2025年10月市场随想录

Today's podcast is sponsored by AlphaSense. This is actually a little bit of a different sponsorship because AlphaSense is hosting a webinar with my friend Doug Olaflin from Fabricated Knowledge on Tuesday, October 28th. The good news is Doug is coming on this podcast this Friday, October 24th. We will probably release it October 28th to coincide with the webinar. Doug is an expert, expert, expert in all things semiconductors. He is the president of SemiAnalysis, which is very, very popular among anyone who's interested in AI or semiconductors. But not only that, Doug is an expert in management incentives. Actually, he owns, I believe, the best-performing pitch of all time on Yet Another Value Podcast. That would be podcast number 166, when he came on and pitched Applovin at $20 per share on May 8th, 2023. I'm looking right now. It's October 20th, 2025. Applovin is at $566 per share. So that's a casual—I don't know, let's round—32-bagger. I am so excited to have him back on the podcast. I'll include a link in the show notes to the webinar that AlphaSense is sponsoring. Doug's coming on the podcast to get you to go listen to it. But I'm really looking forward to having him on. He is a wealth of knowledge. I think you'll enjoy it. I haven't listened to the webinar yet, but every time I talk to Doug, it is just always entertaining and always informative. So that is the sponsorship. We'll get to the podcast now.

I’m going to hop into the ramblings. Quick starter disclaimer: Nothing on this podcast is investing advice. I’m going to be rambling for about 30 minutes here, so remember, this is just a man who, as I look at myself in the Zoom, really needs a haircut and a shave, rambling for 30 minutes. Consult a financial adviser, and see the full disclaimer at the end.

Look, this is my monthly random ramblings. I hop on for about 30 minutes onto a Zoom, talk about a few things I’ve been thinking about and things that have been on my mind for the month. This is October 2025. The things I’m going to be talking about today are, first, Buffett’s age and a concept I like to call risk writing. Then I’m going to talk about companies that spend like drunken sailors on investor relations. Then I’m going to talk about two related things: averaging up and averaging down, and things that are cheaper today than they were yesterday. Finally, I’m going to end with a little mini-announcement.

Let’s hop into it. Sometimes on this podcast, especially in the ramblings, I like to test-drive something before I post it on the blog because it’s easier when you say something and put it on the podcast. It’s a little easier and friendlier; people kind of get what you’re saying more than just the hard, non-intonated nature of text.

Something I might write about in the future, but I’ve been thinking a lot about Buffett’s returns over the past 20 or 25 years lately. There’s a concept I like to call risk writing. What this is, is say you buy a stock and it goes up 20% for 3 years in a row. Awesome. Great. That’s a fantastic investment. But sometimes you’ll make that investment, and you’ll see somebody really spiking the football on Twitter about this great investment they made. I’ll look and say, “Oh, it’s very obvious that you had some huge tail risk.”

There’s the story—I think it’s Taleb’s—about the turkey that, for 1,000 days, thinks the farmer is its best friend, and then on the 1,000th day the turkey gets cut. You can make an investment that does 20% per year, and it can have been a great investment. But you could also make an investment that does 20% per year for several years, and in hindsight, it’s a great investment, but maybe you were taking a really big risk and it just didn’t pay off.

The very simple, advanced example would be: You might have been underwriting hurricane insurance, and you made 20% 3 years in a row because a hurricane didn’t hit, but the 4th year the hurricane might hit. The question there would be, did you calibrate the hurricane insurance correctly or not?

One that I really like to use, because somebody said it and it’s really stuck with me, is the big tech companies. From 2015 to today, and probably continuing going forward, they have been incredible, incredible compounders. Part of that is that the businesses are great. I don’t think many people understood just how great they were 10 years ago.

Part of that is they were run by controlling shareholders, or they had controlling shareholders, and they’ve really pivoted well. You look at Facebook: that product could have been dead 12 years ago if they hadn’t made the mobile pivot. Now there’s the AI pivot. These guys have been really good at pivoting in a way that previous businesses didn’t really.

But I think the risk-writing component to all of those would factor in. To me, the risk-writing component would be that a lot of these businesses had pretty serious antitrust tail risk, and the government never cracked down on them. I think there’s a different world where European-style regulations come to the U.S. earlier, Google gets cracked down on earlier, Facebook isn’t allowed to buy WhatsApp, or Facebook is forced to divest WhatsApp earlier, or Amazon gets really firmly looked at for retail antitrust practices here in the U.S.

I’m not saying any of these should have passed. I’m not saying that, but I do think there are alternative worlds where part of what you were getting in that return from buying Google, Facebook, Meta, whatever it is, 10 years ago, was this antitrust tail risk that never came to pass.

Why do I mention that with Buffett? I think Buffett’s—I’m going to say this in a way that I think some people will take in a negative light, but I actually mean it in a really positive light—over the past 20 years, or 30 years as well, if you invested in Berkshire, whether it was 20 years ago or 30 years ago, you beat the S&P 500. Berkshire has done something like 11% versus 10% for the S&P 500. So, you beat it.

It’s not like a smashing success, like investing in the Buffett partnerships in the 1950s and 1960s was, but you beat the index, and you probably did it with less risk, just given Berkshire’s underlying asset base. I honestly don’t know. They are very conservatively positioned, but they also write disaster insurance in their insurance business.

Maybe you got off lucky that there wasn’t a much bigger hurricane, or the classic earthquake in Los Angeles, or a nuclear-weapons attack, God forbid. You were writing that risk, but I think one risk factor that I’ve really been thinking about is Buffett’s age.

It’s really easy to forget that when the financial crisis happened and Buffett was making all those great investments—all those preferred investments in the banks, the Goldman Sachs and Bank of America investments that would serve Berkshire really well for years—he was buying stuff. He buys BNSF after age 75, when the financial crisis is just starting to happen.

Just for comparison—not to bring politics into this—Joe Biden was 78 when he was elected to the presidency in 2020, and we saw how quickly he went downhill. He might already have been there. Buffett was 75, and he was writing multibillion-dollar checks.

There’s a different world where Buffett is declining as the financial crisis is starting, and either he doesn’t make those investments or he’s making really bad investments. I would point you to John Malone. I just did the podcast with Byrne Hobart. John Malone’s past 10 years, when he was basically 75 to 85, have not covered him in glory in any of his investments, and especially his lieutenants. Everything has been really negative. They have not seen the ball clearly, and Liberty’s way underperformed.

Look at Carl Icahn. Over the past 10 years, Icahn Enterprises is down 50-ish%, versus the S&P 500, which is up like 450%.

Now, part of that is that IEP traded for a big premium to NAV, if I remember correctly, at the start. Starting-point valuations matter, but look at the past 5 years; look at the past 3 years. IEP has not covered itself in glory. And Icahn, if I remember correctly, is quite a bit younger than Buffett.

I would say, look, if you were buying Berkshire 20 years ago, one of those tail risks you were riding was the possibility that Buffett—even if he hadn't lost it—had a decent chance of losing it. And I would challenge you: if he lost it, how are you ever going to know that he's lost it until he writes a really bad investment?

Every time Buffett buys a stock, everybody says, “Hey, you don't bet against Buffett.” Oxy, right? Oxy hasn't done well. There have been several stocks that haven't done well, and everybody has misses. But I would just say, if you were buying Berkshire and buying it for Buffett and saying, “He's a genius. There will never be another like him,” he could make multiple bad investments in a row, and the stock would underperform for years. I think after 5 years, you'd point and be like, “Hey, did I miss it?” And you would be way down.

So I'm just really interested in that risk writing. Again, I think people are going to take that as a negative, but I actually mean it as a positive. The man is just a one-of-one. At 75, he goes into the global financial crisis and comes out not completely unscathed, but really, really well. At 85, the man buys his biggest, on a dollar-figure basis, profit—his most profitable investment he'll ever make—in Apple. At 85, this man buys Apple.

Again, I think it speaks to how narrow the edges we're talking about here are. Remember, when he's 80, he buys IBM, and he bails out of that pretty quickly. If you thought of it as a one-for-one, he bails out of IBM, and a couple of years later he buys Apple. Imagine a world where Buffett's just a little less sharp, and he sticks with IBM for another 10 years and doesn't make that Apple investment because of it.

Berkshire probably underperforms over the past 10 or 20 years just on that one swap, because of the concentrated portfolio and how much of a home run Apple is. So I don't have any firm takeaways. I'm not here to say YOLO one way or the other. I just think it's a really interesting thought experiment.

I know people are going to take it negatively, and I don't mean that negatively. I actually mean it really positively. The more I think about late-stage Buffett, the more impressive Buffett is to me, because he's operating within the constraints of a $1 trillion balance sheet and at 85 or 90. Again, I'm talking about younger people than him who—I don't want to say lost it, but have clearly lost a step, or multiple steps—whether it's Joe Biden at around 80 in the presidency, or Malone and Icahn, 10 years younger, having trouble keeping up with the new, moving environment.

I remain incredibly, incredibly impressed by Buffett. I think a lot of the things I'm talking about are relevant because Buffett is stepping down this year. He's going to become chairman emeritus. He's going to have a new CEO, and he's going to have a new chairman. The new people coming in are a lot younger.

But I do think Berkshire as a whole has a lot of that tail risk writing. When you think about the transition from a founder-led conglomerate to the next generation, especially at this size, and especially as the incentives shift from Buffett, who had been a 20% shareholder, to people who have big stakes in it but aren't founders, I think there are a lot of things that investors in Berkshire need to be thinking about.

Okay, that's it there. Again, I understand some of that could come across critically. None of that was meant critically. The more I think about it, the more impressed I am by Buffett.

Let's move on to the next thing. One thing I've been thinking about a lot is company spending, and this probably relates to cockroach theory a little bit, but particularly company spending on investor relations. I mean this both in time and in money.

There are a few companies I've seen recently that have been spending money like drunken sailors on investor relations programs. You can point to this in a lot of ways. There's money—and I'll get to money in a second—but there's also time. Whenever I hear about a company, particularly a large company, where the CEO is spending all of their time talking to investors in some way, shape, or form, I kind of wonder: that CEO's time has value, right?

When they're spending all their time talking to investors, particularly small shareholders—and not to belittle small shareholders—the CEOs of several companies I'm aware of are willing to spend a lot of time talking to them. I look at that and think, “Hey, this guy's going to buy—you’re a $750 million company, and this guy might buy $7,500 of your stock—and you're spending 2 hours across the course of 2 weeks talking to this guy.” That's nice, but that doesn't seem like a good use of your time.

I know you could extend it to companies just having IR teams in general, or having big IR teams. That's one area I've thought about, but the other side I've really thought about is the pure dollar-figure side of it. I'll give one example that might highlight this nicely.

About 10 years ago—no, probably 13 years ago—I went to an energy company's analyst day. At the analyst day, they gave out rechargeable batteries that you could use to charge your phone and iPad on the go. These things were awesome. They were rechargeable, and you could recharge them with the sun. They were solar-powered, so you could go outside, set the thing up, let it take in the sun, and then charge your phone.

They probably cost $100 or $150. I think I looked at the retail price at the time, and it was $135. They gave them to every analyst who attended. If this was a decent-sized company, we're talking about 200 analysts. So you're talking, if I'm doing the math in my head correctly, about $30,000 to $35,000 in gifts to analysts covering the company, to say nothing of the night before the analyst day, when they host a big dinner for the analysts and a networking cocktail event.

You're talking about $200,000 for this analyst day—probably more. I was just thinking about that. That's traditional IR stuff; I get it. But is that really a good use of shareholder money, or is that a way for the top guys to schmooze and booze?

There are other examples. There are multiple companies that make consumer-focused products, and when you go visit them, they will hand out the products like crazy. If it's an energy drink company and they hand out Monster, and they hand out 1 free Monster, whatever—what's the COGS there? $2.

But I know of companies that make consumer-focused products that go for $50, $100, or $150. If you go visit them, the CEO and the chairman will hand them out like candy to shareholders, potential shareholders, and analysts. I always look at that and think, “Hey, it's a nice gesture, but that's shareholder money that's getting spent. What's the return on that?”

I don't have anywhere I'm trying to drive here, except that when I see that, I never know: is this indicative of a management team or a company that treats shareholder money like funny money? Or is there a return there, or is it so small-scale that I shouldn't even be paying attention to it?

I honestly don't know the answer, but I will tell you my bias is toward this being a management team or company that's treating shareholder money like funny money, and I don't like that. Maybe that's just because I'm a miser. I don't have very many expensive hobbies. I don't know.

But I will tell you, I've got a lot of distaste for it. When I see it, I'm actually much less inclined to buy a company, look at a company, or do all that sort of stuff with it. I don't know if that's a shortcoming of mine or not, but that is the second thing I want to talk about.

You can tell it's been on my mind because there have been 2 or 3 prominent examples popping up in my mind over the past month. I don't know how to weigh that factor, and I think it's really interesting.

If you came to me and said, “Hey, I've got this great company, blah, blah, blah,” and I said, “Oh, I've been to their headquarters, and they were handing out free treadmills”—it's a treadmill company, and they were handing out free treadmills to every single investor who walked in—guess what? That's not nothing. It will go into the COGS numbers. Technically, it would be in the numbers, but you would never see it in the COGS numbers.

That's something that no quant fund, and no one else, is going to know. You have to go to the company and engage with them to find that out. That's very proprietary, very unique data. I'm not saying that it's going to make or break an investment, but I could imagine a world where—I like to think a lot about what pod shops and quant shops don't have.

That type of stuff is something that you have to do the work to find out. I do think it’s kind of proprietary. I think it’s kind of edgy. I don’t know the right answers for how to use it, but it’s something really interesting that I think about.

Let me go to another thing I’ve been thinking about. There’s a tweet—and I’m so sorry, somebody tweeted this out. I don’t think it’s a widely followed account, but you can tell it’s living rent-free in my mind because it’s still here. The tweet was, “Everybody wants to average down, but no one wants to average up, and that’s why there’s alpha in averaging up.” I might be paraphrasing this.

I’ve really been thinking about that a lot lately because I will tell you, I’m a classic value investor at heart, and I want to average down, right? A stock goes from 10 to 9, and my instinct is to buy. A stock goes from 9 to 8, and my instinct is to buy. That is very dangerous, right?

The way most value investors who blow up do it is—John Hemp from Bronte Capital had the best way of putting it: You start out with a 2% position at 50, you double down at 25, you double down again at 12.50, you double down again at 6, you double down again at 3, and it goes bust. Boom, that’s how your 2% position turned into a 10% loss of the fund, right?

Personally, it’s very hard for me not to do that, right? I’m a value investor. If the stock was at 50, yes, I do love it more at 30 than I loved it at 50. Hopefully, I’m adjusting. If the facts have changed, then I have changed my mind, ma'am. But that’s my instinct. I don’t average up much, and I think that’s a failing on my end. It’s something I’m working on, but this tweet really changed my thought process on it.

A stock announces great earnings and goes up 20%. My instinct is to sell, not buy. Probably the wrong instinct, and it’s something I’m going to work on and continue to think about. But that tweet, as you can kind of tell, has been living in my mind, and I think it’s actually accurate.

There are momentum strategies and things like that, and they tend to work. I think this is why: The people who know a stock best and buy it at 10—when it goes from 10 to 13, they are probably the people who know it best, and they’re probably the people who struggle the most to buy it because they say, “Hey, yesterday it was 10. It’s hard for me to buy it at 13.”

Well, yes, yesterday it was 10, but look: At 10, it might have been, “Hey, there’s one branch where this is worth 30, there’s one branch where it’s worth 20, and there’s one branch where it’s worth 0.” Maybe it’s gone to 13, but the branch where it goes to 0 was a 33% chance before, and now it’s a 2% chance. So it’s a much better risk-adjusted bet at 13. I think about that a lot. I’m trying to push myself on it and trying to think about it.

There is one other aspect to it. Most value investors run pretty concentrated. It’s hard not to run concentrated if you’re a value investor, just because you can only do so much work on so many ideas, among a lot of other reasons. If you’re running concentrated and the stock goes from 10 to 13, it’s really darn hard to add because now it’s worth 30% more of your portfolio. If it was already quite a bit of your portfolio, now it’s quite a bit more. You might be running into fund-level limits, risk limits, or sleep-at-night limits. So that’s another thing to consider, but it’s something I’ve thought about that’s very related.

Let’s go to the other thing I wanted to talk about: “Cheaper today than it was yesterday.” You could probably tell this would fit very nicely into the decision-tree branch I just outlined. One thing I have been thinking about, and I’m trying to get better at again, is when a stock announces good news and goes from 10 to 11. You could imagine a world where I thought the stock was going to earn $1 per share this year, and then they announce good news and now I think it’s going to earn $2 per share this year. The stock goes from 10 to 11. Well, hey, the P/E just went from 10 to 5.5 in that math, right? It is cheaper today than it was yesterday.

I’ve been thinking about how you get yourself to buy. Is that true? There is one way to look at it: Does the way it went from $1 per share to $2 per share in my hypothetical example matter? I’ll give you an example. If they’re going from $1 per share to $2 per share in earnings because this is a company that had a lot of fat and they’re finally cutting costs, and they’re saying, “Hey, we’re cutting costs. Our expense base is coming way down, so we’re going to show a lot more of those earnings through,” that’s great. But that’s a lever that you probably already had in your model and were already thinking about. They’ve pulled it, and it’s great that they’ve pulled it now and are bringing all that cost-cutting—all that time value of money from the cost-cutting—forward. But that’s a one-time thing.

That’s versus, “Hey, does it go from $1 per share of earnings to $2 per share of earnings because they come out and say, ‘Guys, things are going gangbusters, right? We thought we were going to grow at 10% this year. We’re growing at 40% this year. We can’t keep up with demand. By the way, we just did a new product launch. Everyone thought we didn’t build it into any of our models, but the new product launch is going great. Demand is through the roof.’”

Those are 2 very different sets of circumstances. The cost-cutting was one-time, and it will continue into the future unless management loses its discipline and lets the fat build back up. That is nice, but revenue going through the roof is a different thing. Lots of different businesses still have that cost-cutting lever to pull if it ever needs to get pulled. Those are 2 very different examples.

So, another thing I’ve been thinking about is when something is cheaper today than it was yesterday. When should you be pulling the trigger when something is cheaper today than it was yesterday?

But to all this—the averaging up, when everyone wants to average down, and the “cheaper today than it was yesterday” points—the other big risk is that it’s very easy to let your emotions get the better of you. I know I’m not immune to it. A stock goes from 10 to 12. It was a medium-sized position, and now it’s a pretty big position. I’m more excited about it today than I was yesterday. “Hey, I’m making great money on it. I was right.” How do you avoid getting caught up in the emotions?

I’ve had stocks go from 10 to 20, and I’m like, “Yes, this is on the right path. I’m doing this. This is going to be great.” Then 2 days later, it’s back down to 10 or back down to 8. It was a short squeeze—I don’t know. But it’s very easy when the stock is working to say, “Hey, I was being too conservative on everything,” and let loose the dogs of Excel and start taking all your numbers up and underwriting 18% growth into perpetuity, whatever it is. How do you balance those 2 emotions?

I don’t have any great answers. These are just me rambling. These are the things I think about a lot, and I’m trying to get better at a lot of them. If you’ve got advice, I’m always down to swap thoughts and hopefully be thoughtful about these things.

Hopefully, Buffett—I started this podcast off talking about the risk writing of Buffett. Buffett was 75 and still hitting it out of the park and still evolving. He was 85 when he bought Apple. The good news here is I’m not quite 40, so hopefully I’ve got at least 15 or 20 years to continue to evolve, develop, and improve before I start having any of those worries. Fingers crossed.

Speaking of getting old, and fingers crossed that I’m close to 40, a little personal announcement: our second baby is coming in mid-November. Why should that matter? First, you’ve been listening to me ramble for 30 minutes. You’ve probably developed a little bit of a connection with me, and maybe you want to hear what’s going on in my life.

But how it really matters for you is that I’m probably going to take the next 2 months off. Not from the full podcast, but from the random ramblings where I take 30 minutes, drink my coffee, and ramble about things that are on my mind. My mind is going to be pretty cluttered for the next 2 months with little babies, late-night wake-ups, and all that sort of stuff.

I’m going to be working. I think I’d go crazy if I didn’t work. My wife will tell you that I’d go crazy if I didn’t work. But I probably won’t have quite the time for ramblings, for sure. The podcast is going to be on a little mini-hiatus, probably on a slightly slower schedule than normal as I figure all of that out.

But I’m terrified. Is “terrified” the right word? I’m excited, but I’m terrified. My wife is doing great. She’s got more energy than me at 8 months pregnant, and she’s doing great all around. But we’ve got the baby coming. It’s exciting, but it could come tomorrow. Hopefully not—it’s due in mid-November—but it could come tomorrow.

Don’t be surprised if you see this podcast feed and the newsletter go blank for a couple of weeks while I go through the real hell of it and try to get everything aligned. But I’m really excited for that.

I appreciate you understanding why the podcast might be a little bit out of line for the next couple of weeks. But look, I'll be missing you. I'll be thinking about it. We have some great guests lined up between now and then, so you'll hear those.

I promise you, when I come back, you'll have the ramblest rambling of all time because I'll have three months of stuff stored up, plus a lack of sleep from the baby. I appreciate all your support. Again, this is a ramble. I don't know if I'm right, and I don't know if I'm wrong. I'm not trying to be right on any of this.

But if you want to swap thoughts, anything, emails are always open. I appreciate all the support, and I'm looking forward to seeing you on the other side of the baby in terms of ramblings.

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.