6 Quick Thoughts on the Market

  • Software isn’t dying, but the sentiment driving is fundamentally interesting. When you see cost structures changing, it should raise all kinds of red flags. If developers are the main cost of software, then it is worth thinking though further. I think the “software is dying” arguments start to fall apart when you start to break down the software business model. Software has a high fixed cost… then an extremely low variable cost. If developer costs trend significantly lower… variable costs don’t change. Watch out for the high variable cost businesses… not the low ones!
  • Brands aren’t dead either. Somewhere in Lulu, Starbucks and Match Group… you have a screaming buy. Have fun figuring out which one.
  • NVIDIA is in a bubble… but not the kind of bubble we are used to. Their valuation isn’t entirely insane. Its forward multiple is similar to Apple. It isn’t a valuation bubble, it’s an earnings bubble.
  • Crypto is still bullish, but not because of Trump claiming to support crypto. I still have most of my wealth (but not cost basis) in crypto. Whoever wins the presidential election won’t make a major change in crypto continuing its run.
  • It’s wild we are 4+ years from the GameStop saga and we are still wildly swinging the stock. Time has changed but investing meme culture hasn’t.
  • I’ve written about Celsius in the past and got a bunch of shit… people hate bears. In my last post, I said to wait until the catalysts changed on a cult stock. Celsius trades at 13x sales and it seems like sentiment is turning. Last quarter was meh and tracking data isn’t great. International is a long way off before making a dent. The degenerate in me says now is the time to strike.

Author: fatbabyfunds