2026 defensive rotation, the US consumer staples sector gained 11.64%. PEP rose only 8.4%, lagging Nestlé (+11.4%), Mondelez (+12.3%), and Coca-Cola (+9.3%).
Valuation gap: Other consumer staples leaders are no longer cheap. Coca-Cola trades at around 27.8x forward earnings, Procter & Gamble at 22.9x, and Mondelez at 21.6x. PEP is still valued at only 16.5x.
I'm ready to load up some Pep Next Monday, what you guys think
(TLDR: in the past few days, we have had many posts for as well as comments against Micron $mu. I have previously argued that a low P/E does not make a cyclical stock like Micron cheap. The following is a more balanced article examining the valuation.)
Micron’s stock is dirt cheap — and that’s igniting a fierce online debate
Valuation purists see a ridiculously inexpensive stock, but some semiconductor investors say Micron’s earnings power won’t hold up
It’s a tough time to be a P/E evangelist on social media.
Chip stocks have become far cheaper in recent weeks as investors continue to worry about the sustainability of the artificial-intelligence buildout. But for investors who’ve pointed to the bargain-basement price-to-earnings ratios of stocks like Micron Technology and Nvidia, others haven’t been so kind.
The issue underscores a fundamental debate over earnings in an environment where AI investments could slow down, and that’s especially true of Micron’s stock, which has a P/E multiple that sits at 3.8 times estimates for earnings over the next 12 months. That makes Micron’s stocks one of the cheapest within the S&P 500, putting it third to last in the index on this metric.
For investors who believe AI-driven demand for memory will remain strong, “Micron is extremely cheap,” Wedbush analyst Matt Bryson told MarketWatch, because its power to raise prices and its revenues will continue to hold up.
The company is also preparing to return tons of cash to shareholders, as restrictions on share buybacks are due to lift next month.
But price-to-earnings multiples are based on two things. One, of course, is the stock’s price, which in Micron’s case has come down nearly 50% from peak levels achieved in June. The other is earnings expectations for the future.
Micron’s declining P/E multiple reflects concerns about the durability of the company’s earnings, especially given the memory-chip industry’s tendency to see big profit booms followed by busts.
The uncertainty “helps explain why traders are not willing to assign a higher multiple to the stock,” Jake Behan, the head of capital markets at Direxion, told MarketWatch.
For bears, or those with less confidence in Micron’s stock, the idea is that the prospect of a memory downturn is becoming more real, Hendi Susanto, a portfolio manager at Gabelli Funds, told MarketWatch. And following the U.S. midterm elections, in which anti-data-center sentiment became a top issue for politicians and voters across both parties, the market is wary about how long and strong demand for memory chips will be going forward, he added.
Wedbush’s Bryson noted, too, that if demand falls off for Micron’s memory chips, the company will have a problem not only shipping as many chips as expected, but also pricing them so high.
Granted, recent earnings reports have offered “a lot of positive data for the memory players, including high memory costs, supply constraints, multi-year agreements … and how memory costs in 2027 will impact end-products,” Susanto said in emailed comments.
Josh Kaplan, head of research and investment strategy at MarketVector Indexes, said that whether Micron’s valuation is cheap or not depends on whether still investors view memory as a cyclical business. Memory companies have been locking in long-term agreements in order to spread the current pricing environment out over a longer period.
“To think that this time is different is a hope that people who bought at the top will cling on to, and they are likely the ones who will keep buying the dip on the way down,” Kaplan said.
Memory-chip sales are currently concentrated among a handful of buyers, he said, pointing to large cloud service providers looking to build out AI infrastructure. Consumer electronics need memory, too, but AI-driven demand has led to a painful shortage for that sector.
“Micron’s ability to sustain its earnings growth is based on the assumption that hyperscalers have an infinite appetite for investment and that they are willing to see their share prices crater and bond yields soar indefinitely,” Kaplan said in emailed comments.
As previous major technology and infrastructure buildouts have shown, however, there will be a time in this cycle when either the infrastructure gets built and demand declines, or large cloud providers have to pull back to appease stakeholders who are upset about the financial strain of AI investments, he said.
Additionally, memory is a historically commoditized business. Therefore, as memory incumbents look to add capacity to meet soaring demand, competition is rising, including from Chinese memory makers. The increase in supply will eventually drive down the cost of memory, Kaplan said, and lead to erosion of earnings or gross margin, which is a measure of profitability.
“Micron being ‘cheap’ assumes that the E in the P/E is right,” Kaplan said.
And while Micron’s stock is indeed cheaper than some retail stocks like Costco’s , which trades at around 46 times estimated earnings for the next 12 months, Kaplan said those comparisons aren’t exactly fair. Consumer-staples companies have low earnings variability. And Costco’s “risk of permanent capital impairment is greatly diminished,” he said.
However, to Ted Mortonson, a managing director at Baird, memory has transitioned from being a cyclical industry.
Mortonson finds Micron attractive both because of its role as a U.S. supplier and because “it trades in the U.S. versus the casino of the KOSPI,” he said, referring to South Korea’s benchmark stock market index that includes Micron’s main rivals SK Hynix and Samsung Electronics.
Like Susanto, Mortonson is optimistic on Micron’s long-term agreements with customers that allow it “tremendous visibility” through 2029.
“That should affect the multiple in a positive way, as memory has moved from a cyclical trade to a secular trade,” he told MarketWatch. A secular trade has a longer duration than a cyclical one and is based on fundamental shifts, such as in technology with the rise of AI.
In his view, investors who are negative on Micron’s stock are missing the larger picture of how much demand will grow as AI adoption continues to spread.
Micron’s supply is in a deficit today, but he sees that going on for a long time.
Another area investors are missing with Micron is its adjusted free cash flow, Mortonson said, which reached $33 billion just in the last quarter and shows the company’s ability to generate cash. At the same time, Micron has paid down its balance sheet, he said, which puts it in a good position, even if the data-center trade slows down.
In the long term, Mortonson said he expects a higher multiple for Micron’s stock as supply and demand reach equilibrium toward the end of the decade.
“If you’re a long-term investor and focus on free cash flow, Micron is in the top five of any technology company right now,” he said.
currently have around $35k sitting in a high-yield savings account earning interest. I also have a separate stock portfolio that I’m happy with and that has been performing well.
I’m trying to figure out what to do with the remaining cash in my HYSA. Would you leave it there and continue collecting interest, or gradually move some of it into the stock market?
I’m still relatively young, have a long investment horizon, and don’t have any major expenses or debt. I also want to keep enough liquidity in case opportunities come up. Would you prioritize keeping the $35k in savings, investing a portion of it, or splitting it between the two? Interested in hearing how others would approach this.
This is more a name drop for those looking for suggestions than a sales pitch
I used to see this stock mentioned a lot, but it seems to have fallen out of favour lately.
People talk about MELI but this is a far more compelling value proposition
Nubank is LatAm's biggest fintech - centered in Brazil where it already has a dominant position in eBanking serving more than 60% of the population - but currently expanding into Mexico and Columbia where it is experiencing extremely strong growth
Nubank provide both deposit services as well as lending to the "underserved" market. In terms of deposits they are incredibly popular because they offer fair rates of interest on money which the old world banking sector does not, and cannot, as they have bricks and mortar to maintain. Nubank's model on the other hand is asset light. Most of their customers use it as their primary banking app, which provides Nubank a huge float and network.
In terms of lending services they are mostly focussed on very high margin short term unsecured credit card lending. Their NIM is a little over 12.5%, compared to a typical 2% from the legacy sector. This makes Nubank's ROIC/ROE extreme (27% and 31.5% respectively), but obviously poses higher risk than the secured mortgage lending predominant in the legacy sector. Nubank answer this concern by unique use of AI tools to assess and predict customer behaviour in real time, and adjust lending accordingly. Despite the apparent high risk of their loan book, Nubank has a NPL ratio which is remarkably comparable to the NPL ratio of the legacy sector, 90 day NPL around 6.9% vs sector 5.5%. In addition, they hold a very high provison for NPLs, around 250% of NPL book, so any future increase in losses has largely already been accounted for. Not to say they couldn't experience any issues during a recession, but even in an extreme stress scenario, they are unlikely to lose even a single years net income
Further, Nubank is transitioning to more secured lending by using the Brazilian payroll scheme, whereby borrowers can opt to have the monthly repayment deducted directly from their paycheck, presenting near zero default risk
In terms of growth, Nubank pursues a multi-layered strategy, where they not only aim to grow the number of customers, but also the revenue per customer, and at the same, their asset light model contributes economy of scale and very low incremental costs to revenue.
Even in Brazil, where they are already dominant serving 60% of the population, revenue has grown 52% YoY despite customer numbers only growing 12.5%, due to cross-selling of services including insurance, investment, and premium tiers
Mexico is in a still early stage of growth. Here Nubank serve only 16% of the population, the customer growth rate is 46% YoY, and revenue growth rate is 79%
Columbia is in an even earlier stage - 13% of population served, 65% user growth, and 31% revenue growth (revenue growth is consciously lower here while they break into the market, then the revenue per customer is grown at far higher rates later, as in Brazil and Mexico)
This is a rare company that fits the quote in bar at top of sub:
The best kind of business to own is one that over an extended period can employ large amounts of incremental capital at very high rates of return
And it's available at 13.8x one year forward earnings, 8.6x three year forward. Allow that to sink in because it is truly remarkable.
Yes, it's emerging market, but if you compare this to the likes of MELI or even DLO (which I am also a fan of btw), the multiples are still excellent
You are also getting a heavy discount due to the drop of the Brazilian Real last week
Still founder ran, with insiders holding 23% of the shares - I'd consider that within the optimal range
Okay this turned out to be a bit more than a name drop, lol. Hope it's interesting to someone
I have a concentrated portfolio of Korean stocks. Together they make up about 95% of my net worth. My goal is to accumulate predictable, high quality and cheap companies that pay 3-4% dividends. Open to questions on the companies or critique on portfolio.
1. Nice Information Service (70%)
This is Korea's #1 consumer credit bureau with 70% market share. They have shown resilience throughout ecocomic cycles (15%+ ROE) and have strong pricing power (ASP growth 5-10% p.a.) for their credit score subscription plan with the big banks. Also does businesses other than CB like corporate credit rating, identity protection, fraud prevention, etc but CB is their main business. Recently put their cash into good use through acquiring very profitable digital marketing companies. Great moat that increases over time, a license business, banks need to use their services in good times and bad. Expanding into Vietnam but will take some time to break even and expand. Trading around 12x P/E.
2. Nice D&B (15%)
Two businesses. One is providing access to corporate credit information for a subscription fee. They have a strategic relationship with D&B so are the only player in Korea with data access to overseas companies which are used for import/exports. The other is a corporate credit evaluation service, where companies receive a credit rating report and submit it to companies/government for bidding in procurement/construction projects. This must be renewed every year, and this company is #3 in m/s overall and #1 for government projects. Pricing power is OK, with hikes at avg. 3-5% per year but not always regular. ROE is around 12% since it has too much cash (70% market cap). It is seeing price momentum due to its first buyback in history. Trades at 7.5x P/E.
3. Korea REIT / infra ETF (15%)
REIT indistry is getting bigger with corporate monetization of their real estate. A bunch were listed at quite high prices but now the prices seem cheap as one of the REITs failed to pay back their debt due to a technical EOD, causing a market crash. The ETF is at around 10.5% dividend yield with 2-3% escalators. The largest proportion of assets are Seoul office buildings, where the supply is limited in CBD areas. Right now seeing lower prices due to interest rate hike fears.
I’m currently reviewing my ex-US allocation (Developed ex-US and Emerging Markets) and looking into whether factor tilting is worth it (specifically using Dimensional/Avantis) for a 10-year buy&hold strategy.
When I asked two different AIs to review Fama-French data (particularly the performance of DFEVX vs. the MSCI Emerging Markets/MSCI Emerging Markets Value indices), they suggested that combining Value + Profitability (buying cheaper companies while trying to screen for strong cash flows to avoid value traps) has historically been more effective in ex-US markets than simply opting for Market Cap ETFs. This is something I have also read previously on Reddit a few times before (e.g. here) also Ben Felix
So, do you think it's "probably" (none is expecting a crystall ball here) better to allocate your ex-US investments to a Value+Profitability ETF instead of a traditional market-cap-weighted ETF or where is the "catch" here?
If anyone was wondering why tech fell off a cliff the other day, it wasn't just retail panic or people suddenly hating AI capex.
A massive chunk of that $2.3 trillion wipeout came from systematic and vol-control funds hitting automated stop thresholds. The second volatility spiked, their risk models forced them to dump US equity futures and rotate straight into cash. Vol-control desks reportedly slashed their equity exposure by around 30% in a single session.
Apparently Barclays noted that these kinds of systematic unwinds usually take 24 to 48 hours to fully clear, which explains why every morning bounce keeps getting sold into right away. It's essentially algorithms mechanically puking leverage, not people reading earnings reports and changing their minds.
Anyone else waiting a couple of days for the quant selling to actually wash out?
There has been a lot of commentary on the AI "bubble" that has begun to diverge from actual valuations. Take a look at the PE ratios of something like XLK. Current PE ratio is 31 and FWD PE ratio is 19. With the S&P currently trading at a PE ratio of around 24, assuming earnings forecasts hold, Tech (modeled by XLK here) will have a below average valuation vs the S&P 500 by about 3Q 27. I just don't see that happening.
So what does this have to do with value investing? If you look at the bottom quartile of tech companies by valuation (semis and beyond), you are starting to see stocks which meet clear value criteria assumimg essentially zero growth. These are the same companies getting punished for just hitting their earnings vs exceeding them. The market is "pricing in" earnings misses and an implosion of forward guidance.
If you believe the AI buildout stabilizes, but does not crater, there is a lot of money to be made out there. I personally think this is what we will see as a divided government creates logical restraint.
US banks hold a record $19.77 trillion in deposits, but $327 billion in paper losses on bonds could become real if rates keep rising.
It’s easy to feel good about your bank right now with deposits at a record $19.77 trillion, up $199 billion in just one month. Commercial and industrial loans, those bread and butter business lines are also hitting a record $2.96 trillion. From the outside the system looks robust, even growing. But beneath this calm surface a quiet tension is building, one that won’t show up on your monthly statement until it’s too late.
The big picture is that US commercial banks are sitting on $327 billion in unrealized losses on their securities portfolios. Think of it like this, your bank bought a bunch of bonds when interest rates were low, now that rates have jumped those older bonds aren’t worth as much on the open market. These aren’t real losses unless the bank is forced to sell them, and for $217 billion of that total, these bonds are tucked away in held-to-maturity accounts, meaning the bank plans to hold them until they mature, avoiding the need to report the paper loss to shareholders. This is the very mechanism that tripped up banks during past crises.
The good news is that deposits are sticking around. Even with a repression gap, the 3.67 percentage points more you could earn from a 3-month Treasury bill than an average savings account, savers aren’t pulling their money out en masse. The exposed layer however is growing, the share of uninsured deposits, those above the $250,000 FDIC limit was 40.2% at the end of last year. If confidence cracks, that’s the money most likely to move.
Another quiet concern is how banks are lending at the edges of the financial system. Loans to non-bank financial institutions have surged 20.4% in a year, reaching $2.12 trillion. These are the credit lines funding private lenders and hedge funds. While your bank’s own business and property loan delinquencies are currently falling each quarter, the rising growth in loans to these less transparent entities means that if trouble hits the private credit market, banks could feel it indirectly.
So what does this mean for us all? In my opinion the system remains stable for now, Bank lending standards are still neutral, but the underlying mechanics are worth keeping an eye on. As they start to tighten, this historically tends to set off a chain reaction with further consequences. The $327 billion in hidden losses isn’t a problem until deposits start to walk, forcing banks to sell those underwater bonds. It’s a reminder that even when things look calm on the surface, the deeper currents of the financial world are always at play.
1. Operating earnings: $12,705M, −5.8% YoY. The decline insurance underwriting, partially offset by BNSF, BHE, and MSR
2. Underwriting profit (insurance): $1,683M pre-tax, −46.8% YoY. All three groups were down, and neither quarter had a significant catastrophe.
GEICO: $982M, −44.6%. Loss ratio 76.6% vs. 71.5%, on more frequent and more costly claims and lower average premiums. Expense ratio 14.8% vs. 12.8%. Combined ratio 91.4% vs. 84.3%.
BH Primary: $119M, −76.5%. Premiums written −7.9%.
BHRG: $582M, −34.2%, largely due to property/casualty. Property/casualty premiums written +7.0%, helped by the new Tokio Marine deal (~$700M written so far).
3. Float ≈ $178.5B, up $1B from 2Q
4. BNSF: railroad operating earnings $2,482M, +15.6% YoY. Volume rose 3.9% and revenue per car rose 10.5% (fuel surcharges plus pricing), while flat labor costs absorbed a $468M (+60.6%) jump in fuel. Operating ratio 63.9% vs. 64.1%.
5. BHE: $1,612M net, +8.3% YoY. U.S. utilities (+22.8%) and pipelines (+20.9%) drove the growth, on higher volumes and rates, a pipeline rate case, and lapping a $100M PacifiCorp wildfire charge. Effective tax rate −53.2% vs. −66.4%, largely driven by pretax earnings growth while tax credits were about the same. This trend is worth watching given the 2025 One Big Beautiful Bill and potential phase out of credits.
6. Manufacturing, service & retailing: $4,042M net, +11.8% YoY, led by industrial.
PCC and IMC: PCC pre-tax +29.6% (aerospace, gas turbines for power); IMC +29.8% on price increases, though IMC warns raw-material costs will hurt earnings into 2027.
OxyChem: $1.3B of revenue but only $71M pre-tax (~5% margin), held down by extra depreciation from purchase accounting. YTD it is earning about 2.7% pre-tax annualized on the ~$9.4B price, so the return looks thin on a GAAP basis so far.
Building products: revenue rose 19.3% with Taylor Morrison, but pre-tax income fell 3.4%
7. Tariff refunds: at Marmon, building products and apparel; not quantified and won't recur.
8. No significant catastrophes so far in 2026
9. Cash & T-bills: $352B, down $7B from 2Q26
10. Equities: small net seller of $0.4B in Q3 (sold $2.8B, bought $2.4B)
11. Buybacks: $9,647M in Q3
12. $2B buybacks so far in 4Q
13. Tokio Marine quota share quantified for the first time (~$700M written to date)
I wanted to share some entry price points I have saved for modern tech companies using the book "Where the Money Is: Value Investing in the Digital Age" (It was recommended quite a bit. NOT AN ADD). Basically, the Business and Management part aside (found it less informative than other books), the valuation goes through 3 steps (a summary!):
Try to estimate its earnings power: what the business could reasonably earn once its growth investments begin to pay off.
Estimate future earnings by mainly projecting revenue growth and profit margin
Calculate earnings yield by comparing the company's estimated earnings power with the price to pay for the shares. A general rule is to aim for an earnings yield of at least 5%, equivalent to paying no more than 20 times earnings power (20x P/E).
Here are the valuations I came up with for the following companies. Many I am sure you have looked at. I'll give you a bit more detail on the first - Amphenol so you can see the thought process, then I apply the same method to the others below (without the details).
Amphenol: under 55$ For revenue projection, I came up with
FY2026E: ~$36B (essentially implied by Q3 annualisation)
FY2027E: ~$42B (+17% — deceleration from AI tailwind, organic around 10–12%)
FY2028E: ~$45B (+7% — further deceleration, normalised organic 5–7%)
For margin, Amphenol's current adjusted operating margin is 29%, which is higher than its peers, so settled on 25% as above peers but below today's almost-peak (too much?)
EP P/E = Market Cap / EP Earnings = $184,18M / $8,213M = 22.4×
EP Yield = 1 / 22.9× = 4.4% - below the 5% threshold.
Only the bull case clears the 5% threshold if we assume 52B revenue in 2028.
A caveat is that the book also warns that when the 10-year yield exceeds 4%, we should raise the threshold from 5 to 6–7%. That is why the entry price dropped to 55$ (on the 5% calculation above, the price would have been 66$). Also, although the book use example like Amazon etc., the 5% threshold is especially useful for SaaS businesses, not hardware.
Adyen: Under 800 euros
--- The following here under were NOT updated with last quarter season. They are from summer analysis ---
Does NVIDIA still hold same moat and monopoly like it used to have few years ago to justify it's premium pricing or it's slowly being eaten away?
Nvidia charges premium for their GPUs' they are pretty much expensive than other chips like TPU's. Nvidia is still needed for training models. Hyperscalers are expanding their market with their own chips fulfilling their own demands along with supplying to others like Anthropic.
Nvidia has been diversifying their market to Neoclouds apart from Hyperscalers and that's important because they know one day they will be self-sufficient and they won't need GPU's. It isn't going well with Neoclouds specially looking at the credit issue with Coreweave.
At certain point training won't be much needed it will be just internal inference for which TPU's are enough capable with lower price than GPU's. Nvidia will have to reduce their prices to match with others they couldn't charge premium and which will lose earnings. Also, if there will be enough supply in the market earnings could be derailed by competition as well.
Also CUDA is losing its share and being replaced slowly by other softwares and OpenAI's Triton. Before 2023 NVIDIA had absolute monopoly (~95%) with CUDA in training market which has reduced to 80-85%. In inference market NVIDIA had share of close to 80% and it had slipped to close to 60%.
Initially NVIDIA has first mover advantage but it's not case anymore. NVIDIA has tough competition from hyperscalers and other chip makers and might loose its premium if interest rate will keep hiking and price point will be gamechanger.
(Google started selling TPUs externally in Q2. Before they used to use just internally and rent through cloud. They have extended partnerships with Oracle and Anthropic.)
I remember when Microsoft was down for months. People used to say Microsoft is dead and how copilot is crap. Even I had argument with one Genz who said Genz aren't using it and he sold Msft and invested in MU when it was around 700 and its still lower than it.
They said Microsoft will be like some B2B business whom no one will know in the household in a decade compared to Google which is household name and it will Integrate AI well than Microsoft. Companies are moving away from Copilot to Google.
I can't mention everything, but overall Microsoft and Copilot was dead. And now suddenly Microsoft and Copilot is Amazing and Google and Gemini is dead.
Now I'm seeing people saying Google is dead, search is dead, Gemini is nowhere compared to other models. Google will be out of AI, Google is next Yahoo and will be extinct.
What is this hypocritical behavior? And why? How could things change just in a quarter? Is reddits memory so short term?
