2026年2月：随想杂谈

Today's podcast is my monthly random ramblings for February 2012. I'm just going to hop on and ramble for—I can't even remember. I think it's about 30 minutes. I don't know. Time was flying; time was going so slowly because it's a terrifying thought process.

I mainly talk about the SaaS apocalypse that's going on. The AI fears are bleeding into all sorts of sectors all over the market. People are wondering how it's reshaping things, and I don't have answers for you. I just have a long, rambling discussion: AI is improving exponentially, and humans are really, really bad at dealing with exponential improvement.

On the one hand, I always want to be the person running into a panic, like a gunslinger running into a firefight: bam, bam, bam, bam, just spraying money everywhere. That's my instinct in a panic. I've done it a few times, and I wish I had done it harder. I wish I'd done only that over the past few years.

On the other hand, you see this panic, and AI is coming for things that have no tangible assets. In a SaaS company, all the value is in the software engineers, all the value is in the contracts, and all the value is in those cash flows. Those could get replaced really quickly by AI. Exponential progress is coming for things that have no tangible assets, and that's scary.

I've got no great answers for you. I've just got a 30-minute rambling discussion, and then I'll end it with some thoughts on being an investor, which requires a really delicate balance of arrogance and humility. How do you keep updating your thoughts? How do you make sure you're not becoming the person on CNBC who's been saying, “I'm bearish on the market,” since 2011? Those are some thoughts there. That's my monthly random beliefs.

We're going to get there in one second. But first, a word from our sponsors.

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All right. Hello and welcome to the Yet Another Value Podcast. I'm your host, Andrew Walker. With me today—it's me. I'm on for my monthly random ramblings for the month of February.

I was going to do this next week or the week after, but a podcast guest rescheduled, so I had some extra time. I was like, “You know what? I've been thinking about a lot. Let's get on and ramble.” So I'm going to ramble about some stuff today.

Before we get there, a quick disclaimer: nothing on this podcast is investing advice. I don't think I'm going to be talking about any specific stocks today, just general market thoughts. Please remember, nothing is investing advice.

I'll tell you a story. I got a haircut recently. You know why I got a haircut? Because somebody came onto one of the YouTube comments and said, “Dude, your hair is so floofy and out of control. The blur on the background of your Zoom screen can't even pick up your hair.” I was like, “Oh, dang. If it's that out of control, you need a haircut.” I'm taking advice on when to get haircuts from randos on YouTube. Should you really be listening to me about anything on investing? No, absolutely not. See the full disclaimer at the end of the podcast.

I'm recording this on Thursday, February 12. Let me start with the thing that's just really taken over the markets so far this year: the AI pain spreading throughout the markets. The place where this is most obvious is software as a service, or SaaS, which is just blowing up every day because people are saying, “Hey, is everything going to get ripped out by AI?” But it's spreading to other places.

I'm recording this on February 12. Office is blowing up today. You can go look at a bunch of office stocks that are down 5%–10%, which are big moves for office buildings. I think the market is saying, “Hey, are all these companies going to fire everyone, and are all the offices going to be empty forever?” I don't know, but it seems to me that's the only thing I can think of.

Another one is LTL trucking. These are things like RXO, ODFL, and all these types of stuff. They're down huge today. RXO is down like 20%. ODFL is down, I'm typing it in, 5-ish percent. They're down because—I believe it's because—some fly-by-night penny stock released a paper on using AI for LTL, and they're down.

It's spreading wildly and really quickly. Earlier this week, we saw insurance get hit, and we saw brokers get hit. It's spreading really quickly throughout. It's not just SaaS; it's everything else blowing up.

In general, I wish I had done nothing in my career but run into panic. I like to say that, in panics, I view a panic as somebody shouting “Fire!” in a crowded theater, and I want to be running in when everyone's running out. That's my instinct in these things.

The last two panics I can think of were banks and busted biotechs: busted biotech in early 2025, and banks in early 2023 after the SVB and First Republic crash. To be honest, I wish I'd done nothing but focus on those opportunities over the past couple of years because they did incredibly well. Every panic's different. Everything's different.

I'm worried here. There's no doubt to me that there is a panic in SaaS and a lot of these sectors. I'm focused specifically on SaaS, but it's starting to apply to other sectors. Over the past week, you'll see days where every SaaS name is down 10%. These are names that have nothing to do with each other.

The ones I like to compare are Salesforce, which is literally enterprise-level CRM, and Duolingo, which is consumer, quote-unquote, learning how to learn a foreign language. I use quotes because I did Duolingo for 2 years, and I think I learned 10 words of Polish despite doing it every day. You'll have those two down 10%, and the whole sector is just going to get hammered.

I've seen panics before—the banking panic, the biotech panic, and other panics. When you have whole sectors that are down 10% on the day, and you know it's just completely disparate names getting hammered, that's generally when there's a panic, and that's generally when there's dislocation. I want to run into that panic. That's my gut.

It's hard with SaaS. With banks, there were worries about bank runs and everything getting zeroed, but with banks, you have a bunch of tangible equity. You've got a business model that has been around for—the second-oldest business in the world, for a reason. It's been around for 5,000 years. It's hard to say, “Hey, we're not going to have banks going forward.”

Even if you were a crypto maximalist saying, “Hey, every bank going forward is going to be run on the internet or whatever,” these were banks that had $1 billion of tangible equity and were selling for $600 million or $700 million, way below book. If you were confident, you could go in and do the mark-to-market adjustment and say, “Hey, Silicon Valley Bank blew up because they weren't marking their bonds properly.” If you went into these banks and said, “Hey, these bonds and these loans are marked properly, and I'm still buying for a big discount,” the risk of a run on the bank was gone. They were great values.

With biotech, part of the reason biotech sold off last year is because people were worried about the FDA. I think those concerns are borne out a little bit by some of the stuff we're seeing at the FDA, with the FDA pulling the plug specifically on gene therapies and stuff, but neither here nor there.

With biotech in March and April, these things were trading so far below cash value that you no longer had to worry. They weren't even science projects anymore, right? If the science was dead the next day, you had capital-allocation issues.

Anyway, what I'm saying is that both of those had hard assets. With software, the issue is that there's not really a hard asset there. These were trading at multiples of revenue 2 years ago. Now it's multiples of cash flow, I'd say. But still, the earnings there can evaporate quickly, and when they do, there's kind of nothing left over for the equity holders.

Even if you come to this and say, “Hey, you can't replace Salesforce with a vibe-coded CRM,” that is true today. But the AI stuff is improving at an exponential rate, and I would point you to go back 2 or 3 years ago.

It’s like a picture of Will Smith. It’s a video of Will Smith doing stuff. The version from 2 years ago kind of looked like a horror movie where the character was made of wax or cheese and was melting, had 8 fingers, and was stop-motion doing everything. It was terrible, right?

Then you fast-forward to today, and people treat this all the time, right? It’s the V1 versus V4 of a bunch of different models. You fast-forward to today, and they make these things that are indistinguishable from A-level Hollywood movies. These videos are getting made instantly, right?

You can say, “An AI tool can’t replace Salesforce. It can’t replace whichever SaaS service you want right now.” Okay, maybe it can’t right now. But if these things are improving exponentially, how long until a spun-up Salesforce, or a spun-up version of whatever SaaS tool you want, is at the same level as the enterprise-level thing? It’s going to be really effing fast.

I saw some people saying specialty insurers or something would sell off on Monday because Anthropic rolled out a basic insurance product. I saw some people who instinctively said, “How stupid is the market? Specialty insurers are selling off on this? It’s not even a competitor.” I think that’s exactly wrong, right?

Innovation happens at the lowest level. If an AI tool rolled out a very basic product saying, “Hey, we can price life insurance,” and life insurance is very standardized across all markets, and it can price life insurance better than anyone else, then they’ve rolled out a very standardized model. I think it’s right to look at that and say, “Hey, if they’re doing life insurance perfectly right now, in 3 years they’re going to be able to do specialized insurance. They’re going to be able to do anything.”

I want to go in and buy it, but my concern is that it’s very hard for humans to understand exponential progress and where it’s going. It’s scary. There are lots of pushbacks there, right?

One pushback that I’ve kept top of mind—I remember in 2021 or 2022, every now and then I’d have a college student email me. They would say, “Hey, I think Twitter is a short. Here is a Twitter competitor that I coded on my own inside of a day.” That was exactly wrong, right? Cool, you can code Twitter. It’s not hard to recreate the Twitter website. The website itself is not what’s unique about Twitter. It’s the network effects. It’s all the people being there and all the eyeballs on it.

Twitter has proven it time and time again: those network effects are extremely difficult to break. Just because Anthropic, Claude, or whatever it is can code a Salesforce competitor does not mean it has made a Salesforce competitor. There are lots of people involved, there’s a lot involved with Salesforce, and there are lots of things that matter. No company is going to switch over whole hog to, “Hey, Claude made something that visually looks like Salesforce.” That’s not a working model. So that’s just one caveat to the downside risk. I do think if you play it out, it gets pretty scary.

Just a few other things I want to talk about: with banking, I think you could be a generalist and buy into the banking panic and do pretty well 3 years ago. Banking specialists could have done a little bit better, but being a generalist, all you really had to do was look at the balance sheet, read the footnotes, and say, “Hey, this bank has a good deposit base. It doesn’t have these huge mark-to-market issues with bonds, loans, or whatever it is, and it’s trading way below book.” If you did that across the board, you generally made pretty good money in banks during that panic.

Biotech was the same thing. If you said, “Hey, this company is trading for way below cash, and they’re not burning it on insane science projects”—I don’t think any biotech is ever really that aligned, but there are shareholders who are kind of aligned—you could make pretty good money.

With SaaS, it’s really difficult to be a generalist and come in here, right? Again, all the business models are very disparate, and you’re definitely going to see different impacts from AI across a lot of these companies. When I talk to sector specialists, they’re talking to CIOs, doing expert calls, doing panels, and conducting surveys all the time. Going in as a generalist and saying, “Hey, I’m going to buy into this panic,” when you’re competing against sector specialists with that type of check, is kind of scary.

I’ll just give you one example. I’ve done some calls. I’m sure sector specialists are doing a lot more, but I’m hearing in real time that someone I talked to 3 months ago who was saying, “Oh, yeah, I’d never use AI for that,” is starting to say, “Oh, I’m thinking about it,” or, “I’m changing some habits around the margin.”

When you’re picking up on that and saying, “Hey, this SaaS company looks cheap on a trailing basis. Let’s take out the stock comp, and they’re trading at 10 times free cash flow,” it’s really scary when you’re hearing that, within 2 months, people at a business with no tangible assets are talking about changing how they use it or how AI has impacted things. It’s really scary.

One thing—and I’ve had multiple people point this out to me—that you probably want to see is that the highest-end people are always the slowest to roll out changes in technology, right? They’re always going to be the most cautious. Your largest banks, your JPMorgans of the world, are generally going to be pretty slow to adopt things.

Actually, banks might not be a great example, because it was the smaller banks that were the slowest to adopt online banking. But the largest players are generally going to be slower than the smallest players.

One thing I’ve heard a lot of people say is that you probably want to survey 50 CIOs of companies that have about 500 employees and ask them, “Are you using Salesforce? Are you using XYZ?” You want to see how many of them say yes. Then you probably want to survey companies that now have 25 employees and see how many were using Salesforce, or whatever SaaS product you want, 2 years ago when they were a 500-person company.

You want to see whether small companies are starting to delay when they begin using the SaaS products that larger companies would have used 2 years ago because they can use AI tools. If you’re starting to see that, it’s going to start bleeding up to the larger companies. That’s one thing I’ve been thinking about.

There’s always 2 sides to a coin. You’re seeing SaaS blow up, and I’m seeing a lot of people pounding the table on hard assets, right? For the first time in a while, over the first 6 weeks, you’ve seen a lot of hard assets and more cyclical stuff really start to catch a bid. It’s been kind of interesting. It’s like a reversal.

I’ve seen some people say, “Hey, maybe hard assets are catching a bid because they’re a flight-to-safety trade, right? You’ve got this great coal mine in Virginia—I don’t know if any coal mine is great—but you’ve got this great coal mine in Virginia. It’s going to be producing coal whether AI replaces all the jobs or not. Honestly, it might be a coal beneficiary because AI demands so much power.”

There are lots of other examples. Steel is one. One that I’ve written a little bit about and thought about is cement. We’re going to be using cement 100 years from now, whether AI is here or not. Cement is the basis for roads and buildings. I’m sure we’re going to be building roads and buildings, and cement gets used a lot in AI data centers. I actually think there are tailwinds to that.

It’s a very local market, right? I don’t think AI is going to solve the fact that cement is really heavy and difficult to ship long distances. I’ve seen lots of people talk about hard assets as a flight-to-safety trade because they’re kind of AI-proof, and that’s probably right to some extent.

But I will say, be careful what you wish for, because a lot of these hard assets might be replaced by AI. Again, people are starting to worry about office buildings: What if all the office buildings are empty because of AI? I think that’s overblown. But I would point to power.

I mentioned coal, right? People are saying, “Hey, oil is going to be in demand. Coal, whatever it is, is going to be in demand.” AI has probably been great for power so far. AI has really increased power demand. But I do worry about AI. It is so smart. What if AI cracks the code on efficient batteries and storing power?

That’s really bearish for coal and natural gas, because all of a sudden, you could combine solar and wind with efficient batteries. If AI cracks that code, it gets really bearish for that type of stuff.

Anyway, the SaaS apocalypse and the AI aftereffects have been on my mind, as you can tell, because I’m rambling. I don’t know the answer. I don’t know the answer, but I’ve been thinking about it a lot.

I guess I’ll jump back in. One other thing I’ve thought about: I do think a lot about media as it pertains to SaaS right now, right? Media in the 2010s—the cable bundle was the greatest thing. It was probably the greatest business that’s ever been invented.

Once you got distribution, you had a huge network effect. It was very difficult to take you out. You could get kicked out, but particularly if you had sports rights and stuff, it was just awesome. One of the reasons it was so great is because, for a lot of entertainment, there were huge distribution costs.

If you wanted to make a TV show or be a news broadcaster, you needed distribution—you needed to be carried on a lot of channels—and you needed a studio, a lot of equipment, and a lot of people behind the scenes. Those costs have come way down. In 2010, if I told you YouTube and the iPhone were going to destroy the cable channels, you’d probably look at me like I was crazy, but they have really destroyed the cable channels, right?

Netflix plus Warner Bros. might get over the finish line because they argue YouTube takes up more time than watching Netflix does. What has YouTube done? It’s brought distribution costs way down, and it’s made it possible for one person to be the star, whereas before it would have taken a whole team.

Where am I going with this? I do wonder if one of the things with AI is that, previously, if you were a SaaS company, scale was important, right? You needed hundreds of software engineers and hundreds of salespeople to get that everyone would develop one product and sell it out, right?

I wonder if you played this out in the YouTube analogy, what happens is you don’t need hundreds of people. Claude Code can vibe-code a CRM or something, and what you need is 1 unique software engineer—or 3 unique software engineers—and 2 great salespeople.

What they do is go to big companies and say, “Hey, you choose us, and we’re basically going to be with you full-time, right? We’re going to be there holding your hand. We’re going to have AI spin up a CRM, and then we’re going to custom-code it. We’re going to make the last 5% of tweaks around you so that you’ve got a custom CRM that fits and works exactly for you.”

I wonder if it’s fragmenting, right? Whereas before, in the network era, it was, “Hey, there’s 1 star who makes all the money and gets all the fame.” In the YouTube era, the TikTok era, there are hundreds of stars who are making tons of money.

I’m starting to get more grays on my head. I have no clue who the 20-year-olds are watching on TikTok, but there are all these TikTokers who are making more money than you can believe, right? But they aren’t nationally famous like Jennifer Aniston or Wolf Blitzer was from years back.

I guess what I’m driving to is, I wonder if AI, because it brings the cost of distribution down and the cost of scale down, means you see lots of things where, hey, I’m the best software engineer. 10 years ago, I would have gotten employed by Oracle or Salesforce. Going forward, I get employed and kind of work my own business.

I’ve got 2 great clients. I partner with my best friend, who is the salesperson and really maintains that relationship. I’m kind of just coding around the edges, and I actually get paid more. Now, maybe it’s a riskier model. I don’t know, but that’s what I’ve been thinking about.

I’ve really been rambling. Okay, that’s SaaS. Let me just go to one thing. Let me switch completely. One thing I’ve been thinking about is arrogance, humility, and updating your priors, and I’ll end by talking about that.

Let me start with updating your priors. I’ve had friends who have been bearish on AI for 18 months, right? They’ve been saying AI is a bubble, it’s all going to blow up, and it’s going to be a disaster. Maybe they’re right, maybe they’re wrong. I have no idea, right?

Maybe it is a bubble. AI is obviously reshaping a lot, but the internet in 2000 was reshaping a lot, and it was definitely a bubble. I have no idea. But when would they say they’re wrong? When would they update?

If you say AI is a bubble for the next 50 years, at some point AI is going to have some stock market crash, and I guess you could say you’re vindicated. But when do you update? When do you say you’re wrong?

For me, I’ve been saying for the past 15 to 18 months that I found the market a really confusing place because all the AI stocks power higher, all the power stocks power higher, all the Magnificent Seven stocks power higher, and everything else has been kind of left behind.

If I’ve been saying for the past 18 months, “Hey, I’m a little confused by the markets, and I’m a little bit more on the bearish side than I normally am,” and I just keep saying that for 18 months, when am I failing to update my priors? How do I update my priors? When it’s kind of a macro view like that, how do you update? How do you evolve your views?

We've all seen him on CNBC: the guy who says, every time he comes on CNBC, “I’m bullish. The stock market’s going to go up 20% over the next 12 months.” Or the guy who’s been bearish since 2011, saying the stock market’s going to drop by 30% and it’s way overvalued every year for the past 15 years, while the market just, in general, rips higher and higher.

I’ve been thinking about how you avoid becoming a talking macro head. How do you have beliefs, but shape them as the market evolves? This probably applies to companies, too. How do you shape your views around companies so you’re not just responding to the stock price?

I find that a little easier because, as I mentioned with the AI thing, you can do expert calls and all this sort of stuff, but I’ve been thinking a lot about it.

Related, I’ve probably said this before, but it’s something I’ve been thinking about. It’s something I think about a lot, and I’ll just say it again here now. Being an investor is a weird job because it requires a level of arrogance and humility that you almost need to balance on a knife edge.

It is very arrogant to go and be an investor and say, “Hey, I’m going to generate alpha. I’m going to go into the stock market, the most competitive game, and I’m going to figure out a way to beat the market.” That is very arrogant. With arrogance, a lot of times, comes blow-up risk, right?

You’re arrogant and overconfident. You say, “I’m smarter than the market.” You find an opportunity you like, it’s at 100, and you plow all in. It goes to 80, and you double down. Maybe it works a time or two: it goes from 100 to 80 to 400. But if you are arrogant and you don’t deserve it, or you double down every time, eventually it goes from 100 to 80 to 40 to 0.

I use “double down”—double down is one of the scariest things in finance, right? But you can ignore that. If you’re the type of person who does a lot of work and takes a 20% position, eventually you will be wrong, and it’s tough.

Now, if you’re right over time, you’ll be great. But a lot of times, the investors I see do great for 5 years because they’re taking 20% positions and they’re generally right. Then, 1 year, they take 20% positions and all of them are wrong, and they go down 80% and it’s all over, right?

There’s an arrogance there that has to be balanced with humility. The humility is being willing to be open to new information, change your mind, not double down, and sell when you’re wrong. There’s an aggression-and-passivity balance there, too, right?

You’re arrogant and say, “I can beat the market.” When you think you have an edge, you need to be aggressive. You need to swing hard. But you need to have some passivity, where just because you think something’s a little bit edgy, you don’t take a swing. You really wait for your thing.

I don’t quite know where I’m going with that, but the balance between the 2 always weighs on me and makes me think and makes me question. I’ve said it before and I’ll say it again: investing is a very mental game, and over time I find it to be more and more mental.

That push and pull of, “Hey, this looks interesting. Do I make the swing? Am I being arrogant to think I have an edge when I’m looking at this, that I can analyze this better? What is my alpha? What is my differentiated take?” It’s very, very difficult to think about.

Anyway, those were my ramblings for February 2026. One last thing I should mention: one of the reasons I throw these ramblings out there is because I’m arrogant. I’m a narcissist. I like to listen to myself talk, and I like it when people listen to me talk.

But the real reason is, aside from that arrogance and narcissism, I love it when people respond to me. I love to chat with them. I get a lot of value out of it. A lot of the things I talk about on here are things that people reach out to me about and that I chat with them about.

In general, the me of 10 years ago thought Walter Schloss investing in a windowless room and just reading 10-Ks was the ideal. But increasingly, I find that doing a podcast on this, talking to smart people, and talking to them about the markets and evolving your views really helps spur you to think deeper, think harder, and learn new things.

What I’m saying is, if you like the ramblings, if you didn’t like the ramblings, whatever, shoot me an email. I’d love to discuss anything that’s on your mind that relates to this—something that would make me smarter, make you smarter, make us both smarter, and make us both a little more likely to outperform.

I’m going to wrap it up here.

It is February 12, 2026. I’ve got some great podcasts coming up for you in the near future. I’m looking forward to sharing those with you and rambling again in March. Have a great month. We’ll talk soon.

A quick disclaimer: Nothing on this podcast should be considered investment advice. Guests or the hosts may have positions in any of the stocks mentioned during this podcast. Please do your own work and consult a financial adviser. Thanks.