[Topic]: If you truly love stocks, or people pursuing their dream, then I hope you find today’s stories enjoyable! With a great opportunity at the end.

Getting Serious About Stocks

It’s now been 37 weeks since I started sending out a newsletter every week, I promised myself 52 in a row, and I’m now only 14 away.

So let’s make these the best 14.

The reason I started this practice was simple: bring back a weekly responsibility to my life. It was extremely healthy to have a weekly cadence of responsibilities that I had to keep up with every Weds while running The Spatial Collective.

So for today I’m going to take you back to November 2025: the day I opened myself up to the idea that I would start a weekly newsletter in 2026, and potentially launch a hedge fund.

The below event are how it went down just one month after I shut down Spatial Collective and started wandering lost in the woods, and one month before I put myself in motion.

Behind The Scenes of Why I Started Writing This Weekly:

Almost exactly 1 year ago, I drove to Miami so I could spend the day brainstorming what I wanted to do with my life, here’s where I sat:

That photo above is from my phone, I took it November 21st, 2025.

I know because I went through the trouble of driving 2 hours just for the impact on my brain of switching environments, and sitting there all day with a pen, pad, and Grok (I’ve since switched back to GPT, but thank you Grok for the incredible brainstorming).

The purpose of my trip was to figure out what I could spend the next few decades dedicating myself to.

I only had a moment like this once before in my life…

Virtual Reality in 2015, in College

The last ‘aha’ moment where I found something I could spend decades learning and leading was in 2015, in my college room.

I worked ruthlessly at networking, learning, hosting, connecting, and investing in the industry.

That journey took me across the world (literally, SLUSH was kind enough to fly us out in 2016 to their Iceland Play conference, what an epic time traveling with Tommy and Becky!!!!!! <3), and of course London - the city that forever has my heart.

VR Never Found a Daily Use in my Life

But it is no secret, VR and AR never found a daily use in my life.

I tried to use it daily, but between it messing up my hair, or the battery dying in the left controller… things just were not smooth.

I gave up. I felt I gave it my all for a decade, and just like so many VR pioneers warned me back in 2015, ‘it’s always 10 years away.’

With that sad acceptance, I had to figure out what to do with a VR/AR community that I loved deeply, and was paying my bills.

I tried pivoting us towards where the future was headed, AI. But it resulted more in flailing than success.

I tried tons of programs, I threw stuff at the wall, I embarrassed myself and risked everything we had built in order to keep it alive. I knew it couldn’t continue as XR.

All the while, as this is happening, I started making more money than I had ever made (on paper…) from ETH during that last crypto summer.

Combine that with a love for stocks since as far back as I have memories, and it seemed like investing could be a great potential fit.

November 2025: Taking Us Back to Canal Side in Miami

All that above text, was a long way of saying I was lost with no direction on the day I took this photo (ok so now we teleport back here):

I built out a very complex matrix of happiness x income x passion on the notepad, and spent hours trying to fit business ideas into it.

I kept coming back to some version of an investment fund, but that sounded crazy at the time.

A few people changed my thinking; Dad, Mom, and Larry.

We’ll dive into the founding story another time, but I want to wrap this up with

details on what I want to morph his newsletter in to.

April/May 2026: Fund Officially Launches

We go live.

Now I have a newsletter with no consistency of topics, no nucleus, and a fund.

So naturally, I need to merge these two somehow, in a fun, cool, productive manner.

So! …. I was thinking… the AI platform I’ve been building is now full crank, I should use it with a few of you all in a private Zoom session with other people who love stocks.

I’ve been cranking on this, and it’s been extremely helpful for my game.

I’ve gotten it to the point of sourcing, vetting, underwriting, valuing, tracking, and telling me when to buy/sell.

The yellow line was our entry price, the red is current price.

I’ve put 100’s of hours into this system, and now I want to share the conversation with anyone who actually truly also loves stocks.

In order to get this system to work, and standardize stock comps, I had to create my own version of accounting so I can underwrite each company against only 2 key metrics. Happy to share more about those as I want a small group to battle test this thesis.

You’re Invited to Our Quarterly Call…

We’re launching a quarterly talk club. And our first convo will focus around using this platform to break down 1-3 stocks IN DEPTH. And I mean… DEPTH!

FAQ:

1. Cost money? NO. We're doing this for the love of stocks.

2. Cost time? YES. We want dedicated attendees who love stocks.

3. When? IDK. I'll let you know as soon as I look through applicants

Request an Invite if you’d like to JOIN:

• Name?

• Have you attended Don’s online event before?

• Do you invest in stocks actively?

• Do you love business?

• Are you able to tune in and participate for 90 minutes doing a deep dive on 1-3 stocks: financials, trends, CEO, etc... a fun, deep discussion you definitely are not getting on CNBC SQUAK SQUAK SQUAK Box.

• Email to send your invite?

Answer Them Here

I HOPE TO SEE YOU ALL THERE! APPLY THIS WEEK, I’LL SORT THROUGH THE 2 PPL WHO DO APPLY BY MONDAY! ;)

SOMETHING SPECIAL NEXT WEEK!!!!

I’ll give you a hint!! If you tuned into our pod pilots, you should recognize this face!!

Let’s go get em!

~DON

substack.meetdonstein.com

https://x.com/donversationz

Www.LinkedIn.com/in/donstein

[Topic] Sharing my Worst-of-All-Time investment mistakes, and recent hiccups, so you don’t make the same ones.

My Worst Investment Loss Happened Last Year from ETH, Never Again.

Today’s newsletter is inspired by the quote I heard on Compound & Friends Podcast with Josh Brown and Michael Batnick:

This famous Wall Street mantra has been molded over the years to imply that a “great investor” is someone who makes a massive, catastrophic mistake early in their career, learns a brutal lesson about risk, and never lets it happen again. If they lose a fortune a second time, they aren’t a great investor.. they are just reckless.

It implies every great investor made a catastrophic mistake, but ensured it did not happen twice.

While my catastrophic mistake wasn’t un-profitable in 2025, it was losing 95% of my annual profits from Etherium in late 2025. Went up 400% on the year in 3 months, and then right back down to only being up 20%. Was still a nice return, but an awful experience I will never do again. I still think about that daily, it’s my chip.

Not Losing This Fund.

So when I first launched this new fund, Thoughtful Directions Capital, I was openly very worried that I was doing the wrong things by having a ‘traders’ mindset. I kept wanting to be a value investor, but I just couldn’t stop trading. I was scared from ETH, and I was running scared every time a stock even sneezed. I covered my Investor 1 vs Investor 2 dilemma back in Week 22.

Well it’s now week 39 or something like that, less than 20 left!!, and I’m happy to say that ever since July 7th I totally broke that Jekyll Ξ Hyde trading mindset. I broke that on July 7th (story for a later time), but from that date I just completely removed the feeling of FOMO from my emotional state when investing in stocks. It’s not come back, and I don’t really know why it would. It’s useless. I optimize only for FOME (fear of moving early). Implying that if I’m not the innovator moving first, I’m probably the unknowing idiot moving last. So I should not fear being first, I should hunt for out of favor, and I should lean in when I’m going solo.

Almost the same hour we approached our new high-water mark, I mis-judged Lulu

New strat is working INCREDIBLE.. but as I learned I’m still human. Capable of not thinking with common sense, as LULU’s been falling apart for years.

As of Thursday (Sept 3rd) I had gotten our fund back to break even. But as I’m writing this on Friday (Sept 4th), gosh, I write this from a place of disappointment as we gave 1% of it back (our worst day ever, and it wasn’t from dumb trading mistakes, it was from incorrect underwriting of a deal I should have known better than to value at a 15x on FAIR pricing targets).

I cannot describe how hard I worked or how proud I was of hitting that break-even milestone. We were consistently beating the $SPY over the course of August, and I was making back all our losses while maintaining 65% cash, and taking minimal risk. It really was beautiful. I touched what it felt like to be a true value investor.

I did it through a very simple method = Investing only based on things being a bargain price, after careful underwriting.

The system fundamentally relies on only two decisions:

• #1 always opting for conservative estimates in all scenarios

• and #2 never buying above ‘fair’ pricing.

When I stick to that discipline, despite how many I miss on the upside, we make money. It’s the key to waiting for your pitch.

I had not made a ‘buying’ mistake in 4-6 weeks.

Meaning, just about everything I had bought over the last month was helping the portfolio go up regardless of bull/bear macro market. And, it was correctly sized and priced within my very stern policy.

It was a thing of beauty to witness. The market was down, we were down less. The market was up, we were close enough to it on either side of it that it was a great day. Then the market would go down, we’d barely move down, or maybe even stay even. We did that every day for ~4 weeks.

On the exact day, nay, the exact hour that our fund got back to break even (I worked so so hard for this) was the same hour that Lemon’s earnings call approached. If you can sense the tone shift, this is where I made a mistake.

New CEO to Save the Day?

I was (and still am) excited by the incoming CEO. She’s proven nothing yet as the LULU leader, but here’s a few things that had me excited.

• #1 She is on the board of three public companies, one of them being Spotify! . She’s been on Daniel’s board for nearly a decade.

• #2 She helped launch Nike Women’s from nothing in the 1980’s (?) to a billion dollar brand.

• #3 Three executives already left this week, the week before she starts. That tells me that she is cleaning up house even before she gets there. And nobody was hired in their place, so she’s going to get in there and hopefully hire some bad ass mojo’s.

But as Ben pointed out to me, he fell for this with Nike.. so watch out.

Current Co-CEO’s Did Their Best, but Not Good Results

The current CEO situation is a mess. The business has been sliding for years, and the most recent effort only made things worse.

They brought in two people from LULU management to be CO-CEO’s.

Let’s start with that issue… if you have two CEO’s… then you have none.

But giving them the benefit of the doubt, I listened to multiple earnings calls.

Absolutely brutal.

Constantly blaming things they don’t control for their lack of performance.

Constantly dropping revenue goals.

Their inconsistency of launches for new successful products seemed to always get blamed on ‘negative social media sentiment’ or ‘bad economy’ or ‘competition.’

Well if it is a bad economy.. then how come your competition are selling so much more?

Their excuses made no sense, and it was clear this was nothing more than a polished up pony show as we await a real CEO to lead.

I figured that the two interim CEO’s would be bad, but not do too much damage. I was sadly wrong.

The stock price, and the revenue, and margins, all paid the price of poor leadership. By the way, I’m not the only one who thinks this.

The Founder of LULU is making the same complains, and tried a hostile takeover to get his company back after watching this clown show unfold.

It’s painful to see the numbers, because as of last week LULU reported a decline of 10% in USA revenue. That’s down from positive 12 months ago, and the Street expected -4%.

So, they really underperformed. That gives very little confidence going into the future quarter.

But…. and it’s an important but! Our CEO SAVIOR starts Sep 8th!!

And this is where I made the mistake.

I categorized LULU as ‘15x = Fair’ when new CEO was not even starting until that following week

The key question I had to answer, which was subjective, about underwriting…. is a FAIR price 10x for this, or 15x for this?

Normally, I have absolutely no issue answering this. I opt to 10x’ing owner earnings unless it’s a truly exceptional business.

It was very clear LULU has about $1.2-1.35B of annual earnings power, and +/- $0 of liquidatable assets over liabilities, so the simple question I asked myself, is this company’s cashflows worth $12B or $18B?

If it’s $18B (that’s 15x), then was a screaming deal trading at $120/share. And I should have ~$75K into it.

If it’s fair price is $12B (that’s 10x), then I should absolutely not have anything invested, and I should be waiting for my clearing price to enter of $101-109, and only enter with $25K.

I made the call just before the earnings call kicked off that I felt this was a 15x. Which was the wrong call, because all bits of common sense tells you this is a 10x’er. However, I over-indexed on Heidi being CEO, thinking her clout on Spotify’s Board, Nike leadership, and removing of prior mgmt was enough of a signal to the market that is turning over a new leaf.

I 100% knew that current management was awful, I knew the quarter was going to be brutal, you could see it in the numbers, and their guidance last Q was negative.

But I discounted the risk of what two part-time co-ceo’s with no prior experience running a company during turbulent Tariff times could handle.. And, I added too much premium to the risk that Heidi was coming in as CEO next week.

It sounded great - but reframing it, she didn’t even start for another week!I
WHAT WAS I THINKING GIVING THIS 15X AT FAIR VALUE..

That’s a brutal set up to get this wrong in my system, because it is straying from my two fundamentals I covered at the start of this writing today:

I broke rule #1 by giving benefit-of-the-doubt. I should NOT be paying for hope, a great investor only pays for proof. By breaking rule #1, I then caused myself to over-extend and break rule #2 since the goal posts for ‘fair’ were on the wrong side of the field.

Upset with myself.

My internal voice was also screaming at me prior to all this, you can see from my text this was by biggest flagged worry, but I talked myself out of it being a risk because ‘whatever, the NEW CEO will save us! She deserves a valuation premiums today!’

So silly. I should have waited.

I watched 100’s of pitches fly by, and only swung at a select few this past 6 weeks.

It was a completely new investment style, and it changed my returns significantly.

So losing a good portion of the last 2-3 weeks of returns from a mis-categorization of LULU being a higher quality stock than they rightfully deserve, is brutal for me.

As is how it goes…

So without dwelling.. the only question now is, what do we do so that we make money?

The first step, is to codify the rule, print it out, and hang it above my desk.

1 major mistake = 1 major rule. Never to be broken again.

We’re up to 7 or 8 hanging, and the good news is that once they are up there, they do not seem to repeat with any sort of consistency.

This rule involved me putting in a framework for how I select between FAIR being 10 15 or 20x.

More to come in the later Monthly edition of our full portfolio underwriting at end of Sept.

I love to think about all sorts of things. Finance, and also life/education.

Request Your Investor Invite:

Request an Invite

Dear Founders, Investors, and HNWs,

If you’re running a startup, working for corporate, or lucky enough to have a pile of cash, in all scenarios it’s important to compound your wealth.

Stocks are not for everyone, especially individual stock picking.

It’s a skill that requires years of hard lessons, and losing money.

A handful of investors stick through the lows, and realize how lucrative it can be.

So each month, we’re going to pick ONE STOCK and do a deep diver conversation with a hand-selected group of business leaders.

Join the Investor Roundtable

You can find out more details by clicking the above image or link.

Next Monday:

We’re covering either music, or these below Qs as my ‘dedicated’ podcasts hosts delayed our recording today :)

Q1: What’s the key to raising a family?

Q2: How would you fix the USA education system?

substack.meetdonstein.com

~Don

https://x.com/donversationz

substack.meetdonstein.com

September Newsletter Previews

As always, my ideas remain fluid, but this is the general direction we’re heading this month with content. A mix of friends, music, life experiences, and of course, wrapping it up with a heavy deep dive of investing/stocks.

September 7th: “Q1: What’s the key to raising a family? Q2: How would you fix the USA education system?”

[Podcast]

Chase and H are both incredible parents with a large family, Ben and I are not yet, but we grew up with the Midwest lifestyle in Michigan. So we’re going to cover advice and experiences. We’ll spend the entire episode only focused on those two questions next week.

We agreed the other day, “nobody wants to listen to 4 friends talk more about interest rates, Trump, Iran, and all the other stuff that millions of podcasters with no edge continue to talk about...”

So we’re going back to the drawing board of format iteration.

We feel the smart direction is to find something UNIQUE in which no podcast currently offers, or at least not at scale.

My idea is for each of us 4 to present something per episode to the other 3 friends; a business idea, stock, life problem, whatever it is we usually talk about as friends. And then we spend that full episode working through how to help on another with the goal/problem they presented.

Could be cool. and valuable for us and ya’ll. TBD.

Our other format concept, is to select two questions per week, and explore each of them for 30-45 minutes. You can get a preview of this format at the end of this newsletter with a new 1-hour long episode available today.

September 14th: “Bring Ppl Together with In-Person Music”

[Music Experience]

Taught myself to write lyrics over the first 15 years, then learned to produce sounds over the last 5, and most recently I’m learning to bring it all together DJ’ing (for fun).

This past weekend I hosted my first DJ experience (it was just 4 friends, as I’m new to this). But 2 speakers, 100 glow sticks, and a LED mood light set the tone.

The coolest part is I could not do any of this just last week…. it took me <2 hours to learn this so far. I’m a natural!

People keep asking…. YES! I ALSO WROTE, PRODUCED, PERFORMED (then altered my live recording with AI), AND IDEATED EVERY SONG!!!

I’ll also share updates about a ‘songwriter event’ I attended where local artist got on stage to sing what they wrote, then discuss their thinking.

Again, just one of the many activities I’m saying ‘yes’ to without worrying about what might or might not happen. At the same time, I’ve made about 75 songs this year.

Brining that all together, I’m working right now to find a venue to host a 25-50 person ‘music experience’ that will be one-of-a-kind.

September 21st: “From 224 LBS to 180 LBS”

[Fitness]

I’ve been showing up to the gym 3-5 times per week now, for almost 5 years straight. This includes 241 ClassPass classes, and that’s not including most of the spinning and gym sessions I did outside of ClassPass. (receipts below).

During that time I went from a peak weight of 224 with no muscle, to around 180 with muscle. It wasn’t smooth of course, but it proved to me that consistency, not intensity is the key to success. A lesson that was also taught to me in the form of both investing, and dating, this past year.

My only goal for fitness was just to show up; that included some days where I got dressed, drove all the way to the gym, put my right toe in the building and then turned around.

I didn’t work out that day, but I showed up.

In the same spirit, some days I’d drag myself to the gym, fully expecting to just dip my pinky toe in and then leave… Some of those days resulted in the best workouts of my life.

And that is the difference, those days. When you didnt’ want to, and it works out better than expected.

I’ll share some easy strategies I used to keep myself on track, anybody can do it no excuses :)

September 28th: “Returns Before vs After Heartbreak (very good!)”

[Returns + Valuation Methodology]

I’m going to walk through my entire portfolio holdings, explain why I own each company, and how I value the business.

I’ve created a valuation methodology suited for the way I think about companies, which is built on the back of Warren Buffet’s Owner Earnings Methodology, David Swensen Yale Portfolio strategy, and something I’m calling Owner Networth (which helps me separate cashflows value from assets value). My AI system is helping a TON.

Metrics: We care about Owners Earnings, Owner Net Worth, Owners Earnings Expansion Rate. Thoughtful EV (our MC - ONW formula), Owner Earnings Yield (thoughtful EV / OE), Owner Earnings Multiple, RONW Return on Owner NW (ONW/OE).

I’ll dive deeper into this at the end of September, as I’m taking all month to ensure this strategy continues to work at this pace, and at the same time codifying my philosophy as our core investment principles for the fund.

So far, so (very) good.

Fingers crossed.

Watch Last Weeks Episode! 4 Friends, 2 Questions, 1 Pod:

Q1: Is Trump good or bad for USA?

Q2: What is the purpose of life?

We spend about 35 minutes per Question:

Chase: “How do we define good? If we think USA was on bad path, then I think he’s great, yes.”

Ben: “But a counter argument, internally in the USA we are more divided than ever.”

H: “Categorically across Europe you hear negative sentiment in polls for Trump. yet still, Europeans buy American weapons, airplanes, we hold Dollars, we’re not shifting our money elsewhere, we still rely on USA cloud (Amazon for example), every company I ever worked with does. Our kids consume American food, and culture. So, it’s a hard question to answer.”

I did my best to moderate it fairly to get multiple perspectives out there :), enjoy!

~Don & Friends

Www.LinkedIn.com/in/donstein

https://x.com/donversationz

Request an invite to ICC: https://iconic-company-club.donstein.chatgpt.site/#invitation

Missy didn’t have a long resume. She didn’t have academic accolandes. And her longest career was being our babysitter for 13 years, then working with autistic children for the next two decades. Society rarely rewarded her for her kindness. In fact, many cruel people took her for granted. Missy purely lived to help other people, people who otherwise could not help themselves. She saw herself as the last line of defense for them, much like protection she wished she had as a child.

She had almost no money besides what the government and our family helped pay her for work, and yet she was more than willing to spend her last dollar to help brighten the day of a child with autism.

Missy made a massive impact on me because of her spirit. And her unconditional love for me; for the past 20 years of my life she has texted me literally just about every single month checking in on me; my dog, my love life, my family. She was one of my biggest cheerleaders. Today’s newsletter is a special one. Thank you for reading.

Her energy lives on forever, and has vastly improved my life. ❤️

If you are one of the lucky people who opened this, thank you.

I hope it changes your perspective on how to observe the people around you.

I hope it changes your perspective on how to observe the places around you.

I hope it changes your perspective on how to observe the details around you.

Some context

Other than my parents, Missy (who I called “Mip”) was the person most pivotal to my upbringing from a caretaker perspective.

She is sadly no longer with us.

Mip prayed for a miracle: the chance to have a second life.

But it was not Gd’s plan for her.

My response to her was as positive as I could make it.

But we both understood that probability was not on our side.

I FaceTimed her while she was in hospice.

Hours later, she passed away.

Before I come back to writing about Mip, I need to share another piece of the puzzle.

A theme that has been recurring in my life since her passing: “Listen to the universe.”

The concept is simple.

Listening to the universe means becoming aware of the quiet details.

The coincidences.

The people who appear at exactly the right time.

The ideas that keep returning.

The opportunities that feel strangely obvious once you notice them.

I’m only just starting to read it now, but I believe this is also the core theme of The Alchemist.

After Mip passed away, an insane number of coincidences began happening in my life.

Things that felt too obvious to ignore.

Things that felt “shown” to me in a way that pushed my path in the right direction.

I noticed that the more information I collected, the more experiences I had, and the more places I went in person, the more positive impact the universe seemed to have on my life.

And so I decided to take this idea to an extreme.

My month-long experiment

I conducted a little experiment over the past month.

The rules were simple:

No ordering food delivery.

Workout a ton.

Push myself every time.

Show up to workout classes four to six times a week.

Work a ton.

Wake up at 4 a.m. every day, work out and eat by 6 a.m., then grind through the entire day and evening.

And if somebody invited me somewhere, or I saw something happening that sounded even remotely interesting:

Go.

No overthinking it.

No deciding whether it was “my thing.”

No sitting at home because it was easier.

Just show up.

So far, that has included:

• A sound bath on floating mattresses in a pool

• An all-day wellness retreat with two of my buddies that started at 9 a.m. with a fitness class in 90-degree Florida heat, followed by a 130-foot waterslide

• Pottery class, my first time ever

• A singles event, which was embarrassing, but whatever

• Two spin classes in cities different from where I live

• Yoga on the beach, where the sunrise was glorious

• A new style of Pilates using a Lagree machine, where I was probably the only dude who had ever signed up

• Making more than 30 house and rap songs with Suno AI

• Being gifted an entire DJ kit by a friend, then buying the speakers myself for absolutely no defensible reason

• Charity event DOG FOAM PARTY where 20 dogs ran around as soap-blasted into the air

• A second charity event in a barn, electric house music themed

• The list goes on and on… I just said ‘yes’ to anything, and then I made sure I showed up.

The tagline for the experiment became:

“I’ll never know, if I never show.”

And amazingly, while I was doing all of this, something else happened.

I finally found my investment style.

And the fund started working.

Observation is not just a life strategy, it’s the investment strategy

Last week, I had about 35% of our fund invested.

On a ROIC basis, we beat the S&P 500 by roughly ~3%.

And on an ROTC basis, we beat it by roughly 1.25%, despite using less than half of the entire fund.

So that’s half the cash making double the profits.

This means very little unless done over decades.

I know that.

One week of performance is statistically useless.

I am not declaring victory over the S&P 500 because I had a good Friday.

But personally, on a relative basis, and because of the timing, it was momentous for me.

Not because of the return.

Because of how I made it.

I have found a reputable, scalable, deployment style that I feel can scale institutionally.

I had been accumulating deeply undervalued companies through rigorous underwriting using a form of custom earnings calculations that is inspired by all the best value investors.

For the first time in my life, I looked at the portfolio and realized:

I could buy these companies, disappear on vacation for ten years, and not spend the entire trip worrying that my money was going to vanish.

That is what I have been looking for.

I felt like I had taken almost no large-scale risk.

I had kept 65% of my money in cash.

And yet, somehow, I had outperformed more than half of investors.

While also taking less risk.

So we’re doing more of that - because this works.

I’m buying iconic companies at depressed, out-of-favor valuations.

Then I’m scaling into them slowly enough that I preserve plenty of cash for whatever opportunities the market brings me next.

And that last part has completely changed how I experience markets.

Every morning, I wake up and the market gives me a bunch of prices.

I don’t take advice from those prices.

I look at them as offers.

Sometimes Mr. Market shows up at my front door with something ridiculous.

“Hey, you know this incredible business you’ve wanted to own for 9 months…? Everyone hates it this week. Want it for 30% less?”

Sweetheart deal.

Thank you very much.

Other days, Mr. Market shows up with nothing.

That’s fine too.

Because the opportunity will come eventually.

Especially in a market like this, opportunities can appear constantly.

But that will not always be true.

You need a strategy that works when bargains are everywhere and when they are nowhere.

So I go slowly.

Take what the market gives you.

Nothing more.

And definitely nothing less.

The market isn’t the only place I’ve noticed hard work + patience + observation is the key:

The broader theme of my year, across investing, love and life, has become:

Listen to the universe.

I’ve had a frankly ridiculous number of coincidences over the past few months.

Some are tiny.

Some are hilarious.

Some have been so statistically strange that I’ve had trouble dismissing them.

And something changed around the time I lost my babysitter and friend, Mip.

Mip had an unusually powerful spirit.

She was goodness, kindness and caring personified.

She loved me, and I loved her.

Her death made me think more seriously about what any of this actually is.

There was a famous experiment, highly disputed for very good reasons, that claimed to detect a change in body weight at the moment of death.

People sometimes describe it as the experiment that “weighed the soul.”

I don’t pretend that experiment proves anything.

But the underlying question fascinates me.

Einstein gave us the relationship:

E = mc²

Mass and energy are related.

If you rearrange it:

m = E / c²

A tiny amount of mass corresponds to an enormous amount of energy.

That does not scientifically prove that a soul has mass, or that consciousness survives death.

I don’t know that.

Nobody does.

But I find the idea beautiful.

What if what we experience as spirit or consciousness is somehow connected to something deeper than the physical structure carrying it?

Energy does not simply disappear.

And when Mip died, I found myself imagining that whatever made her her (goodness, caring and love) went back to wherever it originally came from.

Back into the ether.

Back into the universe.

I can’t prove that.

But I can tell you something strange.

My life got better.

And it felt as though she was lending a helping hand.

Something changed

Over the weeks that followed her passing, I started experiencing an absurd amount of support from the universe.

Coincidences.

People.

Ideas.

Opportunities.

Stocks.

Everything started aligning in a strangely harmonious way.

Things showed up at exactly the right time.

You can explain every individual occurrence away.

That is the rational answer.

Maybe it was pattern recognition.

Maybe I was simply paying more attention.

Maybe changing my behavior changed the number of opportunities I encountered.

That is entirely possible.

Actually, it is guaranteed at least part of the explanation.

But it does not change the benefit.

Eventually, I stopped caring whether the mechanism was spiritual or statistical.

Because the practical lesson was identical:

Pay attention.

So this month, I decided to take that idea seriously.

Get into the real world.

Show up.

Observe.

Do not force an outcome.

“I’ll never know, if I never show.”

And it has helped basically everywhere.

Life.

Work.

Investing.

Fitness.

Mental clarity.

Confidence.

I feel like I’m moving forward without needing to know exactly where the road turns.

The only thing I’m focused on is observing, listening and acting when the signals become clear.

This mindset is how Warren Buffett invests.

He calls it, “waiting for your pitch.”

It is how South Park is written. They often cram the entire episode together the night before it airs, they procrastinate all week, then pump out the episode literally 24 hours before it’s due to studio for airing.

It is how Kobe practiced basketball.

Mamba spent 99.9% of his life preparing, while the world remembers the 0.1% of the time he spent on the court during a 48-minute game.

He was waiting for his moment far more often than he was capturing it.

The story is the same for many legends.

They worked hard.

They practiced.

They improved.

They observed.

And when they were fully prepared and their moment finally appeared, there was no question in their minds that they would capture it.

If it’s Missy, or just statistics, the Universe is talking

I’m not sure everything is predetermined.

We’ll save that one for another newsletter.

But I increasingly believe there are paths that fit each of us better than others.

And I think finding your route requires a strange combination of enormous effort, and enormous patience.

You have to listen.

You have to observe.

You have to prepare.

And then you have to wait.

Which is exactly how I now think about investing.

I cannot force the market to make an incredible company cheap.

I can spend hundreds of hours studying companies.

I can understand their businesses.

I can understand their balance sheets.

I can know exactly what I’m willing to pay.

I can keep cash available.

But I cannot command the market:

MAKE THIS STOCK CHEAP TOMORROW.

That is not my job.

My job is to be ready when it happens.

And maybe life works more like that than we admit.

You cannot manufacture every friendship.

You cannot manufacture love.

You cannot manufacture the perfect business opportunity.

You cannot manufacture the moment that changes your life.

You can increase your surface area for luck.

You can show up.

You can become better.

You can prepare obsessively.

But eventually, something outside your control has to meet you halfway.

The eye of the tiger

I’ve written before about what I call my eye of the tiger philosophy.

It is easy to confuse patience with passivity.

They are completely different.

I am not advocating sitting on your couch waiting for the universe to DoorDash you a meaningful life.

Quite the opposite.

I am advocating working twice as hard behind the scenes so that when your opportunity finally appears, you recognize it immediately.

Clear the vision in your head.

Know what you are looking for.

Prepare for it.

Then wait.

Like an eagle watching the water.

Most of the time, you do nothing.

Not because you are lazy.

Because there is not a fish worth diving for.

Then one appears.

And you f*cking go.

That is increasingly how I want to invest.

It is how I want to work.

Do not chase every opportunity.

Prepare yourself for the right ones.

Put yourself where interesting things can happen.

Pay attention when they do.

And when something truly obvious finally presents itself, do not hesitate because you have become addicted to waiting.

Take your shot.

“You’ll never know, if ya never show.” (timeless advice…)

BTW…

Missy was an avid reader with you all.. she will be missed! Part of me still hopes that I’ll see ‘opened’ for this weeks edition in the email analytics next to her name!

HAVE A GREAT MONDAY AND WEEK!

Thanks for reading! <3

~Don

https://x.com/donversationz

Www.LinkedIn.com/in/donstein

substack.meetdonstein.com

YOLO.

“I just want everybody to get to know my squad, Remy Boyz” -Fetty Wap

When I was 22 years old living in San Francisco with hardly any credible clue to what venture capital was, nor what Silicon Valley was, nor who the heck Tim Draper was…. I joined Draper University.

It forever changed my life. At Draper U, I made some of the best relationships with friends and mentors I could ever ask for. Four of them are Hemant, Chase, Ben, and Manoj (although Manoj is apparently too cool to show up for the podcast).

So every two weeks, the four (or maybe one day five) of us are getting together for 90 minutes to talk about the world, business, investing, and life.

I invite you to tune in to Episode 2 of the DayOne Pod.

Chase loves Trump, Ben loves Main Street, Hemant loves UK, I love capitalism. Yet we are all very rational and funny. That is what we share in common: a love for entrepreneurship, business, adventure, tech, startups, and conversations about the future. The mix is great together, fun debates, thoughtful points, and I really enjoyed re-listening to the convo (starts at 14:00 once we stop goofing off). We’ve been having conversations like these for almost 10 years straight now.

CONVO TOPICS

1. The Stock Market Is Booming: So Why Does the Main Street Economy Feel So Bad?

12:48–22:45 — skip ahead to the start of our convo, here.

We debate the giant disconnect between a booming stock market and the much harsher reality facing small businesses around the world.

Ben points to the rise in commercial real estate bankruptcies, while Chase and Hemant discuss the global shift in economic power—and whether wealth inequality is truly getting worse or merely feels worse because social media puts everyone else’s wealth directly in our faces.

2. Is Traditional College Still the Best Path?

24:42–32:30

Chase introduces us to Alpha Schools, which leads to a broader conversation about how we should educate the next generation.

Should kids spend years memorizing material they’ll forget…? Or should they be learning trade skills, investing, entrepreneurship, and other crafts they’ll actually use in the real world?

3. The Data Center Boom and the Infrastructure Bottleneck Nobody Talks About

34:00–44:14

Chase shares what he’s seeing professionally inside the data center boom: insane demand for high-value chips, massive development opportunities, and the very real constraints created by permits, electricity, and power infrastructure.

I thought Chase’s insight into the actual bottle neck in datacenter was the most fascinating part of the convo.

4. My Game of Thrones Theory About Oil, War, and American Power

44:20–47:50

I lay out my Game of Thrones-style theory about US energy policy.

What if conflicts involving Iran, Russia, and Ukraine are not only geopolitical battles but also part of a much larger struggle over who controls the world’s energy supply?

And what if America’s long-term strategy is to become the dominant global exporter of oil and natural gas?

And what if this has been a plan in the work for decades?

Sounds like a fun imaginative exercise.

5. Using Fibonacci Retracements to Analyze Tesla Stock, and my thesis on Elon being an Alien

56:06–1:03:52

I show everyone how to use Fibonacci retracements to identify potential buy zones, resistance levels, and sell-off targets for Tesla. I learned these initially from Lance Roberts.

We finish by deciding to track Tesla together and revisit the stock in future episodes… so we can see who was right, who was wrong, and who quietly pretends they never made a prediction.

Bonus: Is the Market Way Too Complacent Right Now?

2:00–11:14

Before the main conversation, I share a video from investment strategist Lance Roberts, who manages roughly $2 billion and believes investors may be getting far too comfortable.

We discuss the unusually low VIX, the market’s current bullishness, and whether the apparent lack of fear is itself a reason to be worried.

How to Watch?

Watch on YouTube:

Watch on X:

HAVE A GREAT MONDAY AND WEEK!

Thanks for reading!

~Don

Www.LinkedIn.com/in/donstein

substack.meetdonstein.com

“I’d rather be generally correct, than exactly wrong..” -Warren Buffett

One critical mistake cost me $50K in upside on a freak occurrence today.

We didn’t’ lose money, but we didn’t make what we rightfully identified as value. Here’s the story…..

—

I was honest when I had the trading issue, and felt that I was ruining the fund.

I’ve fixed that. We’re good. And on the right path, now.

I now feel the opposite of negative. I’m now incredibly optimistic that I’m able to find, identify, and underwrite deals.

Said simply, I feel I’ve proven I can identify value.

What’s value if nobody realizes it? Well…. it is still value.

But what’s profit if nobody realizes it? Well… that is nothing.

In order to conver value to profit, you must have other peopel realize the secret you knew.

SO I knew a few secrets about

The founders were best friends, the biz has 1M verified clinicians on it. I tried to get into the app, would not let me b/c I’m no Doctor.

It’s grown 10% every year for a decade, but guided last Q to only 4% growth.

I looked at everything closely, and said, “this 70% stock decline is not warranted.”

So I set my price targets…

Roughly like this..

My thesis was that it basically had no sellers left, and 17% of shares were Short.

The company is doing $200M of owners earnings, and has nearly $700M of netwroth in the biz.

Let’s assume these numbers are accurate, then by my rules I should have acquired $25K below that $21.16 number. And, it was trading there. So I did.

They reported earnings, and actually re-accelerated growth… from 4% to 7%.

Which would take their PEG from 2.5 to 1.4 if we didn’t update any of the earnings numbers.

The re-accerlation of growth, the stabalization of operating cash flows, and the AI narrative of them competing with Antropic and OpenEvidence on quiality led to a rally. Plus a 17% share short squeeze. It has now settled around 33% up. It probably stops around 20%. But wow. What a ride!

Not to mention, this stock got a sentiment re-rate, and now it probably settles on the high end of 15x not the prior high end of 10x. And that’s exactly what happened. So we just witnessed a true re-rate in real time of a value opportunity. From out of favor, to visible darling.

Eye-of-the-Tiger Investment Philosophy, Starting to Work

Simple. A tiger waits, and waits, until the moment is right, then it leaps.

I did all that.

I had the prey in my mouth, it played dead, then the second I loosened my bite it scurried off. Never to be seen again.

Damn.

But, we are getting so close to becoming extremely great at this. I’m knocking on the door.

Let’s keep pushing! No negativity. These are GREAT signs, I’m knocking on the door of companies I find in a dumpster that then make CNBC front page.

These are good signs of things to come!

And yes, I have the receipts to prove it :/… literally 2 minutes before the explosion.

I’m doing everything I can to rub my face in it to ensure I never forget this.

Just need to now bring this together into a more simplified system integrating the new working-capital rules we’ll deploy/hold by.

I’m seriously encouraged, another 2 weeks of heads down week/weekend work and I think I’m going to have a few of these in the portfolio. But that is NOT for me to decide, if I learned anything, you let the market bring things to you. You take what you’re given, you don’t take more, and as we saw today, you should not take less.

I repeat:

You take what you’re given, you don’t take more, and as we saw today, you should not take less.

~Don

p.s. if you’d like to watch a video of myself trying to break down what went wrong here…. enjoy via this LIVESTREAM LINK.

Www.LinkedIn.com/in/donstein

substack.meetdonstein.com

The real investment skill is being able to strike when the moment is right, and hold on for dear life.

Today’s Article is inspired by this quote:

“Extreme patience combined with extreme decisiveness. You may call that our investment process. Yes, it’s that simple.” -Charlie Munger

Eye-of-the-Tiger Investment Philosophy

What is the definition of my Eye-of-the-Tiger investment philosophy?

Simple. A tiger waits, and waits, until the moment is right, then it leaps.

As Warren Buffett says, “most people confuse action with progress,” highlighting that the real skill of a top investor is being patient when there is nothing to do, and acting swiftly when opportunities poke their heads out like whack-a-deal.

Tigers are solitary stalk-and-ambush hunters. They camouflage, silently close in within 25 meters of prey, and then when the moment is right ***POUNCE!!!**

They overpower victims with their sheer patient strategy.

The tiger might catch one meal per week, the other days consuming, protecting the carcas, and then resting/preparing for the next hunt.

The more I study stocks the more I reframe investing as just the overlap between learning and patience. Just as luck is opportunity meeting preparation. Or just as life is the discipline of using nurture to better nature. The real investment skill is being able to flip between inaction and action when your patience finally pays off.

As Charlie Munger says, “Buffett is really, really good at doing nothing when there’s nothing to do.”

He is not literally doing nothing. He is away learning. But financially he is being disciplined. So it is nothing for the sake of waiting for the right moment, rather than nothing for the sake of laziness.

I love investing because it is so analogous to thinking. The never-ending question of what is the right way to invest and what to invest into matches the bigger question of what is the right way to live and what to do with my time. We invest money into stocks and time into our lives. Both lead to some percentage of those investments being a massive regret. That is unavoidable. Not everyone you give your time to will provide you a return on time, and not every deal you finance will provide you a return on investment.

Separate the concept of “deal” from the result

The real investment skill is being able to flip between inaction and action when the moment occurs. That trigger can only be flipped through intense, genuine, deep learning. Enough learning that you can common-sensically explain the key factors that make this deal a great result or a failed result. And that is the other key point. Separate the concept of “deal” from the result. A great deal can have a poor result, and a bad deal can have a wonderful result. Luck and chance decide those. Even a deal with a 99 percent chance of success can go south once a century.

So the real wrapper of learning and patience is discipline. Discipline waits for something specific. Fear waits indefinitely. Discipline waits because it knows better. Fear moves because it thinks it is missing something.

The watchlist process and the entry price

Great investors win in two areas: the watchlist process and the entry price. All other aspects of the job are tomfoolery. If you have 50 well-studied quality companies on a watchlist through learning, sooner or later they are going to drop low enough to be purchased at a great price through patience. Patience without learning ironically creates impulsive actions because you are basing decisions on real-time information rather than unique insight. Learning without patience gets you a portfolio of 40+ over-excited names with only 55% conviction in each one. Just enough to hold them, but not enough to give you a true edge.

Here is how Morgan Housel put it in The Psychology of Money:

“Investing is not a hard science. It is a massive group of people making imperfect decisions with limited information about things that will have a massive impact on their wellbeing, which can make even smart people nervous, greedy and paranoid. Richard Feynman, the great physicist, once said, ‘Imagine how much harder physics would be if electrons had feelings.’ Well, investors have feelings. Quite a few of them. That is why it is hard to predict what they will do next based solely on what they did in the past. The cornerstone of economics is that things change over time, because the invisible hand hates anything staying too good or too bad indefinitely. Investor Bill Bonner once described how Mr. Market works: ‘He is got a Capitalism at Work T-shirt on and a sledgehammer in his hand.’ Few things stay the same for very long, which means we cannot treat historians as prophets. The most important driver of anything tied to money is the stories people tell themselves and the preferences they have for goods and services. Those things do not tend to sit still. They change with culture and generation. They are always changing and always will.”

That is the heart of it. What price makes this a clear buy? What evidence would prove my thesis wrong? And what am I waiting for, exactly?

When you act without full confidence, you retreat

I am mostly in cash right now. Here is why. Here is my discipline. Here is what would change it. If patience is truly my edge, it should survive through any condition.

Here is my process: search, look, learn, study, and know companies through and through. Here is why I am patient. Because when you act without full confidence then you retreat right at the moment when you should be leaning in more. You should be prepared for that lean-in moment and ensure you are getting a great price to begin with. Here is what triggers action: when the actual price we set gets hit. This should be low and a GREAT price.

Practical framework that keeps me honest

The practical framework that keeps me honest looks like this. Only buy when it is a true no-brainer. Before pulling the trigger I run through these questions:

Great Price?

1. If it dropped tomorrow to my true no-brainer price, would I be pissed I bought today? Stop if yes. Then this is not the price yet. Wait for it.

2. If it ran up significantly from here without me, would I be pissed I did not buy? Stop if yes. No real conviction. You do not want the company. You want the chart.

3. Am I buying because this is truly a great deal at a great price or because I think it will go up? Stop if it is just “it will go up.” That is a bet, not a price.

Investment Style Fit?

1. Did I wake up planning to actively trade or monitor positions today? Stop if yes. You did not plan this. You never want to trade. It is a reaction.

2. What am I trying to achieve or protect by watching the market this morning? Stop if protecting losses. That means you did not buy at a great price.

3. If I had bought at a true no-brainer price, would I still feel the need to actively monitor? Stop if yes. A great price doesn’t have you worrying. You’re proud of the discipline.

Key Question

1. And before any of the above: Have I already done the deep work to know exactly what my true no-brainer price is for this company? Stop if no. Do not buy anything yet. Keep studying.

That is the discipline. That is the great price plus never sell framework that turns the juxtaposition of action and inaction into peace and compounding.

Maybe it is everyone. Maybe it is just me. I have a plan but get pivoted by market conditions I do not control. And then never see the plans fully through. Now that is not a bad thing as some plans would not have seemed to have worked in retrospect. But still there is a pattern. I get an idea off the ground, then cannot monetize it properly. Spatial Collective was my first time properly profitable company out of three. This fund MUST make money.

Clarity of gaze = Win without needing to chase momentum

In order to harden my investor gauge I have been studying like mad and writing privately and publicly. Deep dives because they sharpen my edge. Going deep into Meta, Dave, LNG and others helps a ton with confidence in knowing what I own.

I have a guilt fear of LPs not thinking I work hard because we are not making money yet. But the truth is the market does not care if you look busy. It only cares whether, when the great price finally appears, you have the clarity and courage to act. And I am working so hard. It is just the reward is delayed from effort, and I’ve made plenty of mistakes that have slowed compounding. Dumb mistakes. -_-

To solve it I’ve taken every action I can think of. The one that has worked best so far is opening a second brokerage portfolio, and transferring positions from my ‘buying’ portfolio to a separate ‘hold’ portfolio. The psychology difference of going through the effort to transfer the stock each time makes the bar that much higher to sell it. Hopefully, I don’t sell it. That’s the point. Trust my read, be patient, wait for the business cycle to execute fully.

Being fearful of a great price, because you’re buying it when most others aren’t not... that juxtaposition is not the enemy. It is the entire game. Learning sharpens the eye. Patience protects the calm. Discipline flips the switch at exactly the right moment. And that is how you win without needing to chase momentum.

~Don

Www.LinkedIn.com/in/donstein

substack.meetdonstein.com

The real investment skill is being able to flip between inaction and action.

July 13th - Original Article on X

Does $DECK Clear Our Investment Checklist?

Right now, our portfolio is 3 names; Meta, LNG, Dave. I’m looking to diversify into something uncorrelated as a 4th name.

#1 Does it thoroughly diversify us away from our current 3 watchlist names (PGR, DECK, QCOM)?

• PGR is insurance, Deck is shoe apparel (Hoka, Ugg). Neither should be very correlated to AI. However, PGR is tied to rates, and I believe investors would also correlate this to DAVE. So if rates go up or stay sideways, they both benefit, if they go down they probably get sold off to some extent.

• Qcom is a strong company, but tied to Meta esp. considering Meta is one of their newly taunted hyperscaler customers. We’re already at-weight or over-weight Meta

• You can argue PGR and Dave are slightly correlated since they’re both involved in lending to drive income, so rates matter. (oh I realized I already wrote this, anyways, worth noting)

• Deck likely seems the least correlated to AI. (Unless Robots take over the planet and nobody needs shoes any more)

#2 Does it fit our Checklist criteria?

Out of favor: Qcom probably the most in favor, followed by PGR, followed by Deck as the least favored.

Moat: I’d say Deck probably has the least defensible moat given the nature of their industry. It’s a constant churn to remain on top, or get back to it. Cyclical in that sense; the cyclicality comes from consumer taste.

On a podcast I was listening to today, he said of the Shoe companies he’s aware of he’d “rather own Nike or VF Corp (Northface, Timberland, Vans).”

But comparing DECK to VF Corp... I’m missing it. First off, UGG & HOKA vs NORTH FACE & TIMBALAND & VANS is pretty fair fight. Both Ugg and Hoka have grown YoY for a decade, and most recently HOKA grew 16%. On the other hand, Vans declined revenue ~10% last year... and Northface grew, but 4% less than Hoka. Timabland only grew a standard 6-8%. So what am I missing?

Well, VF Corps’ Alta brand grew 50% revenue. Deck doesn’t have any assets growing at this pace. The market gets excited by that...

Claude says:

“Altra and Hoka are head-to-head competitors in premium running footwear — funny enough, both were founded around the same era of the running-shoe innovation boom, just with opposite philosophies: Hoka is maximal cushion, Altra is zero-drop with a foot-shaped toe box. The scale gap is huge though — Hoka did $2.59 billion in fiscal 2026, up 16%, while Altra is likely in the $300–400M range. But Altra growing ~50% while Hoka decelerates to projected low double digits is exactly the kind of David-taking-share-from-Goliath dynamic VFC bulls point to.

FY26 scoreboard is: TNF growing, Timberland growing, Altra up ~50%, Vans shrinking. Versus Deckers: Hoka +16%, UGG +8%. On pure brand momentum, yes, Deckers still wins — Hoka out-grew everything at VF except tiny Altra, and Deckers has no bleeder like Vans”

Hoka grew “only” 16%, but on a $2.2B base — that’s ~$360M of new revenue in one year, roughly Altra’s entire size

So, for DECK, what am I missing?

After digesting all that... here’s the core of what I’m missing:

Put differently: DECK is a bet that a great business stays great. VFC is a bet that a mediocre business becomes decent. and you’re paying a mediocre-business price for it, with Vans stabilization as a free option on top.

This is a really critically important mindset to understand about markets.

Smart investors, more experienced than I, take the side of VFC. My gut says DECK, because “VFC only becomes cheap on hypothetical FY28 numbers: if they hit the 10% margin exit rate, that’s ~$1B of EBIT, and today’s EV works out to ~9x — i.e., you’d be paying for VFC’s future what the market lets you pay for Deckers’ present.”

DECK has no debt, and consistently performed for a decade on growth. VF Corp is a nightmare on revenue consistency to figure out (VF also sold SUPREME.. which I’d argue is their coolest brand), has debt, and is trading at almost a 50% (!!!) higher TTM P/E multiple.

Ok.. so all that’s to say, I personally would rather own a clean story for DECK at an out-of-favor multiple.

DECK vs. NIKE

But... what about vs NIKE?

Right off the bat, the clear difference in my eyes are brand qualities. Everybody knows Nike. Nobody knows WTF Decker is... and only runners know HOKA. So if I look back at this day in 2035, I can see myself saying, “of course Nike is the strongest shoe brand in the world still! It’s fkc*ing NIKE!”

However, I could also see myself saying, “Incredible what that CEO did with Hoka over a decade. $10B’s in sales, $ B’s in profits, and expanded into multiple diversified shoe categories with consumer name labels.”

Both of those are on the table for now.

Looks like Nike trading about 25-30X owners earnings, and 21 P/E. Where as DECK trades at 15x Owners earnings, and if we factor in EV (fortress balance sheet re no debt), then we’re down to 13-14X.

Roughly 6-8% Yield, plus growing 10%+, plus strong margins/ROIC.

Where have I seen this story before.... hmm..... ADOBE!

And that thing fcking tanked despite the solid fundamentals.

With Adobe, we were asking:

“Will technology permanently change this business?”

With DECK, we’re asking:

“Is this just another fashion cycle?”

If DECK/HOKA becomes a durable global athletic brand - more like Lululemon or Nike than a temporary running trend - the current valuation could prove too low. If HOKA eventually plateaus and UGG keeps maturing slowly, then today’s multiple is probably fair (still think it’s kind of on low end, just bc the growth doesn’t mean the brand is done... they’ve been around since 1980s!!! (I also said this about ADOBE....) Getting some red flags here just based on my mistakes with ADOBE. It’s not that it was a bad biz.. it’s just that the opportunity comes from extreme patience to wait for ridiculous like 7-9x multiple. When the bad news is already fully baked in.

BTW.. good sleuthing online for their tech trends in DECK... looks like they’re thinking about ML and analytics.. but probably behind.

CEO Comps: NIKE v DECK v VFC

Stefano has done great in 2 years. +1

And Bracken is built to turn around.. +1

For VF Corp, this is why Bracken’s hiring mattered

The board wasn’t looking for someone to invent a new apparel category.

They wanted someone who had already proven he could:

• simplify a bloated portfolio,

• improve execution,

• rebuild brand desirability,

• and restore profitability.

That’s almost exactly what he did at Logitech.

By the time he left Logitech as turnaround CEO: Revenue had more than doubled.... Market cap increased roughly 10x!!!

Ok.... but I just looked at VANS website.... my lord help save them. Oye. I cannot figure out what they’re going for. I took screenshots from their website and made this... they’re all over the place.

😂😂 Vans just gave us punk → skater → finance bro → dad all in one shopping page.

Maybe Vans works out.... I don’t think this is a bet I’d believe in enough. However, I’ve been buying UGGs for 20 years... new slippers every year or two... and HOKA for 5-8(?) years... whenever I need a new workout shoe.

So.. for me personally, there’s just now way I could justify buying Nike or VF Corp over DECK. Not when numbers, execution, and personnel beliefs are on one side. I think DECK is a great buy, and if it tanked 25% I’d be all over it. But... it’s still floating.. so let’s now comp it back to QCOM and PGR.

And also, I’ve got to admit that LULU or URBN also have cases to be made for them. And I don’t think I’d want all three.. so I’d need to also deep dive between DECK LULU and URBN. One strategy would be index them now, sell the ones that go up and buy more of the one that goes down. But hm.. I’m trying to run a concentrated simplified portfolio of 6-8 names.

So I think I might be better off examining PGR since I know it the best based on studying the insurance market a lot over 6 months.

But, let’s keep doing the checklist comps for now....

Low + No Debt: Net Debt +5B Qcom, +8B PGR, -1.5B Deck (0% debt-to-equity ratio, that’s a strong quality to have for physical goods company).

Profitable: Qcom 22% NI margin, Deck 18%, PGR 12%

Pricing Power: Price x Volume:

PGR is charging slightly less for new policies but doing more volume, volume is growing 8% YoY. April showed Total policies in force reached 39,767 thousand at April 30, 2026, up 8% year over year, led by growth in direct auto and special lines, and May showed total number of policies in force increased by 8% to 39,970, driven by growth in personal and commercial lines. Policy count growing faster than premiums is a good sign — it means growth is coming from more customers, not just rate hikes, but it also could imply that margins take a slight hit to optimize for overall volume.

DECK showing incredible strength with HOKA. Ugg cash cow. Btw, HOKA largest indie Rival, Brooks Shoes, is a company owned by Buffett. (btw, Nike has more debt, higher multiple, and less consistent operating cashflows).

Qcom’s core biz is in decline b/c Apple is moving in-house, but their Auto is growing crazy fast, 35%, and their handset division should be 1/3 of revenue in the next couple years, that’s a great improvement as they shift into CPU heavy datacenter, edge compute, etc...

Founder Led:

None of these are founder led sadly. VERY Impressive CEO track record from PGR. Tricia Griffith

• Tenure: CEO since July 1, 2016 (~10 years). Joined Progressive in 1988 as an entry-level claims representative — a genuine 28-year rise through the ranks (Chief HR Officer, Claims Group President, Personal Lines COO) before becoming CEO.

• Revenue track record: This is the standout. Progressive’s revenue has grown from roughly $23 billion in net premiums written when she took over to $87.6 billion in total revenue in FY2025 — close to a 4x increase over her tenure. She was named Fortune’s Businessperson of the Year in 2018, just two years into the job, for this performance.

• Stock/scale: Progressive is now the #2 U.S. auto insurer (~16.7% market share) with an

  $125B+

  market cap, up from a much smaller, third-place player when she started.

Other mentions... DECK CEO prev. ran Nike EMEA and Puma as well. He started with Nike in 1993... so shoes are all he knows, and these $5B revenue Shoe businesses are all he’s done his whole career.

Cristiano Amon. Tenure: CEO since June 30, 2021 (~5 years). Joined Qualcomm in 1995 as an engineer, became President in 2018 before ascending to CEO

Theme Decade-Long:

DECK definitely has the ‘athleisure’ trend, and hopefully a get-fit trend. They have 240K participants on their Strava Challenge. Runners love one another.

Zone of Competence:

If you understand whether HOKA’s growth holds up and whether UGG keeps its pricing power, you understand the stock. BUT.. nobody can understand that, and, from the minimal insight I can gleam into HOKA... it appears it’s losing a bit of its grip. But.. I have no clue.. I just cold messaged a run-club on Instagram that kinda know.

You can’t predict the brand success.. but you do know ppl will need to keep buying shoes, and they have some of the strongest operating margins in shoe apparel, plus 0 debt, 1.5b cash, a CEO proving themselves 2 years in a row, and a margin of Saftey on PE.

I think it comes down to LULU v URBN v DECK.

Due Diligence

So... I even messaged Run Clubs on instagram asking about trends, and Hoka momentum. This is the common answer I see online, and in small research sample, ‘had it’s time.’

And the whole thesis on DECK is that it keeps growing 16% YoY rev with Hoka brand. Though, even if it drops to 10% you’d still get your money back in 10-14 years. But... I don’t think I want to own Hoka and Ugg for 10 years. Although, if I think about it, there’s a high probability I’ll still own Ugg in 10 years. I just buy new pairs of the same slippers when they get worn. But Hoka... I actually think the cushion causes more headaches than it solves because they’re not as stable for balancing exercises, and they don’t strap in to bikes/rowers very well (they’re so bulky).

So unfortunately, I think this DECK is a pass for me. And it’s already up 7% since I started writing this article a few days ago. But oh well, I just don’t buy the decade-long trend here.

Checklist

“”No wise pilot, no matter how great his talent and experience, fails to use a checklist.”“ MUNGER

Here’s some notes to myself that I re-read before investing:

You gotta pick. And you gotta pick right.

The point of investing is to always be able to take advantage when prices are attractive

If you wake up and think the market is bringing you opportunities rather than you are giving advice from the market, you’ll be successful

The market is the most abiding thing in the world if you just let it be. Unless it’s a great deal in a great price do not buy it.

The price almost ALWAYS finds its way lower somehow to your buy price. You keep thinking it won’t happen, or you’ll miss it, and you trick yourself into thinking the solution is “just buy it now.” That is a shitty fucking reason to buy something.

Just get to know a COMPANY (not just a moment of opportunity) really really well. Then apply common sense to it.

———

Value is the # if you’re all-knowing about the future and could predict all the cash, discounted at proper discount rate, that is value of a business — in other words the only reason to lay out money now is to get more later on. The cashflows are printed on a bond. Not on a stock certificate.

Warren Buffett’s method: find 1-2 factors that make or break the business, study historical numbers obsessively, and set a simple target — “I want 15% on this investment, day one.” No DCF models required.

~DON

Www.LinkedIn.com/in/donstein

substack.meetdonstein.com

Views

Pretty much every stock I write about goes straight down right afterwards. So do not take this as investment advice, take it as myself trying to learn how to analyze companies.

Meta Platforms, Inc.

👉 This article was originally written July 8th at 3 PM on X.

I feel I have an edge on Meta considering I worked there during the peak of the Metaverse debacle. I should be able to analyze their Datacenter spend better than average, so, here we go…

52-wk Range: $520 – $796

Article Highlights:

1: “DeepSeek can copy model architecture. But... Nobody can copy 20 years of privately collected social-behavior and advertiser-performance datapoints.”

2: “In 2025, ad impressions rose ~12% while price-per-ad rose ~9%. Volume and price up together... the classic pricing-power signal.”

3: “Pershing Square built a ~$2B position (roughly 9-10% of the fund, their biggest tech bet) starting around Nov 2025 at an avg cost near $625/share. In their Feb 2026 investor presentation, they explicitly called it a “deeply discounted valuation for one of the world’s greatest businesses” due to AI upside not being fully appreciated. Druckenmiller, Norges Bank, and JPMorgan all added too I believe. Norges Bank (Norway’s sovereign wealth fund) are a long-term holder with a sizable stake (~1.17-1.2% of Meta).”

Every 90 days on Earnings, we all remember, “Oh! Meta is like the best most profitable business of all time.” And then the other 89 days we seem to watch those profits get thrown into a burning fire pit of money. The Oculus pit. The Over-hire pit. The Metaverse pit. The Datacenter pit is the next investor dilemma.

But IMHO, Datacenters are true monetize’able assets. A VR brick attached to your face is a research project. So given the proven datacenter market, and clear 30%+ Growth for Google/MSFT/AWS Clouds.... I think there’s a much higher floor for Meta’s datacenter spend than most give credit for.

We own this one, and our thesis is simple: this is a wonderful business that periodically goes out of style and then comes roaring back, run by a connected, technical founder who keeps making the right long-term bets (as ugly as it may look, sometimes).

Owners Earnings, Warren Buffett Method Cashflow Stats:

• $124B operating cash flow

• -$20b in D&A, -$25b in SBC... get us an Owners Earnings Cashflow of ~$80B

• At $1.5T market cap that’s 19x multiple

• Vs. Historical norms: Pretty much anything under 20x feels more than fair.

• Being fair — the risk arises from the next 3 years of FCF going to 0. But, given how depreciation accounting works vs cash capex, the Owners Earnings would still remain fairly strong. The argument agains the Free Cash Flow method is… DUH, everyone can see that. And stocks don’t move on obvious. So my initial buy thesis at $605 was based on giving more faith to the FWD Owners Earnings than the rest of the market.

Key Highlights

• The out-of-style / back-in-style pattern is the whole thesis. Meta grew from ~$27.6B revenue (2016) to ~$201B (2025) — a near-8x run with only one down year (2022, -1%). Each time the market declares it dead (privacy in 2021–22, metaverse waste, now AI capex), the core ad machine keeps compounding and the stock re-rates back up. This company has a LOT of leeway..... We’re currently in one of those “out of style” windows.

• A connected, technical founder still at the controls. Mark Zuckerberg founded the company, controls the vote, and has a 20-year record of big bets that looked reckless and then paid off (mobile, Stories, Reels, open-source Llama). Because of Zucks’ age, there’s a chance he could be at the helm for another 30 years as CEO. That would be something special, and vastly supporting the thesis for compounding IMHO. He’s also gotten politically connected this year, bringing on Dina Powell McCormick (ex-Goldman partner, ex-Bush/Trump White House) as President & Vice Chairman.

• Most likely the strongest personal data moat in tech. 3.58 billion daily active people, DMing, liking, etc... ~70% of all active internet users touch a Meta app monthly. The network effect, 20+ years of behavioral data, and advertiser lock-in (years of pixel/audience data, Advantage+ campaigns that improve the longer they run) are essentially impossible to replicate. DeepSeek can copy a OpenAI model architecture. Nobody can copy 20 years of private social-behavioral and advertiser performance data.

• Elite economics, real cash. 82% gross margin, ~41% operating margin, ~30% net margin, and operating cash flow that compounded from ~$50B (2022) to ~$116B (2025) — a ~32% three-year CAGR. For every $1 of net income, Meta generates ~$1.92 of operating cash flow. The earnings are backed by cash, not accounting.

• AI is quietly already paying off in the core. Advantage+ automates targeting, bidding, and creative and already handles

  $60B+

  in annual ad spend. In 2025, ad impressions rose ~12% while price-per-ad rose ~9% — volume and price up together, the classic pricing-power signal. The open-source Llama ecosystem (1.2B downloads) is crowdsourced R&D that flows straight back into the ad-targeting stack.

• Diversifying Revenue Streams. On June 3, 2026 Meta launched Meta Business Agent — the first time it has charged for an AI product — across WhatsApp, Messenger, and Instagram, billed on token consumption / Meta One tiers. This is the “second revenue vector” the bull case needed, attached to a platform of billions of users from a standing start.

Moving away from pure ads, it would be nice to see them mix services from companies via WhatsApp, or Cloud revenue. Personally, I vote they go heavy into Cloud.

Bought at a similar ~20x by quality buyers.

Pershing Square built a ~$2B position (roughly 9-10% of the fund, their biggest tech bet) starting around Nov 2025 at an avg cost near $625/share. In their Feb 2026 investor presentation, they explicitly called it a “deeply discounted valuation for one of the world’s greatest businesses” due to AI upside not being fully appreciated.

Druckenmiller, Norges Bank, and JPMorgan all added too I believe. Norges Bank (Norway’s sovereign wealth fund) are a long-term holder with a sizable stake (~1.17-1.2% of Meta).

Turning Negative to Positive?

Google was being attempted to be broken up when OpenAI launched GPT. And what was the largest threat and worst-case to Google’s business... ended up saving them in court, and gave them new life as a growth stock.

Meta, I foresee, will turn their extreme negative to an extreme positive. They’ll do so by growing a new revenue stream as a Cloud provider. Meta Cloud.

The “Negative”

• The capex is staggering and the FCF dip is real. 2026 capex is guided to $125–$145B (up from $72B in 2025), and a ~$30B+ depreciation wave is about to hit the income statement before those AI investments have generated returns.

The positive twist:

• It took AWS (first mover) 8-10 years to hit $10B

• MSFT took 6-8 years to hit $10B revenue.

• Google took 4-6 years to hit $10B revenue.

• Can Meta do it in..... 2-4 years!?!?!?!?

If the pattern of new entrants eclipsing $10B of revenue continues, it would suggest they could absolutely hit that within 4 years. Which would be wild, but not surprising as long as they start selling... like, yesterday.

Note, all 3 clouds are still growing 20-40%... there’s plenty of Demand for Meta to step in. If they just execute...

Key Risks

AI capex with no (direct) ROI — the central bear case.

• 2026 capex jumps to $125–$145B, nearly doubling, and Reality Labs still burns ~$4–$6B/quarter. A ~$107B step-up in contractual commitments hit in a single quarter. If Family of Apps growth decelerates while losses and depreciation balloon, the “profitable core funds the future” narrative breaks — and the stock gets punished regardless of headline revenue. This is why the stock is off its highs.

Litigation — escalating, not resolving.

• In March 2026 a California jury found Meta and Google liable in a social-media-harm case (Meta on the hook for 70%). The first federal MDL bellwether trials begin June 15, 2026, and Meta’s own 10-K warns these suits could “significantly impact” results, with potential “material loss.” Thousands of consolidated cases hang on these outcomes.

Regulatory overhang — reduced, but alive.

• The big one eased: in November 2025 a judge ruled Meta is not a monopoly, blocking an Instagram/WhatsApp breakup — but the FTC appealed in January 2026, so it’s now at the D.C. Circuit. In the EU, Meta took a €200M fine and a compliance deal rather than a total behavioral-ad ban. Worst cases are off the table; scrutiny is not. I’d also argue there are other potential risks amongst Global and Local govt’s.

Ad-revenue concentration + macro.

• ~97% of revenue is advertising. The revenue floor is unusually strong (10M+ SMB advertisers with no real alternative at their budget), but a tariff-driven recession squeezes SMB ad budgets first, and the Chinese e-commerce category (Temu/Shein, among the fastest-growing spenders) is a concentration risk if US-China trade tightens.

The AI frontier could slip away.

• Meta AI and Meta’s pivot to a closed model (Muse Spark) is unproven. If Meta’s strategy turns out to be a consumer dud, we’ll fully need to rely on Ad rev + Cloud rev to justify the datacenter spend.

• It now appears wise of them to roll their own model, as giving 20 years of data to Claude seems imprudent by Meta.

Btw, Meta dropped a new IMAGE gen model yesterday.. kinda dope!

Random image gen from new META AI chatbot.

Founder key-man / governance.

• Zuckerberg controls the vote, a strength (long-horizon bets) and a risk (no shareholder check if he spends without ROI again, as in the metaverse era). The whole thesis leans on his judgment continuing to be correct. Thankfully, he has a lot of wiggle room given strength of core ad business.

Risk Mitigations

“AI capex with no ROI.”

• This is where the income statement misleads. Add depreciation back and 2026 EBITDA looks better than the NI line suggests. AI is already lifting ad performance ($60B+ through Advantage+) and now has a direct revenue line (Business Agent).

“Litigation.”

• Even a multi-billion judgment is a dent, not a structural break, against a business throwing off this much cash.

“Regulatory.”

• The single biggest tail — a forced Instagram/WhatsApp breakup — was adjudicated in Meta’s favor in late 2025. The EU resolved to a fine-plus-compliance path, not a ban, and Meta is even launching WhatsApp ads in the EU. The remaining items are slow-moving appeals, not imminent existential events.

“Founder key-man.”

• This is the thesis, not a bug. The entire reason to own Meta here is a connected, technical founder with a 20-year record of unpopular bets that worked. We are deliberately betting on Zuckerberg — the mitigant is buying at a price where, even if he’s merely competent rather than brilliant, the business doesn’t lose money.

Margin of Safety

The margin of safety here is business quality plus a modest valuation discount relative to historical norms, and the market.

You always hear great investors say, ‘buy when quality is trading below market multiples.’ This was what led Seth Klarman to buy Google years ago. And seems like smart advice to heed for myself and Meta personally. NFA.

Management & Governance

Founder-led by Mark Zuckerberg — Chairman, CEO, and controlling shareholder since 2004. This is the heart of the thesis. Zuckerberg is a technical founder with a two-decade record of making big, unpopular bets — the mobile transition, Stories, Reels, and open-source Llama — that the market doubted and that paid off. He ended the open-ended metaverse spend when it wasn’t working, which is itself evidence of discipline beneath the bravado. You are explicitly betting on his judgment continuing to be right; his voting control means there’s no one to stop him if it isn’t.

Increasingly connected at the top. Meta brought on Dina Powell McCormick (ex-Goldman Sachs partner, ex-Bush and Trump White House) as President & Vice Chairman in January 2026 — a deliberate move to strengthen political and regulatory positioning. CFO Susan Li is widely regarded as excellent; COO Javier Olivan and CTO Andrew Bosworth round out the team (Bosworth is a watch-item given the metaverse track record, though the underlying tech is strong).

New Top Spot? Leader of Datacenter Biz

Look how Meta’s own blog introduces Santosh.

“At an organization as vast and complex as Meta, it’s hard to ascribe too much importance to any single executive. But it seems fair to say that there are few individuals as crucial to the company’s daily operations as Santosh Janardhan. Appointed head of infrastructure last year, Janardhan is Meta’s top engineering leader, responsible for developing and operating the hardware, network, software, and data centers that all Meta’s services run on. That means keeping everything humming for the more than 3.7 billion people who use Meta’s family of apps each month, while simultaneously laying the groundwork and vision for a highly advanced AI infrastructure to power the company’s products of today and tomorrow”

Later in the article, it then says...

Santosh: We have 21 owned and operated data center regions — each with multiple data center buildings the size of approximately four football fields put back to back. These structures are full of servers. So we have millions of servers, hundreds of thousands of miles of fiber optics. We also have an edge network — that helps extend our infrastructure in places where we don’t have data centers. And all of this is interconnected.

Of course, one of the challenges of operating at hyperscale is managing the inevitable outages and technical issues. The goal is to ensure that the people using our services never experience them. Day in and day out, billions of people use our products. And they’re not just using them nominally. This is how they connect with their loved ones, how they make their living, where they turn to communicate and coordinate services during emergencies. We’re the only hyperscaler that is not a public cloud.”

This line is fascinating.. “We’re the only hyperscaler that is not a public cloud.” We’ll be watching that closely.....

I think he’s a great candidate. Though, would be nice for them to have someone from AWS early days.

Board of Directors

The board includes Marc Andreessen, Patrick Collison (Stripe), John Elkann (Exor/Ferrari), Drew Houston (Dropbox), and Robert Kimmitt (lead independent director, ex-Deputy Treasury Secretary).

On the share register, Ackman (~9–10% of Pershing Square), Druckenmiller, Norges Bank, JPMorgan, and the passive giants (Vanguard ~8.8%, Fidelity ~6%, BlackRock ~5%) have all been buyers.

Financial Picture

^^REVENUE

^^NET INCOME

Net Income is distorted by one-time tax implications, so we’ve normalized those out:

That means, we need Meta to continue to accelerate YoY growth up from that 13% to maybe 17% over the next 3 quarters if they really are going to blow the top off of NI.

Considering their Revenue grew 33% YoY for Q1.... and they’re guiding roughly the same for Q2....

Q2 2026 revenue guidance: $58–61B

...it seems plausible they grow revenue 20-30% this year, and Net Income 15%+ as well. Given all the CapEx spend, those would both be HIGHLY encouraging to see in a ‘down year.’

((Random thought... Not betting anything on these, but they really did truly do a great job with the marketing for Meta Rayban))

Sell Triggers & Thesis Breaks

We buy wonderful businesses and hold for as long as we can; we sell only when the thesis breaks, and trim only if the multiple gets absurd. Specific breakers to watch:

• Capex without returns. And no Cloud layering.

• The AI strategy proves wrong.

• A structural ad shock.

• Litigation goes systemic.

Framing Quotes, and Whether They Actually Apply

“Reversion to the mean constitutes the most powerful force in financial markets.” — Jeremy Grantham

How it applies: This is the thesis in one line. Meta’s whole history is reversion: 2022 crushed it, then margins and the multiple snapped back; today AI-capex fear has it ~22% off highs and near its average P/E (below it, adjusted). If the business keeps compounding and the fear fades, the multiple reverts up — the “out of style → back in style” pattern we’re explicitly buying.

But it might not be true. Reversion cuts both ways. Maybe the ~28–33x peaks were the anomaly and ~20x is the new normal for a maturing, ad-concentrated, capex-heavy business facing real legal and AI risks. The “mean” it reverts toward might be lower than the one we’re anchoring to — and a permanently higher capex base would justify that.

“The main thing to do is find wonderful businesses, buy them, and sit there.” — Warren Buffett

How it applies: Meta clears the “wonderful business” bar by almost any measure: 82% gross margins, 3.58B daily users, the deepest data moat in tech, and pricing power (impressions and price both rising). Founder-led, fortress cash generation, bought at a fair-to-good price — this is a sit-on-your-hands compounder, not a trade.

But it might not be true. “Sit there” only works if the moat is durable. And if I can actually hold on. If AI assistants replace the social feed as how people consume information, or if the frontier-model bet fails, Meta’s attention-and-data moat could erode faster than its 20-year history implies. We’ve never actually seen the feed disrupted; we’re trusting it won’t be on Zuckerberg’s watch.

Value?

1. $1.55T market cap

2. $125B cash from ops

3. $70-80B of owner earnings

4. 19-21x O.E. Multiple

Roughly 5% OE Yield, growing 30% rev, engagement of products also expanding quickly.. and the wild card that puts this over the top would be a successful Cloud business.

They have $240B Equity, about 28% historical ROIC, and are pumping all cashflows back into CapEx. We should see an expanded ROIC if they do cloud correct given the Big 3 all have operating margins above 30%. And Meta could over deliver considering how well AI is working to ad’s already.

I’m optimistic about Meta’s ROIC if they end up monetizing these datacenter with a mix of Cloud and Meta AI... but we need to watch next earnings closely.

Don

Www.LinkedIn.com/in/donstein

https://x.com/donversationz

MSFT lays off 5K employees

High Yield Credit Spreads Remain Tight

Global Markets Barely Move, but lean Red

Market Narrative Catalyst This Week

Monday, July 6 (Today)

• 10:00 AM ET: ISM Services PMI (June) — The big one. Services is ~70% of the economy.

  • Previous (May): 54.5.

    • Consensus hovering 54.0 to 54.3 range.

      • Soft print = growth worries + higher rate-cut odds

      • Hot print = sticky inflation pushback on cuts.

• Fed Governor Waller speech (afternoon) — fresh commentary layered on top.

This sets up as a day to fuel the ‘rate cut vs no rate cut’ narrative.

Tuesday, July 7

• 8:30 AM ET: U.S. International Trade Balance (May)

• Weekly jobless claims.

• Wholesale inventories data.

Wednesday, July 8

• FOMC Minutes (June 16-17 meeting)

  • Highest impact item of the week

  • This is the first minutes under Warsh.

  • Markets will parse every word on inflation path, labor market, and rate-cut timing ahead of the July 28-29 FOMC.

  • Any shift in dot plot thinking or balance-of-risk language moves yields and risk assets fast.

This sets up as a second day to fuel the ‘rate cut vs no rate cut’ narrative.

Earnings Catalyst This Week

• Thursday

  • PEP (PepsiCo) — BMO

  • PGR (Progressive) — BMO

  • WDFC (WD-40) — AMC

• Friday

  • DAL (Delta Air Lines) — BMO

  • H (Hyatt Hotels)

Portfolio Review

: Refueling America’s Strategic Stock Piles

Wether we like it or not, the world is a dangerous place. And the best form of protection is prevention from attacks. That requires all sorts of tech and materials in order to keep us safe on a daily basis.

99.99% of us don’t think about the fact that on a daily basis we would be in harms way if it not for incredible USA intelligence and defense. So my investment into UAMY isn’t a vote for war, it’s a vote for further peace.

There’s a mineral called Antimony. It’s mined in China, South America, etc… almost 0 in USA. And then once you mine the ore, you need to put it into a smelter to refine it.

Why is Antimony important? It’s chemically mixed into ammunition to harden the materials. Antimony is a critical mineral used in munitions, weapons systems, flame retardants, & electronics So I thought to myself, the USA has said our ammunition stock piles are low… meaning big Trump daddy needs to buy a lot more stock piles for the military.

But… China has stopped selling us antimony. And the USA has no way to create it.

So I found the only the main (and essentially only significant) fully integrated antimony mining + smelting/processing company operating in the US right now…. And on a podcast the CEO said, ‘oh yeah I was talking with Don Jr. the other day…’

So I’m like hm….. I bet that Trump is about to buy a ton of Antimony from this company.

The CEO also noted to keep up with demand they’re going to push back renovations on facility so they can keep it operating at capacity.

• They also commissioned expanded smelting furnaces at their new Thompson Falls, Montana facility.

Last week —> They announced a press release that the government is buying 250M worth of Antimony from them… and they just delivered the first 50M. Stock went up 5-10% in value in 2 hours on the news.

$245 million (sometimes cited ~$248M) sole-source, 5-year IDIQ contract with Department of War. IDIQ meaning they can order up to that 250M, not that it’s required. So not as solid as money in hand… however, the contractor (UAMY) gets the sole-source award, which means they’re the only approved supplier for that specific antimony ingot requirement.

• First physical deliveries happened in Q2 2026: ~82,000 pounds of antimony metal ingots shipped.

• Total government orders to date: $57.3 million under this contract.

  • ~$2.6 million invoiced in June from those initial shipments.

So now USA will get our ammunitions inventory back, and this company is basically the only one in the USA as of 2026 that can provide it to us.

Great video if you want to meet the UAMY CEO

They’re also going heavy into Antimony exploration in Alaksa, and expanding into Tungsten (second hardest mineral behind diamonds, used for submarines, tanks, shields, etc..).

Around 2:30-3:00 in that video, Gary says something to the tune of, “we bought a property in Canada last May. And did enough work to get a third party resource report, and it shows $4.6B of future revenues from that property. So we are on a fast track to get that up in operation.”

So their current supply is becoming increasingly more valuable, and, they’re adding alternative revenue sources from other valuable assets and minerals.

Gary Evans, Perfect CEO:Market Fit

Prior to UAMY, Gary was CEO/Founder and scaled from $0 to $2B. He built Magnum Hunter Resources Inc. (MHRI) for ~20 years.

• Founded the company in 1985 with just $1,000 near the bottom of an oil price crash. Built it into a NYSE-listed energy company focused on unconventional resources (Appalachian Basin, Eagle Ford, etc.).

• Sold it in June 2005 for approximately $2.2 billion

Fundamentals Breakdown

Strong Revenue Doubling YoY

This company did $14M in 2024… doubled it to $39M in 2025…. and Gary is guiding for $110M+ revenue in 2026 (doubling yet again).

In addition, the quality of that $110M is supposed to be roughly $60M+ from DoW. Those should be fairly sticky as USA shifts material sourcing/processing from China to on-shore.

On the most recent earnings call, Gary said:

“...I’ve looked very hard at our $125 million revenue guidance for this year. I’m convinced we can do it. And you’re seeing that occurring now with deliveries to the federal government. I would say $75 million to $95 million of the $125 million will be federal government shipments of antimony ingots by the end of the year.

And with the ramp-up that’s occurring now, with the additional inventory we built with additional antimony supplies coming in, I’m highly confident that we can make those numbers.”

So if we rely on that $100M rev, then 10x Sales for a company growing 100% YoY on Revenue seems like a bargain, but ONLY IF, they can double once again in 2027.

Btw, they have no net debt also. And actually have a positive cash position, this is great news for a company who you’d think would be CapEx heavy. I think it shows efficiency. And no preferred stock. Nice set up. Only 100 employees as well. Efficient.

And tangible book value per share has grown nicely.

What are the replacement costs of assets?

1. Thompson Falls / Sanders County, Montana

Antimony Smelter & Processing Facility (Flagship US Asset)

• Only permitted/operating antimony smelter in the US

2. Fostung tungsten project in Ontario

Bought the Fostung tungsten project in Ontario for $5 million in June 2025.

In March 2026, they released a technical report that shows an Inferred resource of 14.62 million tonnes grading 0.17% WO3. Using the tungsten price at that time, they calculated the gross in-situ value (raw metal value in the ground) at about $4.6 billion

• This is an Inferred resource — the lowest confidence category. It’s based on limited drilling and needs a lot more work to prove it’s actually economic. Still…..

The US has produced almost no tungsten domestically for over 10 years. According to the latest USGS data, there has been no commercial tungsten mining in the United States since 2015.

3. Investment/Ownership 10% stake in Larvotto Resources (an Australian antimony/gold company)

They bought the shares on the open market in October 2025 for $37.2 million in cash

He admitted strategic partnership idea is dead, and now he’s just waiting to exit at right price.

Adding it all up: $800M?

I estimate about $150M in tangibles between land, machines, smelters, roads, Govt contract for $240M, etc.

Another $100M in intangibles between Gary’s background, team of experts, Govt relationships, permits, etc..

So $250M in tangibles + intangibles.

And then we need to factor in two more expenses: TIME, and CASHFLOW.

Time

Starting with time, a new entrant would need to gather permitting (air, water, hazardous waste), construction of furnaces, scrubbers, refinery. Securing supply chain feedstock, they’ve had to get around the fact China controls most of Ore supply. So let’s say at least 2 years, likely more. Let’s say $50M worth of time.

Cashflow

Let’s anchor it around Gary’s $125M in 2026. And, the $245M DLA Contract.

DALLAS - United States Antimony Corporation (NYSE:UAMY) delivered its first shipments under a $245 million supply contract with the Defense Logistics Agency during the second quarter of 2026, according to a press release statement.

The company shipped approximately 82,000 pounds of antimony metal ingots in two initial deliveries, generating roughly $2.6 million in invoices issued to the DLA in June. Two additional shipments await government inspection and authorization. The company has received total orders of $57.3 million since the contract began.Investors have responded enthusiastically to the contract progress, with shares delivering a 269% return over the past year and trading at $7.26 with a market capitalization of $1.08 billion. The stock has gained 45% in the last six months alone. Analysts project the company’s price could reach between $11.75 and $14, according to InvestingPro data, which tracks over 1,400 US equities with comprehensive metrics. (https://www.investing.com/news/company-news/us-antimony-begins-deliveries-under-245m-defense-contract-93CH-4770359)

As they become more vertically integrated, they’ll cut into one of their largest cost, which is securing the Ore from all over the globe. Once they can mine it themselves, gross margin at scale (once in-house Montana ore + expanded smelter running) should be 25–35%.

This vastly improves the current Q1 2026 gross margin of only 16%. They’re still stuck on expensive purchased ore. The 23% gross margin level from late 2025 is a good benchmark for what “normal” looks like before the big government contract ramp and in-house production fully hit.

So let’s say this year we do 19% (in the middle), on $125M that’s $23M in operating income. And they spend $25m/year on ops, so it should put the company near break even on Net Income.

Now looking at this from a Cashflow basis…

It’s tough to see it generating more Cash from Ops than CapEx.. so we’ll say FCF negative against next year. Which is yellow flag, but can be justified given they are small company in growth mode to satisfy clear demand.

And if we use Buffet’s Owners Earning logic.. they’re probably doing between +/- $10M away from breakeven.

Then we can back into thinking they have $25M of Net Income in 2027 based on scaling 100% Revenue again.

$525M of market cap. Plus the $300M we valued everything else at.

So maybe you can justify this by the numbers as a $800M company.

Price Action

You can see that in early June it broke below it’s 200 day moving average. That’s when I started acquiring it. I’ve been watching it for ~6 months now. It held strong on the 200 day up until this last month. Why did things change?

It’s also worth noting, the small cap mining ETF also broke it’s 200 day about the same date. So it’s likely an overall sector rotation as hard-assets decrease in demand as dollar strengthens?

UAMY Q1 2026, Missed Revenue, why?

Revenue for Q1 26’ was expected $12M.. yet revenue was reported as slightly down YoY ($6.8M vs $7.0M in Q1 2025), and 50% below expectations. On top of declined revenue, their gross margin collapsed from 34% → 16%.

So how does revenue stagnate, yet margins also get hit:

• Buying inventory = Cash going out to purchase raw ore/feedstock.

• Revenue = Only recorded when they process the ore into finished antimony products and ship/sell it to customers.

So the lag makes this slightly harder to underwrite.

From the official press release:

“Gross margin of approximately 16% ... primarily reflects higher antimony cost per pound sold ... as higher-cost ore moved through cost of sales. Q1 2026 gross margin did not benefit from any of the processing of the Company’s in-house antimony mined in Montana or from any antimony deliveries under the Company’s contract with the DLA. Both of these events are expected to begin contributing during the remaining quarters of 2026...”

Since then, they’ve delivered positive updates (first government shipments, furnace commissioning, etc.), and the stock has been choppy but trying to stabilize in the $7–8 range. Their in-house mining of Montana Ore at Stibnite Hill started April 2nd.. Q2.. and the New Thompson Falls furnaces should be up and running by end of June. So this next Q will see minimal benefit from these assets, though all very very promising.

Based on the work I just did, $800M feels like a fair entry price to me (including slightly recovered margins). It’s at $1.1B right now. So is it 27% above fair price? I mean… fair price is highly subjective.

The real value of this company is the rarity of their solution in 2026/2027.

What UAMY Does That Almost No One Else Can Right Now:

• Full vertical integration: Mine antimony ore domestically → mill/concentrate → smelt/refine into finished products (antimony metal ingots, oxide, trisulfide) ready for ammunition, flame retardants, etc.

• Operate the only significant permitted and operating antimony smelter in the United States (Thompson Falls, Montana).

• Hold the sole-source $245M DLA government contract for defense stockpile ingots.

🫱🫱 If you are an accredited investor, and want to get a full breakdown of my portfolio of 20 positions, submit your email here

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100K+ Substack Stats!

Thanks to all of you who have been supporting this weird newsletter so far! We just passed 100K views for the year.

Shout out to all of you 90+ people who liked this X post of mine:

Thank you as always for engaging! And thank you to Nick and Adam for subscring!

New Readers Get Featured in Next Week’s Edition:

For those of you who care, driving back up to Tampa for another date with her!

And then 5 of my friends are driving up Friday and we’ve rented a BNB for July 4th.

Hoping you all had a wonderful weekend.

In today’s edition we have a few cool treats.

• A 75 minute podcast with myself and my two friends. Hemant and Chase. H and Chase are two of my best friends from Draper University (shoutout Tim Draper and Adam Draper))

• My Good DEED of the week! I helped my house cleaners get a new dog for free!

• Overview of our fund performance this past week (tough week for markets, but I’m optimistic!)

Podcast: Finance Friends, ep. 1

“Chase Builds a Datacenter.”

You may catch our convo here.

Chase lives in Arizona and has strong connections within Real Estate and land permitting.

So he’s the perfect person to be building a new datacenter. He found the power generation partner, and the datacenter operator, and he’s bringing the land and permits.

You can see their rendering below.

Provide a caption (optional)

And thanks to Kinder Morgan ( ) he’s going to have a natural gas supply which enables them to generate power right one site. 100’s of MWs.

You can see the three circular dome buildings are the power generation station, and the smaller units to the left are the cooling racks and GPU units.

Really cool what he is up to! I suggest you watch the episode.

Free Dog, anyone?

Every single time my house cleaners come over (not that often!! I am clean!!!), they play with my dog for 25 minutes. They love my dog.

They always ask me if I ever know where to find a similar type of mini doodle.

Well! I got word of a doodle that needed a home. So we figured out a way to get them a dog for free!!!!

This morning at 9:30 AM we connected them to their new pup, and they all look so happy!

Aw amazing day! :)

Alright Dates, Datacenters, Dogs… enough with the D’s.. let’s start talking M’s!

Fund updates below.

Fund Performance vs SPY

On 6/16 I started tracking myself vs the each day.

I was mostly cash up until 6/16, and then assuming a pullback because of the 10+ week bull run, and because it’s end of Q.. I decided now was my time to take my shot.

And so I’ve been buying the SPY dip.

We formed a double helix.

I made a handful of mistakes this past week. Primarily, bought MU and MRVL and SMCI near the local top. I knew it wasn’t a great price, but let FOMO get the best of me. This has become more rare. That being said, I’ve fully recovered on

, and looking like it’s next.

It was tough... I almost sold.. but rather than panicking out of them... I bought the dip when it felt most painful. I scooped up some MU below $1,100.. which feels like a great move now, but felt awful at the time. And because of that perseverance, it’s canceled out my losses.

However, SMCI just had their office raided by the Taiwanese government an hour ago. So that’s crushed the stock today. If I had not bought more prior to this, I’d be a buyer.

Their growth, Elon partnership, and company history would suggest it’ll be volatile, but worth it for me.

That being said, if this turns out to be worse than I expect, I’ll sadly have to cut losses. But I don’t feel we’re at that moment yet.

-_-

My plan going into the last week was to get ahead of the July 1st re-balancing that wad sure to occur. And, it did. Most hedge funds have allocation requirements, and so at the end of a quarter they must get back to target allocations.

So if they had bought at $195 in April, and it grew to $240 by June 20th, then that profit likely puts them over allocation. Therefore, forced selling must occur at the end of the quarter to rebalance. And since all of Semi’s have run up hard this past Q.. that means a lot of forced selling in tech/semi.

My thesis on 6/16 was to buy that from them. And so, that’s what I’ve been doing all week.

I’m very nervous. But it’s better to buy into weakness than strength IMHO. MU rallied hard today, looks like it stabilized. And I expect MRVL or/and SMCI to do something similar by Weds.

We also have a short trading week, as Thursday is 1/2 day, and Friday is American’s 250th birthday!

Besides my AI mistakes.. I also made some smart moves.

I’ve been in Dave since $240, it’s now $350. And my investment into is seemingly smart now that AI power gen is so necessary. A lot of my other boring names worked also, like + +

Key Lessons

I’ve spent a ton of time refining my investment process, I continue to simplify it.

Leading with common sense, and then pairing it with one main filter, “this is a really great price.”

If I don’t think it’s great, or if I think it’s an ‘okay price’ then just pass. And, wait.

After studying 100’s if not 1000’s of company financials in depth, I’m starting to get a good feel for value. I should be able to make decisions based around, “is this a great price, or not?”

The challenge I got myself in to is that some of the ones I purchased above a great price, have now re-traced to a great price. And so I can either invest more, do nothing and hope it turns up, or cut losses and say that’s a mistake which should cost me.

I’ve made no significant moves in the last few days, because I’m trying to remain Zen. I might’ve paid a bit too much for some of these AI ones, but also if the growth continues, then they’ll all pop on next earnings call.

Arguing with Grok

I was DM’ing my deck to randoms on X, and got temp. banned for ‘spam.’

I then had to argue with Grok for the next 3 days.. aka, argue with ‘customer service’ to let me back on. You have no clue how frustrating it is trying to chat with an AI who will not listen. But we got it done! We are back!!!! FOLLOW HERE!

https://x.com/donversationz

Can’t stop, won’t stop.

~Don

I’m writing this Thursday, but have a second date this weekend in Tampa, so hopefully by the time you’re reading this Monday that will have gone well :)

(Full article available here on X)

Today’s note covers three topics:

1: A poem by James McCrae

2: An update on our fund

3: Insights on Natural Gas and LNG

Email don@virtualrealityinvestment.com or DM me on X with interest to come pitch your stock idea on Friday. I’m working to schedule our second episode on Friday, ping me to join us!

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‘Instructions Before Visiting Earth’ by James McCrae

I heard this poem the other day (featured at the end of the paragraph), and thought it was really quite cool. I wanted to share it with you all in case it resonates.

I believe in a central source of universal knowledge. See theories like Morphic Resonance by Rupert Sheldrake.

In short, he proposes that nature possesses a collective memory. This explains why turtles inherently know to walk towards the water when born.

And this theory applies to humans, it reframes our brains from being thinking machines into being antenna like receivers.

We receive signal from a central source (much like the Cloud and AI).

This poem below hits on that theme.

For all my XR fans out there.. you’ll immediately pick up on some of the jargon.

“3D simulation” and ‘fully immersive.’

I thought it was a cool poem, hope you enjoyed.

Fund Update + Investing Lessons

I took the gloves off.

Realized I was being overly technical and rule-oriented. That’s not my natural state.

I’m in the ring now, but before I get into the strategy, let’s rewind the past few months.

I tried 3 distinct investment styles over the past 12 months, each was a VERY healthy exercise to do.

3 Investment Style Experiments

They were as follows: value-oriented vs policy-oriented vs narrative-driven

1: Can I do a pure play value-oriented buy-and-hold Warren Buffet style?

2: Can I do a disciplined policy-oriented deployment David Swensen style?

3: Can I do a narrative-driven trading practice Stanley Druckenmiller style?

I’ve been really truly putting in the hours of studying all the various styles, and trying them out.

I’ve meticulously built strategies, ripped them down only when I felt it wasn’t for me.

There were three pivotal moments, in chronological order.

1: “ADBE is a value play.”

It’s not.

This is ADBE’s 5 year chart, and it’s still going down.

I looked at the numbers and thought they were superb. Everything a ‘value’ investor looks for.

Strong ROIC, low capital intensity, 10%+ owners earning yield, minimal debt, proven track record over decades.

So many good things.

And then when they reported their numbers this week, which are very strong, it dropped like a rock.

Investors hated it. But I’m a value investor, I thought ‘the market’ should not matter?

Well.. let’s be honest with ourselves, I’m probably an average value investor at best.

I love the principles of value investing, but sitting through a 65% decline for years, while the market rips…. something is off. Obviously, I am not understanding something fundamental.

And this is what I wasn’t understanding: value is subjective.

A company doing $100M profits, growing 50% annually, but trading at a P/E of 100, should still be considered more of a value play than a company doing $5B profits, growing 12%, and trading at a P/E of 10. Wait a minute… that doesn’t make sense!

That is literally comparing a trendy stock I’m watching to Adobe. By all means, the latter is a much stronger company, and on the surface clearly the better investment.

So then… why didn’t it work?

Because beauty is in the eye of the beholder. Value is subjective.

SpaceX is trading at $1.5 Trillion… and losing money hand over fist.

But Elon has fans, and the lure of Space travel triggers imagination.

And capturing imagination seems to hold as much, if not more value, than just today’s numbers.

We can get more into all this, as I have millions of thoughts, but I’ll sum it up by referencing the Efficient Market Theory.

Efficient Market Theory

This basically says that any information available today, is already priced into the stock.

Therefore, you find value by having an insight of the future which differs from the mainstream.

And since stocks are mostly 100% efficient, your returns over time are directly correlated to the delta between your view of the world and the market’s. Finding niche’s enables you to widen that gap.

Speaking of gap…. I also want to note something VERY interesting.

As I’ve been questioning the ‘value investing’ concept, I thought it smart to study the history of accounting.

Primarily asking myself, was it easier for Buffett to find obviously value in the 1960’s than it is today?

GAAP History

The Depression happened, and coming out of it every company had different accounting practices.

What a nightmare.

So the SEC was formed in the 1930’s, and by the 1960’s they had almost finalized rules around Depreciation.

Think about that….. one of the most important fundamental concepts in our accounting system, wasn’t even fully fleshed out until half-way through the 1900’s.

So when Buffet comes onto the scene around that time, his ability to study new concepts creates a massive advantage.

And Benjamin Graham in the 1930’s was able to find value.. because literally there were companies trading below their liquidation prices.

But in a world of AI, internet, X, and speedy information…. not to mention algorithm trading… there is NO way that those same advantages exist today.

And so… you really have to think about… WHAT IS THE MODERN EDGE?

Bringing this all back to Adobe

The stock is missing what I might be now starting to consider the most important aspect of investing in public equities.. Adobe was missing a durable growth narrative.

I will skip over the obvious issues like it’s CEO and CFO have stepped down…

The market can look past that under the assumption they pick a great leader.

But the “durable growth narrative” relied entirely on ADBE accelerating it’s growth.

So when they reported that Net New ARR decelerated for the first time in 10 years….

That breaks all hope for the narrative.

So I’m not necessarily saying Adobe is a bad bet, it’s certainly a more reasonable price than ever before, but that is in comparison to the durable growth we came to expect. If there’s already starting to be chinks in the armor… then investors are pretty smart, and it’s likely this company grows, but never again achieves its 25% YOY growth across all vectors.

The only hope for the rebirth of that narrative is their AI product becoming indispensable, and unable to be copied. Which is a tough sell in a world of vibe coding and pools of AI devs all across the world.

The lesson I took from that = GREAT MODERN INVESTMENTS ARE A MIX OF NARRATIVE X GROWTH NUMBERS.

2: Buffet + Munger Clip

I’ll keep it short. But I heard a clip from the 1990’s where they shared their investment process of identifying value.

Munger said, “we got subpoenas for our staff notes.. but not only do we not have notes, we don’t have staff.”

And the crowd laughed.

But really think about that…..

They just sit there all day talking, reading, studying. They’re not running complicated DCF Excel equations, and they’re not pretending they can be so precise.

As Buffet later says, “I’d rather be generally right than precisely wrong.”

He is looking for things that are so obvious that he doesn’t need a note pad, and he doesn’t need to run precise numbers, because it’s so obviously a good deal.

The discipline to wait for that is what makes Berkshire an iconic brand.

Buffet goes on to explain that he just does basic back of napkin math in his head, and thinks.

The lesson I took from that = GREAT INVESTORS USE COMMON SENSE AS THEIR PRIMARY TOOL FOR DEPLOYMENT.

3: Howard Marks book

I’ve been reading voraciously this year. And so I thought it would be helpful to myself (and maybe you) if I read a chapter from my fave books.

This helps embed the ideas deeper into my subconscious.

My friend Corey said he was cracking up when watching it. I re-watched… and yes it’s a bit more of a comedy show than just a chapter reading.

And when I read the first chapter of Howard Mark’s book, it became quote clear by the end of page 2 (1:30 - 3:41 in the video) that he specifically calls out, and emphasizes, the idea that investing should be intuitive, not formulaic.

Key Topics Covered:

• Introduction to the book (0:00 - 1:29): Introducing Howard Marks and discusses quotes from Benjamin Graham, Albert Einstein, and Charlie Munger regarding the difficulty of investing.

• Investing as an Art (1:30 - 3:41): Discussion on why investing cannot be fully routinized or reduced to simple algorithms because markets are psychological and unpredictable.

• The Goal of Beating the Market (3:42 - 5:35): The creator emphasizes that to achieve above-average results, one needs superior insight rather than just luck.

• Second-Level Thinking (5:36 - 8:02): The core concept of the chapter. First-level thinking is simplistic and superficial; second-level thinking is deep, complex, and considers the range of future outcomes, consensus psychology, and how to position oneself differently.

• Examples and Framework (8:03 - 13:58): The creator applies these concepts to a stock (UAMY), discusses the importance of having non-consensus views, and explains a matrix for understanding conventional vs. unconventional behavior in the market.

• Conclusion of Chapter One (13:59 - 15:35): The creator wraps up the discussion on why first-level thinkers are common, which in turn creates opportunities for second-level thinkers to succeed.

That was the final puzzle piece I needed to hear.

I had been studying and studying and studying and studying for years, I’ve tried so many different styles where I ‘stick to those rules.’

But now I need to let loose.

It’s VERY similar to an athlete who practices all week, but then on Football Sunday they are trained to stop thinking about the technicals, stop thinking about the mechanics, and just go play.

Let nature and flow-state control you.

So that’s what I started doing on Weds.

And also built you all a really incredibly well done, and complex graphic showing the parallels of investing to football. :)

So that’s what we’re doing… letting loose. NO rules.

And ONE goal - make money.

Rather than making my goal to follow the rules.. the only concern should be if this trade/investment/thesis will make money.

I’ve been living by that, and things are starting to feel way more natural.

It is not yet showing in the numbers (although we made more money in 3 days than 2 months), but it is showing in my own flow state.

So let’s hope we can compound this, and continue building our own unique investment style crafted around who I am by nature.

3: Insights on Natural Gas and LNG

This is a long newsletter today. If you made it all the way, good for you!

I just opened the camera and started working-remote live.

It’s basically just me talking through my Natural Gas thesis, and researching (Cheniere Group).

Chenier are the largest LNG exporters in the USA, they bought the prior leader in 2015/2016 when they went out of business.

And you can see by this chart…. that was pretty great timing to get into the LNG export business!

I’ll save my breath since I assume almost none of you made it this far, but watch the video if you want to hear my raw thoughts.

p.s. Email me if you want to Pitch your STARTUP or STOCK Idea at our Friday Convo.

This is a GREAT opportunity to get feedback on your investment pitch from me.

I saw the All In Podcast hosted and episode where four fund managers pitch their Stock ideas like a startup.

I love that.

Like Shark Tank, but you talk your book.

Join us on our Friday livestream where you can pitch your stock pick as if you're on Shark Tank. We'll ask you a handful of questions after your pitch, and hopefully we can all see the value you've discovered! We'll also of course feature links to your social profiles to help you gain followers who appreciate your perspective. Apply here:

I’m looking for the next 2 people who want to pitch their stock on Friday.

Please email me directly if interested: don@virtualrealityinvestment.com

Hard to believe, we’re 50% of the way done with the 365 day exercise! Week 26 out of 52. Maybe we’re finally starting to find our identity :), below is a video interview for you, and an opportunity to pitch in our next one.

There’s also some really interesting data I put together about how Warren Buffett, Bill Ackman, and Druckenmiller weight their portfolio at the end of the email.

Email don@virtualrealityinvestment.com or DM me with interest to pitch your stock idea on video.

Introduction to Sue Ennis, and Video Recap

First off, let’s properly introduce Sue. She’s a legend amongst small-caps on Wall Street.

She’s raised over a billion dollars for North American structured products and small cap companies, transforming undervalued fintech and digital asset companies into multi-billion-dollar entities.

She has held pivotal roles at Shyft Networks, Coinsquare, Voyager, and Invesco.

I was honored to welcome her a second time for our Special Guest feature series — Thank you to for joining us for a LIVE chat last week!

We ended up having 200 live viewers on X thanks to Sue offering to re-stream it to her audience. Excellent!

The conversation is a very unique one. Sue was well ahead of the past few major trends. She was an early investor in Bloom Energy

She was an early bag holder of Hut8 as well.

And was a leading voice in crypto all the way back in 2017.

Said simply, Sue skates where the puck is headed.

She says it on the call, but it’s quite clear she has a knack for identifying under-loved early micro-caps, and helping nurture them to success.

So just wait until you here what she is up to now….

(Hint) I couldn’t stop giggling.

Full video here:

Pitch your Stock

Apply to Pitch your Stock Idea at our June 26th Convo

I saw the All In Podcast hosted and episode where four fund managers pitch their Stock ideas like a startup.

I love that.

Like Shark Tank, but you talk your book.

Join us on our Friday livestream where you can pitch your stock pick as if you're on Shark Tank. We'll ask you a handful of questions after your pitch, and hopefully we can all see the value you've discovered! We'll also of course feature links to your social profiles to help you gain followers who appreciate your perspective. Apply here:

I’m looking for the next 2-3 people who want to pitch their stock.

Please email me directly if interested: don@virtualrealityinvestment.com

Portfolio Construction: Research on Buffet, Ackman, Druck, and more.

My current investor challenge revolves around position sizing.

I’ve noticed Druck, Buffett, and Ackman all concentrate 50% of their capital into top 5 positions.

Druck is just a different beast given he trades options as well, but, still clearly concentrated above 40%. He concen-trades (get it!?)

So we know top investors concentrate heavy in top 5 positions. 10% in 5, 5% in 10.

On a 1.5m fund, that’s 150K x 5, and 75k x 10

I need to learn if they concentrate just in the top 5 then diversity the rest, in which case 75K for 10 is likely too much.

let’s see..

Hmmm. Ok very interesting.

EXERCISE OF PORTFOLIO ALLOCATION THEORY:

Everyone hovers their Top 5 around 40-60%’ish.

Next 5 around 20%’ish.

Rest of portfolio varies between 0-30%.

No matter how you chop it, the moral of the story is that great value investors concentrate highly.

That sparks two questions:

1. what are their top 1 and top 2 position %’s?

2. of the top 5, what was cost basis vs market value?

What are their top 1 and 2 position %’s?

Even zooming all the way in, we still find heavy concentration.

Doing the math of their % in Top 5, vs % in top 1, I’d estimate they concentrate about 30% of their Top 5 Capital into just their #1 position. Which makes sense because in all scenarios #1 is about about 15% of overall portfolio, and on average top 5 capital is 50%. So double the 15% to get zoomed in concentration.

Fund + Top 5 Concentration:

Now the question which remains... how did those Top 5 get there? By expanding or by initial position sizing? Let’s see.

Of the top 5, what was cost basis vs market value?

Bit more tricky to figure out.

So we see Druck’s largest position is a bit of a mess, trim add trim add. Snip snap, snip snap.

But still, overall the trend is from 415K shares to 3K shares. So It’s fair to say, at least for this position, he scaled in over time. 3 years actually. His initial position was about 10-15% of peak, and ending allocation.

Now let’s check Apple and Buffett.

Apple and Buffett. The entire Apple position was bought 2016 to mid-2018, and the single biggest purchase was Q1 2018. After Q3 2018, Buffett never made another meaningful buy

But more specifically zooming in on his initial positing sizing, and scaling, we see he toyed with the idea until he felt the moment was right. Then he intrestingly went in with his two largest buys 1 year and 2 years after first entering Apple.

He started with $1B, almost as if he only moderatly liked the valuation. Then went in big with $10B and $12B buys in Q1 of 2017 and 2018. Almost all of his buying happened in his 4 most active quarters. And, roughly a year after his first initial tiny buy.

Let’s examine one more, my other fave investor, Howard Marks. Marks’s largest is TORM ( ), the shipping company.

Howard Marks TORM position:

This doesn’t help us, totally different beast. He led TORM’s 2015 recapitalization and converted its debt into a controlling equity stake; it only showed up in the 13F in 2018 because that’s when TORM became a U.S.-listed security. So the position was effectively handed to them by a restructuring, and ever since, the story has been distribution, not accumulation

Hm...

Alright, so without going deeper, let’s use common sense to find the moral of the story so far.

Value Investors..........

[1] Concentrate Top 5 (50%)

[2] Concentrate Top 1 (15%+), #2 (10%)

[3] Focus very little capital outside of their Top 10.

Comparing this to constructing a Fantasy Football team.

You have your top 2 Staples up top at QB/RB/WR. I prefer most invested in QB, second most in WR. RB’s are amazing, but durability always a bit of issue. Though, you just want your #2 to be best possible available player in those two roles.

Then, depending on your first 5 key player positions, you orient the rest of your team to fill in those gaps. In case of injury, etc.

I’d think portfolio mgmt is similar in spirit. You orient the rest of your portfolio around diversifying from your top 5 concentration. You first round pick makes all the difference in the world, and your second and third are critical as well. Finding a sleeper undervalued player in the 5-9th round takes a good season to a championship season.

All the same for portfolio allocation. Pick your #1 player, orient the team around that.

If my #1 player is Meta, then I need to be thoughtful about drafting another Big tech in round 2 or 3 given it’ll be harder to find diversity later on in that scenario.

QB - Big Tech

RB1 - These are usually old reliable. Consistent every week. Going to get your points.

RB2 - Either old reliable, but not long term solution. Or, usually younger, potential to become great, but not proven yet.

WR1 - These are usually total stud high flyers. They’ll put up 30 pts in a week.

WR2 - Usually younger as well, these have the potential to turn your team into championships when they work out and help give you two WR1’s.

WR3 - Prefer the rear to be held up by a solid 10 pt / week kinda guy. Gets easier reception points, keeps it safe. Doesn’t wavier far from being consistently slightly above average. Don’t worry about these.

TE - This speciality role almost acts as a commodity. Their value totally depends the game script. But if you have a good one, and game script leans your way, then you’re golden for that week.

If I had to just run the exercise fast off the top of my head:

QB - Meta

RB1 - XOM

RB2 - FSLR

WR1 - CRM

WR2 - INTU

WR3 - ADBE

TE - VEEV

That is soo heavily oriented towards software, or, dependence on AI.

OK, Now back to META.

I’ve gotten far enough along into my research that I feel they qualify for my bar as a clear candidate for #1 slot.

They check all the boxes on my checklist.

And they seem durable:

But, as I said, how do we know how to scale in? Well, if we learned anything from the exercise, it’s more important to be confident that’s your #1, and you don’t need to go big early on. Buff took a year to decide on Apple.

Hm... this is interesting.

“Almost every week there are different companies that come to us from outside asking us to both stand up an API service or asking if we have compute that they could buy from us at some premium to what we’ve bought it at,” he said — adding that “if we get to a point where we feel that we have overbuilt, then that is an option that we have.”

I would love to see a Meta Cloud. But I don’t think Zuck wants to veer from consumer.

We just saw Elon get into the business, it would make total sense to me if Zuck does the same. Mark is great with observing and extending what works.

If you compare Meta to the other Mag 7’s over 5 years.. it’s clear Meta is farthest off it’s ATH.

FWIW, it still looks like by the stochastic it has some way to go down. A 10-15% drop down to its 50 day MA would be iconic.

I’ve got to listen to earnings call, as apparently that’s where he mentions the Cloud concept.

1: ATH FOA engagement

2: Meta AI, super intelligence labs...

3: Customizing own silicon with

Nothing much else interesting.

I want to move on to study others in portfolio. But my gut keeps telling me this is an opportunity more than I recognize.

On that prior earrings call, I see from the livestream stock dropped to $620/share from $670 upon the negative news. And it ended around $630. So that kind of makes me think Meta at $590 is $30 below where peoples gut reaction says it should be.

Let’s listen to the questions portion now.

Yep, first one right on the key topic that matters, ROIC. Zuck stutters....

First one, “Share about the level of investment and the measurement stick for the ROIC of Muse and other products?”

ZUCK (defensive... he should have real metrics for this): “The thing to make sure is that we’re building leading models and products. Our model is build products that can get to 1 Billion people, then focus on monetizing them at scale. We invest in models, convert to products, and then monetize those flagship products. The basic milestones I look at, are technical quality to enable a great product, then second, how is it scaling? and third, how’s monetization and how do we increase profitability? I don’t think we have a precise plan for how each product is going to scale month over month. But we have a sense of the shape of where these things need to be.”

Alright.. he’s glorious on the product hitting 1B users. Let’s test Meta AI then..

I’m going to have them analyze this blog before release...

Not off to a great start.

Yikes.

I’ve tried it 5x, keeps saying ‘something went wrong’

Ugh. This is the reasoning..

Ok it actually sorted itself out.

And caught an error in my math from this article.

So it already added value :)

I’m really curious on business model here. I would use this for free if they can become the most used product.

Wanted to see if Meta AI could code.

It freezes there.

Then I have to manually get it working..

But it is working! Currently, “running a subagent.”

Wow, cool. It coded and executed a live pricing calc for me.

So my takeaway.. this will probably end up as good as Grok, Claude, GPT. It’s nearly already there under the hood, just the UI/UX needs some real work.

But I understand what Zuck is saying as far as, ‘we’re focused on getting this to 1B users.’

This is essentially going to be the Google Gemini playbook. Attach a leading AI free chat service to a giant user base of billions of monthly users. That’s what worked for Gemini.

I bet it works for Meta AI.

And I also feel now that Elon launched a cloud service, Zuck will do the same.

Then he’s executing on the very formidable and profitable playbooks of Gemini (Google) and xAI Cloud (Elon).

Those aren’t confirmed, but if those narratives take hold I think Meta re-rates. But truly, impossible to predict or know.

And I do not think Zuck wants to go cloud, he wants to make META AI bigger than GPT. It’s just hard to imagine it, but how knows, maybe…..

I hope!

~Don

https://x.com/donversationz

I don’t expect a ton of guest, but I’m just curious if anyone cares to use Linkedin still :)

You’re Invited to come meet Sue and chat AI/Energy with Founders and Investors:

Hi Everyone,

If you can’t make the live call, no worries I will share video next Friday!

Hoping you’re having a great start to the week.

With my last business, Spatial Collective, we ran weekly invite-only virtual events with special guest speakers at each one.

I’m going to begin doing this again, but monthly, and slowly ramp up as I find the groove.

This creates two opportunities for you all:

#1 RSVP in the below email and attend our kick-off convo on Wednesday with Sue.

#2 Prepare questions you have about humanoids and electricity/energy, these are Sue’s expertise.

I’ll share more below.

But first, announcements..

Starting next week, I think I’m going to begin sending these emails every Friday instead of Monday, and they’ll be videos instead of write ups. ^.

^{RSVP for Weds Event}

We welcome back, Sue!

Sue was featured in our Week 11 newsletter. March 2nd.

At the time, she was the head of investor relations for Hut8.

Since that time, they are up 150%…..!!

Ugh, I wish I invested.

Since then, she has joined a NEW company.

RSVP to come learn what she’s up to, next.

This new business of hers is even more wild.

The last one was a AI datacenter play.

This new one is AI…. humanoids.

And the company history is going to make you giggle, this is sure to be a conversation you won’t want to miss.

~Don Stein

RSVP HERE

You might have already known that.. but when I read that fact it blew my mind.

Data shows the USA is slowly becoming the Middle East as far as production and exporting of our Oil & Gas? Wow. So I dove deep, and this is my personal and comprehensive analyzation for myself centered on the United States historic transition into the world’s premier natural gas and LNG exporter. This transformation is occurring against a backdrop of intensifying global competition, where nations are racing for technological and energy abundance to secure sovereign independence. By examining the structural countermoves between major world economies, I am evaluating how deregulation and strategic energy exports serve as foundational pillars for domestic economic growth.

USA v China: Chess from the Best

Modern international relations revolve around three imperatives: sovereign self-sufficiency, public safety, and a race to secure technology, fuel, and mineral abundance. Within this competitive landscape, the United States has deployed a multi-pronged approach to sustain its position. The federal government aims to dilute federal liabilities through economic expansion, protect regional semiconductor production via the Chips Act, and implement targeted tariffs to stall foreign rare earth dominance while building local processing capacity. Simultaneously, Washington enforces trade restrictions on energy flows from adversaries while utilizing regulatory deregulation and immediate tax write-offs to stimulate drilling.

Brief word from our sponsor

^{Last week I shared I was struggling with the fund, and investing. I sorted myself out, happy to report we are now in the green.}

Conversely, China has enacted countermeasures to challenge the supremacy of the US dollar. Beijing is accumulating gold, establishing a payment settlement layer in Switzerland, replicating proprietary software models, and promoting open-source artificial intelligence. To secure its commodity imports, China restricts rare mineral exports, enforces price caps, and enters long-term purchase agreements with Qatar, Australia, and Russia. Furthermore, Beijing deploys digital misinformation campaigns to exploit societal divisions in Western states.

This geopolitical polarization has established several core secular themes for the next decade:

• Computing and technology infrastructure

• Materials and mineral processing

• Military systems and national defense

• Power generation, storage, and distribution

• The United States as a primary energy exporter and self-sufficient consumer

• Reserve asset diversification (gold versus stablecoins)

• Uncorrelated holdings (healthcare, retail, and real estate)

Natural Gas is USA’s Global Advantage

The United States now produces more crude oil and methane gas than Saudi Arabia, converting liquefied natural gas (LNG) into a highly lucrative export asset. Methane shipments are expanding rapidly, marking the most accelerated export growth phase in American history. Supply projections indicate US LNG exports will reach 14 billion cubic feet per day (Bcf/d) in 2026, representing a 44 percent expansion from the 9.7 Bcf/d recorded in 2022. This flow is met by robust demand from Continental utilities, Asian customers, EUROPE!, and industrial consumers, with industrial gas use reaching a record 24 Bcf/d in 2026 to power petrochemicals, ammonia synthesis, and Gulf Coast manufacturing.

This structural shift is occurring alongside an unprecedented surge in domestic electricity consumption. For a decade following the 2009 recession, power sales in the United States remained flat, growing at just 0.6 percent annually despite a 2.3 percent annual GDP expansion. Today, this stagnation has ended due to the processing needs of artificial intelligence data centers. Projected demand from these computing facilities will scale from 31 gigawatts (GW) in 2025 to 75.8 GW in 2026, reaching 108 GW in 2028 and 134.4 GW by 2030.

This computing expansion is forecast to triple data center power consumption to 400 terawatt-hours (TWh) by 2030, introducing 240 TWh of fresh load to the electrical grid. This increment will be divided among multiple sources:

• Renewables: 50 percent (120 TWh)

• Methane Gas: 33 percent (80 TWh)

• Sun-powered, nuclear, and alternative sources: 17 percent (40 TWh)

While green energy will capture half of this load, gas-fired generation will double its absolute volume, scaling from 75 TWh to 155 TWh while maintaining a stable 39 percent market share. This indicates that natural gas is not a transitional bridge, but a permanent pillar of the technological expansion.

We’re going to need A LOT OF GIGAWATTS!

Strait of Hormuz Causes a Western Pivot

The vulnerability of international energy corridors was demonstrated when Iranian missile strikes targeted the Ras Laffan complex in Qatar and the Habshan facilities in Abu Dhabi. These actions disabled 12.8 million metric tons of annual export capacity, representing 17 percent of Qatar’s output and 3 percent of global supply. Because the Strait of Hormuz mediates 20 percent of global LNG and 25 percent of seaborne oil transit, a prolonged closure has removed a fifth of the world’s liquefied fuel supply from the market, with complete rehabilitation expected to require three to five years.

This supply vacuum has caused worldwide prices to surge to levels three to seven times higher than United States benchmarks, creating an immense economic incentive for export. Consequently, state-level buyers are turning to North America. Following bilateral meetings with President Donald Trump in Beijing, Chinese President Xi Jinping expressed interest in securing US oil and natural gas to bypass Middle-Eastern maritime risks. This interest represents a reversal of the trade dispute in 2025, during which Beijing had imposed a 25 percent tariff on US gas imports.

Venture Global and Cheniere Energy

+

VG is a founder-led, vertically-integrated exporter that has nearly doubled its EBITDA guidance for 2026 to a range between $8.2 billion and $8.5 billion, driven by the commissioning of its Plaquemines facility. Plaquemines is fully insulated from spot market volatility, with 13 long-term sales and purchase agreements covering 19.7 million tonnes per annum (MTPA) of its 20 MTPA nameplate capacity. Offtakers include transatlantic utilities like EnBW and SEFE, alongside Trafigura, Hanwha, Chevron, and China Gas.

To capitalize on this worldwide supply deficit, investors are focusing on Gulf Coast liquefaction terminals, where Venture Global and Cheniere Energy control five of the seven operating facilities.

While Venture Global fell out of favor due to a winter storm early in the quarter and delayed pricing benefits from the March supply shock, its fundamental metrics remain compelling.

The firm is trading at an 8 percent owner’s earnings yield, supplemented by a 4 percent expansion rate, and has achieved an 11.36 percent annualized return on invested capital (ROIC) over the past five quarters while generating $700 million in free owner’s earnings quarterly.

Mike Sabel, a former executive at First Sierra Financial, and Robert Pender, a former partner at Hogan Lovells, lead the company and retain over 80 percent of its common stock.

However, the asset carries distinct risks, including execution delays on its 36 liquefaction trains, contract arbitration disputes with Shell and BP, and elevated leverage. This contrasts with Cheniere Energy which employs a fee-based tolling model. Cheniere carries minimal debt, relies on a tenured corporate executive team, and acts as a lower-risk utility proxy, offering investors a different risk-reward profile.

Upstream Allocations in the Permian and Haynesville Basins

Because local computing facilities require colossal volumes of gas-fired power, forward pricing curves for gas have risen. To capture this trend, the portfolio has focused on upstream producers with premier positions in the Permian and Haynesville basins, located near exporting hubs.

EQT Corporation () is the foremost gas supplier in the United States. Led by Toby Rice, EQT is the chief beneficiary of utility demand from the Virginia data center cluster due to its extensive Appalachian pipeline connectivity.

Similarly, Expand Energy () represents the biggest gas producer in the country following its recent business consolidation.

Expand Energy maintains a balanced footprint across Texas and Louisiana, serving both export facilities and regional utilities. Legendary investor Howard Marks of Oaktree Capital Management holds a $575 million stake in Expand Energy, making it his second-largest equity holding.

Comstock Resources () offers a speculative play, holding the largest acreage position in the East Texas gas play.

Comstock has been led by CEO Jay Allison and CFO Roland Burns since the 1990s, and has received over $1 billion in capital backing from Dallas Cowboys owner Jerry Jones.

Midstream Networks and Pipeline Integration

The transportation of fuel is controlled by midstream operators. Kinder Morgan ($KMI) operates 80,000 miles of pipelines and 136 terminals, moving 40 percent of United States methane gas. Led by founder Richard Kinder, KMI provides stable cash flow.

Upstream of KMI, Williams Companies ( ) functions as an integrated infrastructure giant. Williams lately commercialized its $2.3 billion behind-the-meter Neo project, which will deliver 682 megawatts of dedicated capacity to data centers by late 2028.

WMB also signed the Atlas agreement to supply 164 million cubic feet per day of gas to Northeast computing hubs, alongside the Silver Spur pipeline expansion to serve Idaho. These contracts support WMB’s targeted 10 percent EBITDA compound annual growth rate.

For secondary hydrocarbons, ONEOK () controls the processing and transmission of gas liquids. Led by CEO Pierce Norton, who established ONE Gas as a separate entity in 2014, ONEOK derives its revenue from volume-based fees, protecting its balance sheet from commodity fluctuations.

EVERYONE NEEDS ELECTRICITY

Once gas is converted to electricity, it must be routed through physical interconnects. TE Connectivity () is a chief provider of this specialized hardware, selling connectors, busbars, and cable assemblies designed to handle the power density scaling of AI server racks from 10 kilowatts to 600 kilowatts.

TEL is experiencing robust momentum, with its data connectivity business tracking toward $2.4 billion in sales for fiscal year 2026. The company subsequently expanded its grid portfolio by purchasing Richards Manufacturing for $2.3 billion, securing a dominant position in North American underground distribution equipment.

TE Connectivity trades at a favorable 22 times earnings, representing a substantial discount compared to its direct competitor, Amphenol (), which trades at a multiple of 50.

Amphenol closed its first quarter of 2026 with record sales of $7.6 billion, up 58 percent year-over-year, driven by an 80 percent surge in its IT datacom segment. Led by CEO Adam Norwitt and CFO Craig Lampo, Amphenol is capturing immense market share, boasting a historic book-to-bill ratio of 1.24.

Heliocentric Generation and Solar Manufacturing Moats

While gas provides baseload security, heliocentric generation represents a crucial alternative. First Solar () is the leading thin-film solar module manufacturer in the Western Hemisphere, shielding itself from Sino price controls and raw material dependencies by maintaining its production facilities in middle America. First Solar reported record-breaking first-quarter sales of $1 billion, up 24 percent, alongside a 65 percent increase in net income to $350 million. The firm maintains a contracted backlog of 47.9 gigawatts, representing $14.4 billion in revenues through 2030.

First Solar operates with a strong net cash position of $2 billion, allowing the enterprise to invest heavily in research and development. This provides a wide safety margin for investors, who can capture a starting asset yield of 6 percent with an annualized growth rate exceeding 20 percent.

Wrap Up

It’s hard to debate. Nat Gas is becoming THE critical USA export, and a valuable fuel source for Datacenters

This source for electricity will only become more valuable as time unfolds.

Get your popcorn ready, going to be a wild show.

Thank you for reading. If you liked what you read, throw me a follow on X: @Donversationz!

~Don

---------------------------------------------

DISCLAIMER: I am actively building this investment thesis into my portfolio. Absolutely nothing contained in this report constitutes investment advice. This analysis is presented strictly and solely for educational and informational purposes. Always perform your own thorough due diligence or consult with a licensed professional before making any financial decisions

STORY OF THE YEAR

David Solomon Wins SpaceX Deal from DM’s

David Solomon, Goldman Sachs CEO, just won the lead role on what is likely going to be the biggest IPO in history. While other firms were going through normal channels, he reached out directly to Elon Musk on X Chat. Goldman Sachs secured the lead-left position on SpaceX’s IPO, which is targeting a valuation as high as $2 trillion and a raise of around $75 billion.

Most people still picture investment bankers in dark suits making polished presentations in wood-paneled rooms. Solomon has never fit that image. I would bet only some of you who are very well informed knows that the Goldman Sachs CEO is also a well known DJ.

In 2007, while still rising through Goldman’s ranks, he helped the firm win the lead role on Lululemon’s IPO — a deal that ultimately raised $327.6 million — by showing up to the pitch dressed in the client’s clothes instead of a suit.

Back in 2007, when Lululemon was going public, he showed up to the pitch meeting wearing Lululemon clothes, including a maroon blazer paired with their sweatpants. At the time, UBS had tried to stand out by organizing a yoga flash mob in Central Park while wearing Lululemon gear. Goldman took a different approach and sent its team dressed in the brand’s activewear. Goldman won the joint bookrunner role on a deal that raised $327.6 million at $18 per share, and the stock jumped 56% on its first day of trading.

This week he did the modern version of the same thing. Instead of relying only on traditional banking channels, Solomon slid into Elon Musk’s DMs on X to pitch Goldman for the lead role on the SpaceX IPO. It was a direct move in a field where most banks were competing through more conventional routes to secure a piece of what could become the largest IPO ever attempted, with a targeted raise of roughly $75 billion.

The pattern is clear if you look for it. Solomon has a track record of winning high-profile deals by being willing to do things that other bankers consider too unusual. Whether it was helping Goldman land the Lululemon IPO that raised $327.6 million in 2007 by dressing in the brand’s clothes, or sending a direct message to Elon Musk in 2026 for the SpaceX deal, the goal has stayed consistent — stand out to the actual decision maker rather than following standard protocol.

Join @Donversationz and friends on X!

Giving a special shoutout to @SayNoToTrading

He’s putting out some of the most thoughtful investment research on X. And he is NOT trading.

Also like to shout out , he saw my post on X asking for investment thesis rebuttal, and he delivered a great Substack response.

Want to have your X or Linkedin tagged in our blog?

Engage on X and get your profile featured to our readers!

AI Moment of the Week

Claude found a $500K BTC passphrase

A man who bought Bitcoin in college over a decade ago just regained access to roughly $400,000 to $500,000 worth of Bitcoin that had been locked for more than 11 years. He had changed the wallet password years earlier and spent over a decade trying to recover the funds without success, despite multiple attempts using specialized recovery tools.

He had changed the password years earlier, tried every recovery method he could think of, and even ran **trillions** of password combinations through recovery software. Nothing worked for eleven years. The roughly 5 BTC he purchased when Bitcoin traded around $250 per coin remained inaccessible as the price rose sharply over time.

Then he uploaded files from his old college computer and let Claude analyze them. The AI helped identify an older wallet backup file and, more importantly, spotted an error in how he had been running the btcrecover tool. It turned out the password needed to be concatenated with a shared key in a specific way that his previous attempts had missed after years of failed brute-force efforts.

Claude did not break Bitcoin’s encryption or guess the password on its own. It acted as a technical assistant that could read old files and debug the recovery script faster and more accurately than human efforts.

Behavior Correction Update

I’ve set up major guardrails

This week I’m allowing myself no trading, no stop-losses. I made long term investments in quality companies, roughly $350K deployed, and I don’t need to trim the hedges every day.

So I’ve deleted CNBC, X, and other financial Apps from my phone.

I’ve cleared my schedule, and I’m doing nothing this week but sitting alone in a quiet room underwriting 25 companies.

The goal is to enter Friday having made 0 trades, and have in depth and thoughtful price targets for 25 of the top companies I’ve been tracking for the last year.

I did a great job last week of reducing my trading, we did not lose money, however, the distraction was still real. I would get a notification every hour about a stock and then feel compelled to deep dive.

The better mode of operations is ignoring the noise, and just purely hunting for signal.

Investments Last Week

We funded Veeva Systems

VEEV is one of the leading providers of industry-specific cloud software for life sciences. Their Vault platform is widely used by pharmaceutical companies for clinical operations, regulatory information management, quality, safety, and commercial functions. Major companies like Pfizer use multiple Veeva applications across these areas to help manage important parts of the drug development and commercialization process.

In short, this is what I love:

• Founded in 2007 by Peter Gassner (still Founder-led, 19 years at the helm)

• Double-digit revenue growth every year for over a decade

• 1,400+ customers: all top 20 life science companies, large pharma, emerging biotechs

• 83% subscription revenue, which grew 17% YoY to $2.68B in FY2026

• $6.56B in cash + ST investments, against just $95M in total debt

• $2B share buyback program (first-ever, announced January 2026)

• Added to S&P 500 Index on May 7, 2026

• Elite 10-year history: Revenue CAGR 23%, Net Income CAGR 32%

• Customer retention exceeds 95% with net retention of 120%

• Key margins (current): Gross 75.5%, Operating 28.7%, Net 28.5%, OCF 44.3%, FCF 43.4%

You can read my personal research here if it interest you.

~Don Stein

X ←←←←←←←

Linkedin

(Click Here if you Prefer to Read Articles on X)

First Month Managing Our Investment Fund

From “trader” to “investor.”

Before we review the first month, I want to explain the mental shift I’m going through.

Before this fund, I’d take 100% of my net worth and put it in Crypto. I’d mis-time the top and lose 75% of my profits, but I’d make 25% painfully. Stocks similarily did involve me going all in at risky moments.

That got us here. But it will not get me to where I want to go. If I’m going to grow into a professional money manger, the #1 rule is don’t lose money. And the best way to insure your profit is to work hard, say no a lot, orient towards value, and hold for the long term to let compounding work magic.

Those are fundamentally different strategies than my timing based trading mentality in which I am trying to shake.

Ok, now how does this all tie into the fund?

It’s been 1 month since we first funded our IBKR account. The very first penny our fund ever made was from Berkshire as a symbolic tribute to Buffet.

Plenty of first-time small issues have occurred this month; hitting wire limits from the bank, on-boarding to Admin back office, Claude Credit limits when coding our research software, etc.. But as is the nature of the beast.

As of this writing (May 15th, 1 PM ET), the fund investments are in total down -0.55% on Net Asset Value (-$8,000). We are down because the “trader” in me is still trying to emerge.

The majority of losses came from three FOMO-driven careless trades on DAVE(-$6,000K), QCOM(-$2,500K), CBRS(-$1,000K). We are intending to long-only invest, so my disappointment in this trading behavior is vast.

While I’m kicking myself for a lack of micro-discipline, I’m thankful for my macro-discipline. I limited risk exposure in the first month, I avoided too much chasing a hot market, and I kept 65%+ of the fund in cash. This naturally allowed me to make some mistakes (knowing I would), but nothing critical. However, if not corrected these will compound and run us out of business.

Our Top 5 performing investments as of writing are NVDA (+$1,500), AAPL (+$1,500), XOM (+$1,000), MSFT(+$1,000), ADBE (+$500).

Roughly $380,000 deployed so far of the $1,420,000 fund size.

My hope is to close more capital from my friend who committed in April to invest $250K when he receives liquidity in June. I think he’s open to raising it to $500K, but it’s quite clear I first need to prove I’m capable of being wise, thoughtful, and delivering performance. If I can’t do that, then I don’t deserve more money. I must prove myself.

My sole focus is on self-correcting the below mistakes, and organizing around a standardized deployment process.

As my adviser/LP wisely stated when we had lunch last week, “no LP pays for randomness.’’

So the below is an open-letter about the mindset shift I’m going through. Shedding my old skin as a trader/gambler, and emerging as a disciplined top 1% investor with a replicable process.

So I’m excited to show you all what I’ve built……

But first…

Giving a special shoutout to @MatthewSpositi on X

He’s a random guy from the internet who found my article (which is now up to 31K views!), and left a very thoughtful thank you.

I hope the advice works for you, and me, Matt!

Want to have your X or Linkedin tagged in our blog?

Engage on X and get your profile featured to our readers!

INVESTOR #1 vs INVESTOR #2

Jekyll and Hyde

I’d say the first month is a tale of two investors.

Investor #1 is insanely diligent, thoughtful, heavily research focused, disciplined, and errs on the side of caution when pricing in a margin of safety. He’s using our custom built website each time, and he is investing for the long term from a desktop computer.

Investor #2 is impulsive, undisciplined, youthfully hopeful, over-exuberant, passionate, risky, and unsettled. He’s triggered by CNBC and X, then moves fast on his mobile device to make a quick buy that ‘just must happen right now!’

After analyzing this behavior, I’ve identified the core difference: one is willing to follow rules, and one is not. And I’ve also identified what that one rule is.

Statistically, looking at the various units I’ve deployed over the past month; Investor #1 appears 50% of the time, and Investor #2 sabotages the other 50% of the time.

Investor #1 funded these deals:

• NVDA: Bought 1 unit below $200 at FAIR price. Used low-risk stop-loss strategy to sneak in a second unit below $220.

• APPLE: Bought 1 unit below $280 at FAIR price. Used low-risk stop-loss strategy to sneak in a second unit below $290.

• SLDE: Did incredibly deep research on the shifting supply x demand dynamics in Florida’s insurance market. Found a company growing 20%, with a repeat IPO founder, large personal stake in the biz, history of success, trading at a price that so clearly was at or below FAIR it would be hard for me to make a mistake. Massive margin of safety. Stuck to rules, only bought 1 unit.

• INDV: Did great research, am confident in my forward projections of their revenue and net income whereas even if they drop to a 16 PE next year, and only hit low end of income projections, we still walk away without losing money. Massive margin of safety right now.

• ADBE: Also absolutely a FAIR price of $250, felt a GREAT price was $220. But it showed strength around $235 so bought a second unit on tight stop loss just before it bounced to $245. Then raise stop loss so we can’t lose money, but have upside.

• CRM: This started with a mix of Investor #1 and 2, but Investor #1 took control over time. I’ll spare you the details, but Investor #1 did some smart disciplined things to get average price down without too much further capital exposure.

Investor #2 funded these deals:

• Bought DAVE after it ran up 50% in a month, broke my 1 unit rule, got my ass handed to me (-$5K realized, $1.5K unrealized)

• Bought CBRS after it run up 80% post earnings, at least stuck to my 1 unit rule, hardly even know what the company does, it blew past my “can’t lose more than $150 stop loss” and I had to realize a 7X loss (-$1K)

• Bought QCOM after it ran up 50%, broke my 1 unit rule, kept trading in an out all week as it went from $240 to $200

• Set my Meta price targets to buy 1 unit at a FAIR price of $615, became undisciplined and ended up buying 2 units at $260. Broke my rule (-$2K unrealized loss)

• ADP saw the worst of both worlds. Investor #1 identified $199 as a very FAIR price, but didn’t buy it because he feared moving too early. Then ADP reported great earnings, shoots up to $218, which is where Investor #2 stepped in with massive FOMO and bought that local top.

• ETH/BTC/BMNR/XXI/MSTR: Buying 4% of portfolio into crypto over the past two weeks in anticipation of the Clarity Act mark up seemed wise. We were up 5% after the Senate Banking commit made final approval. Didn’t take profits. Convinced myself this was a value buy, “XXI owns $3.5B worth of BTC at $80K, with an Enterprise Value of $3B there’s 12% delta.” But once again I broke my rule of 1 unit at Fair pricing, ended up putting in twice as much as I should have. And rode it down to take loss.

None of those operating businesses are inherently bad companies, in fact they’re all great, but the core difference stems from my deploying in a patient vs non-patient manner.

FOMO vs FOME

Fear Of Missing Out, vs, Fear Of Moving Early

Investor #1 operates from a place of, “It’s insanely unlikely that I will lose money on this over the long term, even in a worst case scenario, I won’t lose much..’

Investor #2 operates from a place of, “this is absolutely going to make money, and the window of opportunity is closing with each second I don’t make a move.”

Investor #1 is patient, waits for his pitch, and has fallen in love with the idea of hunting for bargains in high quality companies.

Investor #2 lets his emotions dictate action.

Now, not all of these mistakes happened when I had clear rules set, some happened prior. And, not all happened when I had the website up and running intended to prevent Investor #2 from taking over (which, although the website is not perfect, it is absolutely increasing the friction in which Investor #2 must overcome). But still, the behavior is unquestionable, and unacceptable.

Behavior Correction

Easier said than done

How come everyone knows to eat healthy and work out, yet not everyone does it? Discipline.

And that is exactly the challenge I’m facing with these rules, I know that I should stick to them without any veering, but sometimes that twinkie just looks so good. Or, sometimes I’m just too tired to go to the gym, so I’ll do it tomorrow.

Well, no. I don’t do that with my fitness. And I cannot afford to do that with my money.

I printed those 3 rules out on paper, and taped them all over my house.

Example of it Working

I bought PRIM on a Solar Energy thesis, well thought out, great biz, but I felt the FAIR price was $97. I bought it at $107 anyways. It went up to $115. Instead of being happy about this, I recognized I broke my rule, and sold it. It’s since dropped to $111, and I hope it goes to $97 so I can hold it in my portfolio. But, I knew it broke my Rule #1, and so therefore I had to sell.

My Theory on Why Investor #2 Takes Over

Investor #2 is not an idiot, he’s actually quite foresightful, but he’s just not disciplined.

• He funded NXT and went up 10% in a day. But didn’t take profits.

• He funded QCOM and went up 10% in a day. But didn’t take profits.

• He funded ETH and went up 5% right after Clarity Act mark up, then didn’t take profits, and went above policy allocation rules.

• He funded XOM and is up 6% on the position today.

• Bought CRCL and rode it up 15% in a day.. Then rode it back down.

Buffet says: ‘If you have an IQ of 130, you can give 30 of it away. The most important thing for investing is temperament.”

My edge is Investor #2, but it’s a double edged sword.

Investor #2 is the engine, but if it overheats, the whole car breaks down. And we’ve been proven to overheat at a moment’s notice.

For me to grow into a top 1% investor, I need to maintain Investor #1’s rule-following discipline, combined with Investor #2’s insatiable curiosity.

In other words, I must let Investor #1 drive, and let Investor #2 control the music.

Wrap Up

Thank you for reading

As I said at the top, while I’m kicking myself for a lack of micro-discipline, I’m thankful for my macro-discipline. I limited my risk exposure in the first month, I avoided too much chasing a hot market, and I kept 65%+ of the fund in cash. This naturally allowed me to make some mistakes, but nothing critical.

I’m very proud of the hard work I’m doing on research. I feel very comfortable underwriting these companies.

And I’m extremely proud of the Diligence software I built with Claude.

The thoughtful nature I’m sifting through the market should absolutely lead to returns over time.

But the key for me is to avoid trading, optimize for buy+hold, and NEVER break my rule of buying a security above its FAIR value as determined by conservative estimations.

As Howard Marks said, “Investing is like amateur tennis. Don’t worry about hitting winners, just don’t hit losers.”

If you’ve invested with me, thank you. It means the world, and I’m doing everything I can to deliver the both of us outsized returns.

If you’re just a friend watching me grow, then thank you for caring, and I hope one day to manage your capital in a stress-free manner.

I put 100% of my liquid capital in this. So I must figure this out, and fast. I’m all in.

~Don Stein

X Twitter / / Linkedin

“To mitigate mistakes, checklists are a necessary ingredient before airline flights. Just as they are before deploying capital.”

-Warren Buffett, (yes, even he uses a checklist)

(full post available here)

After $1K of Claude Credits, and 2 weeks of relentless work, it’s working!

Any modern fund needs AI to build an edge. From sourcing to filtering to analyzing to deploying, AI fundamentally acts as an advantage for managers.

It can scale one person to do the work of 1 MD and 4 Analysts.

Some of you may be experiencing this power as your recent grad can’t find work.

But with all change comes opportunity.

Below is an example to learn from, of how personal AI software is sure to be the future.

Every smart person will be doing this in the next 6-12 months.

So I’m excited to show you all what I’ve built……

But first…

Hey, I’m Don!

I LOVE INVESTING. If you do too, then stop, and subscribe below. If you hate investing, probably should also subscribe and I’ll teach you to love it.

Subscribe this week and get featured in next weeks newsletter that goes out to 5,000 readers!

Featured Friends:

This week we had special engagement with one human, and one robot. I appreciate whatever bot is running @theaiportfolios on X, I think this is sage advice to those of us who struggle with trading:

And the second shoutout from X goes to Rico. He used AI to code his own short-term momentum indicator for Stocks. Maybe he was influenced by me :), because he tagged me when launched.

Emmanuel has also been all over the Substack, thank you for engaging!

And a very cool shoutout from $DAVE!

Now in 2026, I’m building an institutional grade investment fund on top of a fully proprietary AI platform. We’ll be going live to @ThoughtfulCapLP with the fund thesis! (Website launching June 1st).

My X article last week topped out at 23,900 views! My most viral ever!

Thank you for engaging!

This year, I set the goal to publish a thoughtful blog every Monday.. 52 of them! Don’ Daily is a recap of the entrepreneurship adventures I collect, as well as the new lessons I’m constantly learning from investing.

Engage on X and get your profile featured to our readers!

Read our article on X with a built-in audio AI bot that summarizes it for you!

Project Codename: Luminous Wisp

When I first set up the website last month, they assigned the project name Luminous Wisp. I have no idea what it means, but it’s been our Project Codename, so it’s grown on me.

A Robust Dashboard

So here’s the homepage I open my software to:

I can quickly see a Dashboard of where I’ve been investing, and the number of companies in each stage.

Scrolling down and there’s a Bird’s Eye View of the entire pipeline (with hovering cards so I can remember analysis):

And below that is an overview of my active investments vs active trades:

I’ve essentially built a Dashboard that tracks everything about where we’re investing, and what we should be tracking to maintain thesis.

In Depth Company Profiles

At the heart of this process, is a 7 step system going from research to investment.

Those 7 steps (sorry they’re hard to see) are the sequence I must move through with each deal.

You can see I’m pulling and calculating THOUSANDS of custom metrics across all these companies.

Here’s just 1 of the 7 pages for you:

Now let’s dive into one of the 7 individual pages.

Here’s the ‘Current Value’ tab on Apples Stock page.

And thanks to software, it auto-calculates all key metrics that I care about in the blink of an eye. Hooked into real-time financial data via an API.

Further scrolling, we get to the valuation ranges. This helps me understand where the current stock price is relative to its potential movement (based on PE multiples and thoughtfully-adjusted TTM revenue).

And to help me understand what warrants a ‘FAIR’ multiple per each individual stock, I pull and calculate custom multiples metrics over the past 1-12 Quarters.

This helps me comp the current multiple to historical multiple averages.

At the bottom of each of the 7 steps lies a ‘reasoning’ input.

This is where I summarize all my findings.

Investment Memo

The 6th step requires I complete an Investment Checklist. This is the final information used to auto-capture our investment memo for us. And is the final step required before I can invest.

One cool feature is this matrix I built to help me mentally model where the deal fits into our overall portfolio structure.

And to ensure I’m not shortcutting our methods, I even have a literal checklist that is required before making any investment.

And then I literally sign an agreement with my own self, to ensure compliance with our deployment strategy.

One of the checklist items actually requires me to read a 10 page memo I wrote to myself. And the memo has randomized checkpoints, so I can’t just skip through it. This yet again forces me to absorb the true mindset of a top 10% investor.

Here’s a photo of one of the checkpoints within that required reading:

The fence is up, now we just need to stay within its bounds.

Investment Journal

To track all the madness, I have an update feature associated with each company. This lets me journal and track things easily.

Example, there’s multiple categories to select from when journaling, even ‘analysis paralysis’ when I’m overthinking.

Once an update is added, it appears in chronological order within that companies profile.

Allowing me to easily go back and track why I did certain moves, and how I was thinking about deals I hit on, or missed.

Why it matters:

I have a really bad problem where I trade. I will trade the same dollar 10 times during a year sometimes. It’s ridiculous, and not a top investor method. I built this system for myself as a way to harness that excitement into research, and thoughtful analysis of each company. The software forces me to slow down, and forces me to track everything. I’ve only had it live and running a few days without bugs, but already the benefits are clear. The deals I’ve done in the last two days are much cleaner, more thoughtful, and safer in nature than the others. This software enables me to have a repeatable system to underwrite companies, and build a true cash cow over time.

It requires I fundraise more, but fundraising requires I first build a clearly well designed portfolio. So that’s what we’re laser focused on doing.

~Don Stein

Check out the most viral post I ever wrote!:

Leave a comment

“The wise man does at the start what the fool does at the end.”

-Howard Marks, (Second Greatest Investor of All Time)

(full post available here)

Warren Buffett Helped Me Go VIRAL Last Week :)!

Last week I published an article on X with tons of my favorite quotes from Buffett and other iconic investors.

It took me months of collecting (across books, online, interviews)

But actually, months.

So to see….

23,000 views and 98 people who ‘bookmarked’ my article….

….to re-read later, feels good.

We’ve got something even greater today……

But first…

Hey, I’m Don!

I LOVE INVESTING. If you do too, then stop, and subscribe below.

If you hate investing, probably should also subscribe and I’ll teach you to love it ;)

Send this to a friend and they’ll get featured when they subscribe!

Between 2015 until 2025 I networked with 100’s of incredibly cool people, both in person while living in San Francisco, and London, as well as virtually (re-watch our convo’s here).

Now in 2026, I’m building an institutional grade investment fund on top of a fully proprietary AI platform. We’ll be going live to @ThoughtfulCapLP with the fund thesis! (Website launching June 1st).

Thank you for engaging!

The most wise thing anyone responded to me on X with this week, was from @BigIdeasCapital on X

His point was around having survived the pivot from CD’s to Cloud.

He wisely states that the pivot from CD to Cloud is different than Cloud to AI because the prior was more a difference in distribution, whereas the latter is a fundamental difference in product.

That is very smart, and I totally agree. ADBE needs to revamp an entire new product suite with AI.

But, taking it a step further. We see that was founded in 1980’s… and started with printing software. Moving from clunky enterprise printing software to a consumer friendly CD.. now that is as big of a shift as AI.

So I appreciated him commenting and making me go deeper on my thesis.

ALSO → Shoutout Sean, Alex Stetson, Wolfe, Ken MacPherson, and The Polite Investor for showing me tons of love on X this week!

This year, I set the goal to publish a thoughtful blog every Monday.. 52 of them! Don’ Daily is a recap of the entrepreneurship adventures I collect, as well as the new lessons I’m constantly learning from investing.

Engage on X and get featured to our readers!

Read our article on X with a built-in audio AI bot that summarizes it for you!

I’m Traveling Today (again!)

On the road again! Another AirBNB adventure, this time to the East Coast of Florida.

I’m meeting with one of my investors!

(this email will be sent out 48 minutes after that meeting starts!)

So I’m actually in it right now!

It’s been an absolute honor working together over the years, I’m thankful he’s supporting me in this new fund I’m building, and I hope I’m enjoying the coffee.

AI Stock Software

I don’t know if I’ve ever worked this hard on something over a stretch of 7 days.

From Friday night at 10 PM (March 24th), thru May 2nd, I have not stopped.

I haven’t shaved, have barely showered, haven’t been to gym.

I’m eating extremely healthy, like Steve Jobs healthy. Just plain ground turkey and veggies.

Plus my usual eggs and sausage, plus toast, every AM.

So I’m not feeling unhealthy, quite the opposite, I feel like I’m so zoned in, and my fuel tank is full.

I’ve felt like my fuel tank has been full nearly 24/7 since last Friday.

I’ve fallen asleep twice in the past seven nights while coding.

I woke up with Claude sending me a finished build to test, and my dog laying next to me.

Here’s a sneak preview:

If you know Buffett, and you know the Margin of Safety concept (explained below), then you can see what I’m doing.

We’re using AI to re-create Buffett’s investment style :)

Think like Buffett, become Buffett.

~Don

Leave a comment

Great quote.

Let it sink in for a second. The man who helped build one of the greatest investment empires in history is not kicking himself over missed billions or missed headlines. He is kicking himself over missed wisdom. That is the whole game in one sentence.

Get rich slow, and in a way that prevents the risk of losing principle.

The TLDR is brutally simple for making good investments:

Margin of Safety.

Look hard, and say no.

But harder to do so, as most people don’t have the patience to get rich slow.

For investing, the number one thing I want burned into my brain when the market is screaming at me is this: you know nothing. Nobody does. If you ever feel 100 percent sure you are going the right direction, you have already failed the test. That is the discipline.

G.K. Chesterton nailed the feeling better than anyone: “The real trouble with this world of ours is not that it is an unreasonable world, nor even that it is a reasonable one. The commonest kind of trouble is that it is nearly reasonable, but not quite. Life is not an illogicality; yet it is a trap for logicians. It looks just a little more mathematical and regular than it is; its exactitude is obvious, but its inexactitude is hidden; its wildness lies in wait.”

That is the market in a single paragraph. It looks orderly until it bites you.

Nobody knows anything, including me. You know nothing. Nobody does. Everything is an opportunity. Everything is a risk. Everything is both.

True professional investing is not about predicting the future. It is about not losing money while the future unfolds, often in ways that make fools of us all. You go slow. You keep taking in new information. You adjust. You treat every hour like you are driving cross-country with no GPS, no map, and no idea what is around the next bend. You pull over. You ask directions. You listen. Then you drive again until the next thoughtful voice tells you something better.

Howard Marks said it with his usual calm clarity: “We never know where we’re going. But we better know where we are. Find your comfortable speedometer number out of 100, and try to be there as much as possible.”

I am just going to do the simple thing.

Warren Buffett put it even plainer: “Everyone has ideas here and there, usually the simplest is the best.”

David Swensen summed up the entire profession in one line: “Investment success follows most reliably from pursuing value-based strategies.”

The One Rule to Rule Them All

First rule, follow me on X 😀

But no, THERE IS ONLY ONE thing that matters most in investing. It is non-negotiable. Without it you are not an investor. You are a gambler. That thing is margin of safety.

This game will embarrass you right when you start thinking it is easy. Do not celebrate. Ever. The moment you feel too smart, too smooth, too certain, that is the exact moment the market is warming up its biggest punch. It is the calm before the storm. It is the pre-wave before the shock. It lulls you into complacency and then it destroys you.

We’ll dive into all 14 Principles, with extensive quote reference below.

But first…

Hey, I’m Don! I’ve been building career memories for a decade. Over the last three years I’ve been reinvesting my own capital and time back it into my business. All the while learning and growing my net worth via public markets and crypto.

Send this to a friend and they’ll get featured when they subscribe!

Thanks for reading Don’s Daily! Subscribe for free to receive new posts and support my work.

Over that same period, I also hosted 50+ virtual events with some of the world’s best VC investors and founders for our CEO group. Prior to all that, aside from my first job at Meta, I was lucky enough to raise $10 million in my twenties; doing my best to learn business, investor relations, and the startup mindset all at the same time. Maybe some of you can relate.

Welcome our new Subscribers!

(Cough… Aw… no new subscribers this week.. oh well! I do it for the love of the game.)

This year, I set the goal to publish a thoughtful blog every Monday.. 52 of them! Don’ Daily is a recap of the entrepreneurship adventures I collect, as well as the new lessons I’m constantly learning from doing. My hope is that this entertains, inspires, and influences new creative ideas for you. Every Monday. If you enjoy the blog, please share!

You can share this post or read it on X with a built-in audio AI bot that summarizes it for you!

14 Principles To Keep You In The Game

Here is where the ride gets fun, because these are not dry rules. These are battle-tested, often profane, sometimes hilarious truths from the people who actually survived the market’s worst moods.

Principle 1: Epistemic Humility – You Know Nothing, Stay Nimble

Any arrogant approach of thinking you know what is best for someone else is probably not a great idea.

Shit happens. You are not perfect. Roger Federer only won 54 percent of his points but 80 percent of his matches. The best just show up enough times to put themselves in position for the game-winners. Michael Jordan missed over 9,000 shots but made more than 25 game-winners. You have to get back up, keep grinding. Every 0.1 percent is an edge. You only need a tiny edge over 50/50 odds across a long enough period to become iconic.

Howard Marks was blunt: “Recognize that mistakes are inevitable. The important thing is that the investor recognizes a mistake quickly, accurately diagnoses its cause and does not repeat it.”

Don was even blunter: “Doing more of what works. Doing less of what didn’t work. Don’t sweat it, you fucked up, just start doing more of what works day by day. Write out a schedule of a week, each day doing more of what works. Just force yourself to do it. This is up to you. Nobody can save you.”

Howard Marks broke it down into three classic mistakes investors make. First, thinking you understand what the future holds. Second, assuming the world will stay exactly the way it is right now. Third, letting your emotions drive the bus instead of your checklist.

Peter Bernstein said it like a philosopher: “Essentially, risk says we don’t know what’s going to happen. We walk every moment into the unknown. There’s a range of outcomes, and we don’t know where the actual outcome is going to fall within that range. Often we don’t know what the range is. Aka. We know nothing. Stay nimble.”

Howard Marks again: “Forecasting is not valuable. We don’t know what’s gonna happen, and randomness will play a role.”

Keynes warned about the “dark forces of time and ignorance” that cloud the future and make even the most thoughtful estimates unreliable.

In markets you need two things, Marks said: “a view of what you think is going to happen, and a view on the probability that you are right.”

Charlie Munger’s famous line still stings: “If something is too hard, we move on to something else. What could be simpler than that?”

Stay hyper-aware, but only of things that live in the easy bucket. If it is too hard, hyper-awareness will eat your entire life. Find the things that are not too hard and stay on top of those.

Principle 2: Get Rich SLOW – Do Not Lose Money, Leave Some on the Table

Make money equals raise money.

Jeff Bezos knew the math: long-term wealth always beats fast money.

Warren Buffett was crystal clear: “The philosophy requires patience. Which a lot of people don’t have. People would rather be promised they’ll win a lottery ticket next week than they’re going to get rich slowly. Be long term greedy, not short term greedy.”

Charlie Munger warned: “The desire to get rich fast is pretty dangerous.”

Buffett again: “You only have to do a very few things right in your life so long as you don’t do too many things wrong.”

Munger loved this one: “It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be intelligent.”

If all you ever did was buy high-quality stocks on the 200-week moving average, you would beat the S&P 500 by a large margin over time, Munger said. The problem is almost nobody has that discipline.

This deliberate slowness keeps you from spinning out around the corner you never saw coming.

Charlie Munger called the whole process: “Extreme patience combined with extreme decisiveness. You may call that our investment process. Yes, it’s that simple.”

Warren Buffett: “You have to make very, very few right investing decisions in your life.”

Munger again: “If you’re just not crazy, you have a big advantage over 95 percent of people. If you’re just consistently not crazy, you get a big advantage in life. It’s so simple. Why don’t more people do it?”

Buffett’s punch-card thought experiment is legendary: “Don’t risk what you have and need to get what you don’t have and don’t need. If everyone has a punch card with 20 punches. Each one was a major financial decision in your life. Everyone would be rich because they’d make damn sure those are good bets.”

Munger loved watching Buffett do nothing when there was nothing to do.

At Berkshire they tried to do less, not more. They never thought they could know everything. They just worked hard enough to find a few things where they were right, and that was enough.

Gradualism is a virtue in itself. Substantial uncertainty surrounds the asset allocation process, Graham reminded us.

Charlie Munger in 2018: “In America they call it long attention span. They can keep their mind on a game for a long time until they’ve solved it. The world is full of foolish gamblers and they will not do as well as the patient investor.”

Deciding to make radical changes based on shaky data is just putting too much weight on a shaky foundation.

Buffett again: “If you’ve got 150 IQ and you’re in my business, go sell 20 or 30 points to somebody else because you really don’t need it. You need emotional stability.”

“I’d rather be 100 times cautious than 1 percent too incautious.”

“Don’t swing at every pitch. Wait for yours.”

You should feel like you are moving so slowly that your own mind thinks you are moving too slow.

One of the hardest things in life is for a man to sit in a room and do nothing.

Larry’s version was shorter: Survive and advance.

Principle 3: Value Investing Discipline – Buy Below Fair Value, Then Be Patient

Warren Buffett: “Stocks sell at silly prices from time to time, that’s how I got rich.”

“People behave in extreme ways in markets. Over time, that’s very good for people who keep their heads.”

His greatest lesson: NEVER CHASE. If an exceptional company trades at insane prices, do not buy it. Wait for an exceptional company at a reasonable price. Then go all in. If you cannot find it, wait.

Howard Marks explained the real secret: “How do you make money as an investor? The people who don’t know think the way you do it is by buying good assets. Good building, stock in a good company. Something like that. That is not the secret for success. The secret for success in investing is buying things for less than they’re worth.”

I want to get paid MORE for my risk. Not less.

Buffett on the ideal business: “The ideal business is one that earns very high returns on capital and that keeps using lots of capital at those high returns. That becomes a compounding machine.”

“The single most important decision in evaluating a business is pricing power. If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business. And if you have to have a prayer session before raising the price by 10 percent, then you’ve got a terrible business.”

“You can turn a good business into a bad investment if you pay too much for it.”

Common sense is the guiding light. Howard Marks again: “When you buy the S&P 500 at a 23x P/E, your 10-yr annualized return has always fallen between +2 percent and –2 percent, IN EVERY CASE, EVERY CASE!”

Principle 4: Anti-Momentum, Contrarian Behavior – Fish Where the Fish Are

Charlie Munger: “Fish where the fish are. You want to fish where the bargains are. It’s that simple. If the fishing is really lousy where you are, you should probably look for another place to fish. We all do better hunting when we hunt where the hunting is easy.”

Markets move to extremes. High prices for the popular. Low prices for the out-of-favor. That is where the money lives.

Pabrai: “Wall Street gets confused between risk and uncertainty. In fact, when Wall Street gets confused between the two is where the greatest opportunities arise.”

Jeremy Grantham: “Reversion to mean constitutes the most powerful force in financial markets.”

Buffett: “Innovator, then imitator, then idiot.”

Howard Marks: “The wise man does at the start what the fool does at the end.”

Scott Bessent: “The crowd is right 80-85 percent of the time. And that’s the momentum. But it’s when things turn, or you can imagine a different outcome, is when you can really make a lot of money. Most of my big successes have been taking the other side of a weak opinion.”

Larry Ellison: “You have to find errors in unconventional wisdom.”

Ben Horowitz: “Any fact anyone knows has a half life.”

Note to self: You are naturally contrarian, which means you are usually right at the opposite end of the cycle, but you are typically early. So move slowly in action, fast in thought. Maintain a long attention span. Write things down. Believe your gut and hold it.

Charlie Munger on formulas: “If you want a formula, you should go back to graduate school. They will give you lots of formulas that won’t work.”

Warren Buffett: “The stock market is the most obliging, money-making place in the world. Because you don’t have to trade. You can wait for a good deal. It’s a marvelous game. The rules are stacked in your favor.”

The Little Blue Book that Beats the Market described Mr. Market perfectly: On some days he is in a great mood and offers you way too much for your shares. Sell to him. On other days he is depressed and offers to sell you shares for far less than they are worth. Buy from him.

Contrarian behavior is at the heart of success, but human nature craves the safety of the crowd.

Phil Fisher: “Have the moral courage to act against the crowd when your judgment tells you that you are right.”

Declines sow the seeds of future purchases.

Buffett again: “When the price of a stock can be influenced by a herd on Wall Street with prices set at the margins by the most emotional persons, or the greediest, or the most depressed, it is hard to argue that the market always prices rationally. In fact, market prices are frequently nonsensical.”

The attractively priced, out-of-favor strategy beats the highly valued alternative every time.

Most investors feel safe in the mainstream. Only a rare few operate outside it consistently.

Charlie Munger: “A few, rare opportunities will come. You got to learn how to recognize them. Opportunity doesn’t come often, so seize it when it comes.”

In the face of overwhelming consensus, successful contrarians turn a deaf ear.

Establishing the position is only half the battle. The other half is not losing your nerve.

Travis Kalanack: “What separates the successful entrepreneurs from the non-successful ones is pure perseverance.”

Principle 5: Simplicity – Keep It Simple, Never Sell Quality, Most Things Go in the Too-Hard Pile

Charlie Munger: “The big money is not in the buying and the selling, but in the waiting.”

Time does what timing cannot.

Warren Buffett: “The main thing to do is buy into a wonderful business and just sit there with it.”

Warren Buffett and Munger: “We leaned very much towards things where we felt certain to get a decent result, rather than where we were hopeful to get a brilliant result.”

Howard Marks on amateur tennis: “It’s like amateur tennis. It’s about not hitting losers, the winners don’t need to be hit. They just happen if you don’t hit losers. In tennis, if you’re pro you win by hitting winners. If you’re amateur you win by not hitting losers.”

There will always be more to learn than you can truly understand. Do your best turning over every stone you can.

Jensen on Musk: “The first is deletion.” Huang added: “He has the ability to question everything to the point where everything’s down to its minimal amount. Most engineers solve problems by adding. Musk solves them by subtracting. Every part. Every process. Every assumption that survived because no one had the nerve to kill it. He picks it up. Asks if it’s load-bearing. If the answer is anything less than absolutely, it is gone.”

Principle 6: Conviction and Sizing – Stick to Policy, Do Not Sell Quality

A thoughtful portfolio management process ensures funds only accept risks that match the targets and promise enough reward.

KNOW what you own. This becomes critical in downturns. And there will be downturns.

Peter Lynch: “If you can’t explain to an 11-year-old in a minute or less why you own a particular stock, you shouldn’t own it and should just buy a fund instead.”

You did all that work, so trust your gut.

Warren Buffett: “Big opportunities in life have to be seized. You won’t get many of them in your lifetime.”

Stanley Druckenmiller: “It’s not whether you’re right or wrong, it’s how much you make when you’re right and how much you lose when you’re wrong.”

MSFT CEO: “Be bold. But be right.”

David Swensen: “Most portfolios work well with around a half a dozen asset classes, but careful investors define asset classes in terms of risk function.”

“My advantage is not IQ. It’s ‘trigger pulling,’” said Stanley Druckenmiller.

Buffett: “The most extreme mistakes we’ve made are mistakes of omission. It’s the things I knew enough to do; they were within my circle of competence, and I was sucking my thumb.”

Brandon: “Be thoughtful that the things you know aren’t mainstream, and EACH person has a unique cocktail mix of information that stirs their drink. Your information is unique when combined with other unique info, hard earned, and generates an individual perspective. To what degree is the real question? And for how long until it becomes mainstream reality is the second.”

Charlie Munger: “I never allow myself to hold an opinion on anything that I don’t know the other side’s argument better than they do.”

CNBC Guest: “He who knows only his side, his side of the case, knows little of that.”

Charlie Munger: “The goal of investment is to find situations where it is safe not to diversify.”

Recognize that the investment universe contains very few truly outstanding companies, and opportunities to buy them occur very infrequently. Concentrate your attention and funds in the most desirable opportunities.

Charlie Munger: “We tend to go in heavily when a great investment opportunity presents itself. For many, many months, we were buying as much Coca-Cola as we could buy — roughly one-third of the volume trading every day for months. We were very aggressive.”

Buy with gusto when conditions are unfavorable or others misperceive true worth.

Charlie Munger: “Opportunities in life are going to be rare because that’s the nature of the human condition. The best and wisest are only going to get a few big opportunities — and you really have to step up to the pie counter and take a big helping when you get the chance.”

I buy when I know I should but I don’t want to. Much better than buying when I know I shouldn’t but I want to. That is value versus momentum.

“I’m only interested in investing if I have some sort of advantage. Which means I can’t do the conventional things. And if I have an advantage of 3 different things, that’s enough for any family,” Munger said.

Principle 7: Process Over Emotion – Checklists, Memos, Measured Iteration

Fast shortcuts create biases. Sloppy management follows.

Warren Buffett said that in 60 years at Berkshire, only 12 decisions moved the needle. That is one good idea every five years.

Checklists are not optional. They are how you survive.

“Act only after you have collected sufficient information and have thoroughly evaluated a situation,” Phil Fisher said.

Stanley Druckenmiller: “I’ve always loved to play games, and face it, investing is one big game. You need to be decisive, open-minded, flexible and competitive.”

“Don’t be afraid to give up the good to go for the great,” John D. Rockefeller said.

Peter Lynch: “You look dumb in this business. You are terrific in this business if you are right 6.5 times out of 10. That’s a great score. Even if you are right 5 times out of 10, if you own Costco or Walmart or Nvidia that offsets your mistakes.”

Time is the friend of a wonderful business and the enemy of a lousy one.

Pabrai: “Quality over quantity in decision-making. Great investment opportunities are rare. Have your capital working in a reliable compounder like Berkshire, which combines reasonable returns and safety. Meanwhile, scan for more asymmetric opportunities for smaller investors.”

“The best time to buy stocks is when you don’t feel like buying,” Parag Parikh said.

Warren Buffett: “I would still be buying stocks even if World War III broke out.”

Buffett’s checklist is simple: businesses he understands, consistent profits, strong competitive advantages, trustworthy management, fair valuation. Avoid speculation. Focus on long-term value and patience.

Carter’s car story is the perfect framework. A good investment is one where you said no to a lot of offers and looked really hard. A bad investment is one where you did not look hard and said yes in the moment.

Principle 8: Independence and Freedom – Money for Free Time, Not Things

The ultimate success in investing is being able to sleep peacefully, do what you want, and feel relaxed. You need to know why you own something, both at the individual level and the portfolio level.

Warren Buffett: “You really want to go along with the idea that if you’re going to take a trip for 20 years, you wouldn’t feel bad leaving no orders with your broker, and you know when you come back it’s going to be a strong company. If it’s only going to be a great company for 3 years, it ain’t a great company. I think it’s better just to own them. They’re too hard to find. We could attempt to buy and sell, but they’re too hard to find. So to sit there and hope you buy them in the throes of some panic, I’m not sure that will be a great technique. You never get the full benefit of those extremes anyways. I think the main thing to do is find wonderful businesses.”

Waking up with no alarm is a real luxury.

“Like Warren, I had a considerable passion to get rich, not because I wanted Ferraris. I wanted independence. I desperately wanted it,” Charlie Munger said.

Don was honest: “I made money not because I wanted to make money, but because I did not want to work. That’s why I wanted money, freedom from working. Freedom from my weekly community tasks. 100 percent full control over my time. So wanting money didn’t stem from wanting money, it stemmed from a pain in my life that I needed to solve. Wanting 100 percent of MY time to be MY time.”

At the bottom of a bear market you have to drag people to the altar to buy stocks. They will be cheap. That is where they make the most money. Ted Oakley said it best: at those moments you say this company will make X over the next five years, and if you had all the money in the world you would buy the whole company right now.

You have to pick winners and losers. Once you pick the winner you are okay.

Principle 9: FOMO versus FOME – Fear of Moving Early, Patience Over Impulsiveness

Have to be okay with missing things and sticking to policy. Dad said: “If you never own a CRM, then you never own a CRM, what can I tell ya. Like in real estate, don’t fall in love with your work. Don’t say to yourself ‘I did all this work on CRM, blah blah, but it isn’t hitting my price, I’ve got to make things happen.’ You can’t get sucked in. If you don’t buy it, or buy a little, and it goes up then oh well. There are 5K stocks, you’re looking at them every day, you’re finding them.”

Are we leaning risk on or risk off right now?

Warren Buffett: “I did miss the boat on tech stocks, but I don’t mind missing boats that I don’t know enough to captain. I don’t have to understand everything. I just have to be right about the things that I do.”

FOMO disappears when you remove time as a factor and make it infinite. There is plenty of time. Warren Buffett missed tech and still made 100 billion on Apple.

Have to be okay missing stuff and sticking to policy.

Principle 10: Momentum is a Feature – Be Prepared for Sudden Endings

Richard Bookstaber: “The general rule of thumb is that every financial market experiences one or more daily price moves of four standard deviations or more each year. And in any year, there is usually at least one market that has a daily move that is greater than ten standard deviations.”

Howard Marks: “96 percent of financial history has occurred over 2 standard deviations. But everything interesting has happened outside of 2 standard deviations.”

Since 1950 the average drawdown in the S&P 500 has been 14 percent in a calendar year. Drawdowns of at least 10 percent happened in 37 of the past 75 years. 20 percent plus corrections happened in 11 of those years. 30 percent plus in 4. You get one or two big opportunities per decade. You never know when they are coming. That is when the big money is made. The greatest opportunity is always at the depths of uncertainty.

Becky said the markets just had a significant decline. Buffett replied: “Not significant. I’m not in this to make 5 percent.”

Peter Lynch: “What you learn from history is that the market goes down. The market has had 50 declines of 10 percent or more, about once every two years, the market falls 10 percent. We call that a correction. Of those 50 declines, 15 have been 20 percent or more, a bear market. So every 6 years the markets are going to have a 20 percent decline. If you’re not ready for that, you shouldn’t own stocks. It’s good when that happens. And, no one knows when they’re going to happen. Take advantage of the volatility if you understand what you own. You have plenty of time. People are in an unbelievable rush to buy a stock.”

“We can’t always buy the stocks that go up. I wish we could. But obviously we can’t know. And the stocks that go up also go down. And they can go down ferociously, violently. And that’s a feature of stocks. Not a bug,” Chris Mayer said.

If an investor avoids the flavor of the month over and over but eventually gives in, it is usually at the exact peak of hype. That is when returns are minimal.

“Stocks are SAFE for the long run and very unsafe for tomorrow,” Warren Buffett said.

“The stock market will do whatever it has to do to embarrass the greatest number of people to the great extent possible,” Walter Deemer said. That is Deemer’s Law of Perversity.

Why did I lose? I sold too late. Or I sold quality and bought hype. You should be holding quality and selling hype on tight stop losses.

Principle 11: Circle of Competence – Only Act When You Have a Confirmed Edge

All intelligent people think primarily in terms of opportunity costs. Compare what you are doing with the best opportunity you have.

Since investing is fucking hard, look for the simple opportunities where you have a unique advantage.

Warren Buffett: “Peter Lynch has always said, ‘Buy a business that’s so good that any idiot can run it—because, sooner or later, one will.’ Well, we would like to buy a business like that and then we’d like a terrific guy running it.”

“The four most dangerous words in investing are: ‘This time it’s different,’” Sir John Templeton said.

Warren Buffett: “The goal is to own the best businesses in the world, and I want to own them for a very long time.”

Principle 12: Rebalancing and Portfolio Construction – Lean Against the Wind, Sell Winners to Buy Losers

Rebalancing is supremely rational. It forces you to sell what has done well to buy what has done poorly.

Once it goes in the portfolio, it goes in. You can put most of your assets in the fund and check back in 5 to 10 years. 50 to 60 names. Average name only 2 percent. Start new names at 1 percent. Add as confidence grows. Stop adding around 3 percent. Market appreciation does the rest. That was Bill Nygren.

You HAVE to be willing to leave money on the table. Leaving money on the table is a safely leveraged way to manage risk.

Disciplined investors use rebalancing to maintain targets, selling strength to buy weakness. David Swensen.

Beyond about 30 well-chosen stocks, diversification benefits plateau. Warren Buffett: “Diversification is protection against ignorance. It makes little sense if you know what you are doing.”

“Buy a stock the way you would buy a house. Understand and like it such that you’d be content to own it in the absence of any market,” Buffett said.

Your portfolio should have an appropriate number of assets. Small enough that commitments matter. Large enough that no single commitment matters too much.

What is rebalancing? It is the mechanism that keeps your risk level where you want it.

What is my rebalancing strategy? Equities versus cash. Warren Buffett in 1999: “You know that valuations are high by historic standards, you know that the level of speculation is high by any historic standard, and you know that that doesn’t go on forever. But you don’t know when it ends.”

Gosh I would love a 15 percent pullback. If there is ever a time when that statement is not true, you are probably over-invested or over-indexed.

Principle 13: Attention, Curiosity and Learning – Reading Is an Edge, Always Be Studying

Warren Buffett and Jamie Dimon read all day every morning. Being passionate enough to study, research, and read is a gift. Lean into curiosity.

Phil Fisher: “Read everything you can.”

Warren Buffett: “I have mainly learned by reading. I don’t think I have any original ideas. If you learn reasonably well from other people, you don’t have to get any new ideas or do much on your own. You can just apply the best of what you see.”

Buffett again: “I knew all the details of all these little companies that Charlie thought I’d never have heard of. I would find the equivalent of Moody’s manual, and I’d try to know everything about everything small. I would find something, and with $1M you could earn 50 percent per year. You need to be in love with the subject, not just in love with the money. People are successful in stocks because they just love looking for them. There’s certain people who just find it exciting to expand their knowledge in a given area. The human brain is complicated, but it does its best when you find out what your brain is really suited for.”

Carl Icahn: “But for people that make a lot of money, at least in business, or in any area, I think, the common denominator is an obsession, that they really are obsessed.”

Phil Knight: “Oneness – in some way, shape or form, it’s what every person I’ve ever met has been seeking.”

Brandon: “What might I have learned from paper trading? The feeling of missing out comes not from selling and losing money, but from not seeing an investment thesis or methodology through to the end, and then not knowing if it would’ve been bad or good, or apparently great.”

Principle 14: Art and Science, Subjective and Objective – Align Deep Research with Gut, Mind, and Vision

At the essence of investing is measured iteration. If you cannot analyze, you cannot understand.

If you can overthink the worst, why can’t you overthink the best?

Listen to the universe, not the markets. Before your two most frustrating down days, the red bird flew to you. You didn’t listen either time.

Big brain times little money times lot of time times exceptional insights.

Don: “IT CAN NEVER HURT TO REFLECT!”

A Thoughtful Ending

Benjamin Graham: “The ideal investment is one in which the future earnings are reasonably assured by established competitive position.”

When you are becoming a Buffett, you invest like Buffett. When you invest like Buffett, you are becoming Buffett.

Compound: 15 percent annualized is closer to 1/20th of a percent, 0.05 percent, each market day. Not half a percent. Half a percent daily would be enormous.

Enjoy life. And do not stop compounding once you start winning.

That is the whole ride. Uncomfortable. Unpredictable. Unapologetically slow. But if you can stay on it, the view at the end is worth every single awkward moment along the way.