2026年10月随兴漫谈

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You're about to listen to the Yet Another Value podcast with your host, me, Andrew Walker. It is Tuesday, October 12th, and today is my monthly random ramblings for October. Before we get into that, a disclaimer: nothing on this podcast is investing advice. That’s true for every podcast, and particularly true for today, because it’s just me, a random guy alone in a very small office, rambling to you about things.

I can’t tell you why, but I just start talking into the mic and go. Maybe it’s because I like the sound of my own voice. Today, I think it’ll be a really interesting one—just some things on my mind.

The first is M&A. If somebody is considering a bad M&A deal, or announces one and then pulls back, how do you think about that? Do you give the company credit for pulling back from a bad idea, or do you ding them because they had a bad idea, almost executed on it, and were forced not to? That’s the first thing we’re going to talk about. We can discuss it through the lens of SOLS, Solstice, and the Starbucks–Chipotle rumors.

Then I’m going to talk a little bit about the indices, just a state-of-the-markets kind of thing. Indices are up broadly, in the double digits. Domestic indices are up double digits year to date. But that’s not how I feel when I talk to a lot of my friends. A lot of them are despondent. Maybe that’s because there’s been a big pullback, or because there’s a lot of churn and blood underneath those headline levels. I’ll talk about that a little bit.

Then we’re going to talk about unexpected competition through the lens of IMAX, FICO, and Netflix. There’s this really interesting piece on microdramas, which are becoming really popular in the U.S. I think they’re quite popular in a lot of overseas markets, too. If I said, “Hey, somebody’s going to film 20 90-second clips that are very formulaic, quick, and twisty,” you might say, “Okay, that sounds pretty cool, but I don’t think that’s going to be a big business.” Well, it is a big business, and I think it’s going to start cutting into legacy media. Netflix, in particular, is a really interesting one to think about.

Then we’re going to talk about how I ran a HYROX. I’m a WHOOP member. Here’s my little WHOOP on my wrist, for those of you watching. Oura pulled its IPO. I want to talk a little bit about that IPO, and in particular, the Oura business. If you’d thought about Oura four years ago, I don’t know if you’d have been thinking about this huge AI data play. Maybe you would have; I don’t know. I’m not an investor. But that really became a thing as they were approaching a $15 billion valuation, which just seems insane to me. I’m also thinking about other businesses that could have that kind of value—that could be one thing, but then have a big AI tailwind increasing their value. The one I think about, in terms of a tailwind that wouldn’t be continuous but would boost their current asset value, is home builders.

While I’m rambling, the other interesting thing with Oura and WHOOP is that they’re IPO-ing. I’ve got my WHOOP on one hand, and there’s an Apple Watch here. Dedicated fitness trackers have one overwhelming risk: Apple makes the watch, and Google has Fitbit. These big tech companies are competing with them. You’ve got a specialized thing that does one thing, versus this big thing—the Apple Watch—that’s always getting better at health. How do you compete with that? That’s interesting. You might say, “Hey, specialization wins out.” There are some cases where that’s worked, but how do you think Kodak feels about its specialized camera business when the iPhone comes around? Kodak might still be in business, but it’s not the Kodak of the ’80s anymore, right? So does specialization win, or does the general-use, cheaper option win? That’s another interesting thing to think about, which I didn’t even think about while I was rambling. I just rambled.

But first, a word from our sponsor, and our sponsor is Trata, T-R-A-T-A.com. If you've been listening to this podcast for the past year, 18 months, you know that Trata's been a great sponsor, and it's a product that I love, that I use frequently. Trata is two bystanders who hop onto an anonymized call, and they talk about stocks that they're long. They talk about the re... Or long, thinking about getting long, short, whatever it is. They talk about it, and they talk about why. They talk about the opportunity they see, the risk, what they worry about, what keeps them up at night, where they think the street is right, and where they think the street is wrong. They talk about all that, and then Trata takes the transcript of it, anonymizes it, and lets you read it. Whenever I'm looking at a company, I have my little Claude agent. I say, “Hey, Claude, today I'm looking at this company.” First thing it does: go to Trata, pull up any transcripts that mention it, and tell me what people are saying about the stock. I think it's just an awesome product. It's really unique. I think if you like this podcast, you're gonna like Trata too, so go to T-R-A-T-A.com to check 'em out. All right, let's jump into it. I said everything in the intro about what I’m going to talk about today. Let’s dive into it. I want to start off talking a little bit about mergers. First, I’ll start with a hypothetical, a little brain teaser. I don’t know if brain teaser is the right word, but that’s what I’m going to call it.

There’s a company—SOLS is the ticker. It was a spinoff about a year ago. Solstice Advanced Materials is the company. People really liked them when they spun off because every value investor is going to look at spinoffs. They had some exposure to semiconductors and all this sort of stuff. I haven’t done a ton of work on them, so I’m not going to claim to be an expert. I’m just giving you a broad overview off the cuff, from memory.

A couple of months ago, they announced a merger. It was a merger of equals, if I recall correctly, and the stock just got hammered. It was down 20% in a day or two. Investors hated the merger for 1,000 different reasons. This is a spinoff; they want a different capital allocation. A few months later, they called off the merger. Mergers have a contract, and both sides have to agree, but both sides said, “Hey, this isn’t working. The stocks are down,” and all that sort of stuff. So they called off the merger, and SOLS stock went up about 15% on that news.

Percentages can be funny, but if you do the math, the stock is down a little bit overall since the merger announcement. It hasn’t fully recovered, and that could be index-related or anything else. But I think it’s probably fair to say that after they announced the merger and the stock went down, people started looking at this company with a bit of a funny eye. It’s something I’ve been thinking about.

If SOLS announces a merger and investors hate it, and then they call it off, what do you think about the management team? If you’re looking at the company with fresh eyes, investors hated the merger and they called it off. In this case, they were able to call it off. If I remember correctly, there are no break fees. It was a merger of equals: both sides said, “Let’s merge,” and then both sides said, “Let’s not merge.”

So, if you’re looking at SOLS, what do you think about the management team after they do a merger investors hate and call it off? Is that a bullish sign? They took a shot, but they were willing to listen to feedback. Investors said, “We hate this,” and they said, “We hear you, and we’re going to do our best to get out of it.” Is that a bearish sign for them? I don’t think there’s any management team out there that’s going to announce a merger saying, “My shareholders are going to hate this,” right? Every management team thinks their shareholders are going to love it and that it’s a great deal. So, even though they got out of it, is the merger announcement a bearish sign because you can’t trust management anymore? Their capital allocation decisions are going to be extra suspect. They clearly wanted to merge. They got out of this one.

But the next one, you might not be able to get out of. There’s going to be a signed contract. You’re going to be forced to go through with it. I’ve just been thinking about that because, in general, if you said, “Hey, somebody did something and had the mental flexibility to do something: they spent months of work and diligence, all this sort of stuff, to get a signed contract. They think it’s great. They had the mental flexibility, when people were telling them this was a bad idea, to get out of it.” Generally, I’d say that’s great.

So it’s just been a little brainteaser. I don’t think there’s a right or wrong answer. We’re rambling, but I thought I’d start you off with that brainteaser because it’s something I’ve been thinking about. I think it is interesting. That’s a big example, right? That’s a merger of equals, but you could apply it to building a relationship with a management team.

You talk to them in quarter one and say, “Hey, guys, you talked in quarter one about taking pricing or not taking pricing, whatever it is. I’ve done a lot of industry research. I’ve talked to experts. I’ve talked to customers. I don’t think this is a good idea.” In quarter two, if they do something and come back to you and say, “Hey, we took your idea under advisement. We talked to customers, thought about it, implemented it, and stopped taking as much pricing in this situation,” you’d love to hear that. It’s something I’ve been thinking about, and you can apply it to all sorts of scenarios, big and small. Again, in Solstice’s case, I don’t think there’s a correct answer on whether it’s bullish or bearish, but I think it’s interesting to play around with.

1. A Merger Built Around One CEO

Speaking of mergers, the other merger I’ve been thinking a lot about is Starbucks. There was a rumor a week or two ago—I’m recording this October 12th—that Starbucks had looked at acquiring Chipotle. Yesterday, October 11th, Starbucks went on CNBC and said, “We’re not going to buy Chipotle.” So take that off the table. But it’s still really interesting to think about, because that is a merger with probably the least amount of synergies that 2 companies in the same industry could possibly have.

When you think about Starbucks and Chipotle, they’re both food companies, quote-unquote, but they have 2 completely different supply chains. The only thing they do is look for high-foot-traffic locations, but they’re kind of competitors in that sense. They’re not competitors in the sense that merging them creates a duopoly, because there are plenty of restaurant brands, retail brands, coffee shops, and others that want high-foot-traffic locations. Taking another competitor off the table doesn’t change the competitive dynamics for those locations at all. There are literally zero synergies between merging Starbucks and Chipotle.

But you know what there is? Brian Niccol, I believe, is the CEO of Starbucks. He was hired in 2024; he was announced in August 2024. He was the CEO of Chipotle, right? So he’s the Starbucks CEO now. You have a merger where there are no synergies. It’s a silly idea. If you gave somebody a fantasy draft and said, “Think of the top 1,000 mergers that could happen in the public-company space, the public restaurant space, whatever it is,” no one would think Starbucks and Chipotle belong together.

I know people are going to come at me with Yum! Brands and say, “Hey, you’ve got Taco Bell and KFC.” For a while, I believe Pizza Hut wasn’t in there anymore. I’d say, “Yes, that’s true, but at least Taco Bell and KFC are buying meat and cheese. There are a few supply-chain synergies.” Starbucks and Chipotle don’t even have that. A Taco Bell and a KFC can be under one roof; there are dual Taco Bell-KFC locations. You can’t even put a Starbucks and Chipotle under the same roof. They have completely different kitchens and completely different supply lines. Everything about the businesses is different.

No one would dream of putting these 2 together unless they knew the CEO. The CEO clearly wants to do this, at least in my opinion. I’m not in the boardroom, but it seems pretty logical that if he was the CEO 2 years ago, and they’re exploring this merger that makes no sense, it’s being driven by him. That’s interesting because, again, this merger doesn’t make sense unless you think Brian Niccol, the CEO of Starbucks, is so uniquely qualified that Chipotle and Starbucks under him are worth more than they would be under anyone else.

In that case, there actually are synergies, because if he’s so talented, so unique, such a visionary in the restaurant space or the fast-casual Mexican space with Chipotle, that it works under him, then there are synergies. That’s really interesting to think about. If you think about Steve Jobs when he came back to Apple, a lot of the mergers around Apple or Steve Jobs are Steve Jobs-centered. I’m blanking on what Apple buys, but Pixar comes to mind. When I read the Steve Jobs books, a lot of the mergers are around Pixar. There’s great creative talent at Pixar, and there are its own dynamics there, but a lot of it is about keeping Steve Jobs happy and involved.

When Disney buys Pixar, Steve Jobs is on the board. You’ve got this unique creative genius, and you’re kind of keeping him in line. With Starbucks buying Chipotle, that would be the only explanation. If you look at the stock prices and performance since Niccol left, you could see evidence either way. It’s kind of in the eye of the beholder.

Again, Niccol—I think it’s Niccol, actually—joins Starbucks in late 2024. Starbucks is at $78 per share the day before they announce he’s going to be CEO. It jumps to $95 per share when it’s announced he’s going to be CEO, and it’s trading at $93 per share today. You’ve got 2 years, and with dividends included, Starbucks stock is basically flat over that time frame.

Chipotle is at $55 per share before he leaves. It drops from $55 to $50 the day it’s announced he’s leaving, and as we’re talking, it’s at $30 per share today. You could look at that and say, “Hey, Chipotle was performing incredibly under his stewardship. Starbucks buys them, he brings the juice back, and there’s a lot of upside if this merger goes through and Starbucks can get that juice back.” The counter would be, “Hey, maybe he was riding trends. Starbucks is much more competitive now, and the restaurant environment is more competitive. Starbucks hasn’t exactly done great under his stewardship. Was this a one-time thing, a guy riding trends?”

I don’t know, but it’s really interesting to think about because that is the silliest merger I can possibly imagine. There’s probably one man driving it, and you could imagine a visionary scenario where you’d say, “Hey, Sol’s [?]—everyone hated it, and there was no reason for that merger to happen. Starbucks and Chipotle have no reason to make sense together, except for one man’s vision.” I think that’s really interesting.

2. Why Investors Feel Despondent

Let’s move on. The other thing—and I think this is what most people tune into Random Ramblings for—is my State of the Markets thoughts. I don’t do the posts anymore on State of the Markets. Maybe you tune in because I’m so handsome. Maybe you tune in for any number of reasons. But let’s talk about the indexes real quick.

Again, I’m talking on October 12th. Most of the people I talk to tend to fit into a certain group. I don’t love the label “value investor.” Maybe I’m getting old and crotchety, fighting over definitions. When somebody says, “I’m a value investor,” what they mean is, “I buy stocks at under 10 times price-to-earnings.” That’s a lot of what they mean.

I consider myself a value investor, but 10 years ago I would’ve said, “Yes, I buy stocks under 10 times price-to-earnings.” Now I don’t say that about myself. I say I’m a value investor in that I want to invest rationally and think logically. I want to buy things for less than they’re worth or buy things that are going to underperform. Everybody would say, “Hey, I want to buy things for less than they’re worth. I want to invest rationally.” But when I hear people say “value investors,” a lot of times what they mean is, “I buy things really quantitatively cheaply,” and that is not what I mean.

Most of my friends I invest with, I think, are a lot more rational and logical. They’re the friends I talk to a lot, and they fall more into the value-investor camp. Why do I say that? Anyway, they tend to fall into that camp, and they tend to be on the smaller side.

It’s interesting because the indexes are up double digits year to date. The Russell is up 10% or 11%. The S&P is up 13% or so as I record this. When I talk to friends, that is not what I’m hearing from them. A lot of my friends are borderline despondent, I would say.

Not despondent in the depths-of-COVID way, but they’re really frustrated with the market. Maybe part of that is because of the Russell 2000 in particular. If you’re a smaller investor, you’re probably not invested in the super-large stuff. The Russell 2000 is down about 8% since June 30, so we’re approaching correction territory.

I think underneath the hood of the indices—and I’m going to talk about that in a little bit—there’s just a bloodbath. The indices in general have been really supported by tech, surprise, surprise, and energy so far this year. I pulled up 10 different big, sector-based ETFs: consumer discretionary, consumer staples, industrials, and all that sort of stuff. When you look at them, all of them are plus or minus 5% on the year except for 2. Energy’s up about 45%, and tech’s up about 35%.

If you weren’t long tech or energy—or, within tech, if you weren’t long semis—you are massively underperforming the indices. I think there are 2 things driving this despondency. One, if you weren’t long those sectors, you’re underperforming. Two, the indexes have been in correction territory over the past 4 to 5 months.

It’s really interesting. If I didn’t know what the indexes were doing year to date and was just relaying my thoughts based on the friends I’m talking to, I would have guessed the indexes were down 15% on the year or something. They’re not. They’re up pretty solidly. I think that’s interesting.

Speaking of interesting things about the indexes, a popular thing I heard probably in late 2021—and I’ve heard it off and on for the past 10 years, with its popularity waxing and waning—is that the Russell is a broken index. Why would people say that? They say, “Hey, over the past 25 years, the world has become a world where scale matters.” Returns to scale improve. Think about software companies, internet companies, and all that sort of stuff. As you get bigger, you gain scale and operating leverage, your business gets better, and you get a little bit of a moat. Who’s going to start the next Google? You can’t. You don’t have the data science and all that sort of stuff.

The argument was that the Russell is a broken index because it does the reverse of what you want: it cuts its winners and waters its losers. If a stock goes up enough, it gets booted from the Russell, so it’s selling its winners and over-indexing in its losers. If the average company in the Russell has a $1 billion market cap, let’s say, and you stay at a billion, you’ll have a really good weighting in the Russell. But you’ve just floated at a billion, with 0.000% returns year after year. The Russell waters its losers because it over-indexes in them, and they stay there. It kicks out the winners and waters its losers.

I think that’s really interesting because we saw this happen in 2021, and we might see it happen again now. Yes, it’s true that the Russell kicks out its winners, but sometimes it dodges a bullet with the winners it kicks out. SMCI, Super Micro: I believe we saw this happen in 2024, when the stock went up about 10x to start the year. It was the biggest winner on the Russell, and the Russell kicked it out. Then it got hit with all sorts of accounting allegations. There was this wild resignation letter where the auditor was basically saying—the only thing they would confirm was that they used to be the auditor for SMCI. They wouldn’t sign off on anything in the company’s financials. The stock went up 10x and then fell about 80%. The Russell rode it up 10x, booted it, and missed the 80% drop.

We could be seeing a little bit of that with the Russell today. Earlier this year, a lot of the AI winners—Bloom Energy and a few others—were kicked out of the Russell around June, right when they were peaking, just before the situational-awareness blowup and all that sort of stuff. The Russell rode them up, and Bloom Energy alone, I believe, added 1.5% of return to the overall Russell this year. These stocks went parabolic, the Russell kicked them out, and they’re all down quite a bit since then. It’s funny: the same reason people used to say the Russell was broken has helped it so far this year. I don’t know what to take away from that, but I think it’s very interesting.

3. When Monopolies Invite Competition

Let me go to something close to my heart. Actually, speaking of indexes, I want to talk about one other thing: unexpected competition in the bear case. Speaking of people being despondent, this came to me because of FICO. I’m sure a lot of people listening to this are investors, and you know FICO, the credit score. FICO has come under a lot of heat from the government recently, and the government is really trying to break them. The stock’s down quite a bit this year, starting from a high P/E. The combination of a high P/E, competition, and maybe government-induced competition coming in isn’t a great combo. The stock’s down quite a bit, though I think it’s bounced off the lows.

I’ve seen what I call unexpected competition popping up a lot. FICO gets a regulatory crackdown because they push pricing too hard. I’ve seen it in other places, too. Disney is releasing the new Avengers film, I believe, the same weekend as Dune 3. Dune 3 had reserved all the IMAX theaters, so there’s no Avengers IMAX release. Disney is trying to roll out this thing they’re calling Infinity Vision. They’re going to the other studios, except for Warner Bros., because Warner Bros. is releasing Dune, and saying, “Hey, why don’t you guys start releasing movies in Infinity Vision? We’re going to spin up a competitor to IMAX.”

We’ve seen that happen in the movie industry before. If I remember correctly—I don’t have my notes here—all the movie chains rolled out their premium theater offerings a few years ago. You could go see something in IMAX, or you could see it in one of their premium offerings, with bigger screens, better seats, and all that sort of stuff.

I just think it’s interesting. What do Infinity Vision and IMAX have in common with FICO? They have a kind of monopoly. IMAX has a great brand. When you think, “Hey, I want to go see a premium movie,” you think IMAX. They have a great offering and a near-monopoly. FICO—the FICO score—is also a near-monopoly. IMAX has pushed its pricing power both in terms of what it charges consumers and in what it charges movie studios. Its actual customers are the movie studios, and it’s pushed pricing there in a variety of ways, including saying, “Disney, go take a hike on Avengers.”

Investors are always looking for the next monopoly, the next business with a huge moat. It’s interesting to think about how, whenever you talk to an investor who’s investing in a company, a lot of times—especially if it’s a really good company—they’ll tell you, “I wish this silly management team would just pull that pricing lever harder. I wish they would push pricing more.” That pricing lever is great, but if you push pricing too much, there’s always going to be a competitive response. Push it enough, and somebody’s going to figure out a way to bring supply or competition online in one way or another. With FICO, or with Valeant 10 years ago, push pricing too hard, and yes, maybe you have a monopoly, but the government will come and crack down on you. There’s always a bear case. There’s always competition. There’s always risk.

I was thinking about that because there was a New York Times article on microdramas. I believe microdramas are very popular in some emerging and foreign markets, and they’re getting more popular here. The New York Times portrayed them as pretty low-quality, soap-opera-type shows with stars that are getting very popular. You watch a clip at a time, and the clips are very short and very targeted. They say the shows are being filmed in English, but all the producers are Chinese, and they’re sending notes to the cast as it’s happening.

They’re saying, “Hey, you need to hit this storyline. We’ve seen that this increases traffic.” They’re very quantitative: “We need to see blood on the screen,” or, “We need you to say this line. We need this twist to happen.” I thought that was interesting. The reason I bring up microdramas is twofold.

A lot of people, myself included, made fun of Quibi when it launched six or seven years ago. Quibi stood for “quick bites.” It launched in 2020, so the timing was unfortunate: they wanted people to consume the quick bites on their phones while standing in line for coffee, and then COVID happened, so nobody was standing in line for coffee. It was backed by Jeff Katzenberg and Meg Whitman, if I remember correctly. Quibi launched after hundreds of millions in investment, got mocked, and shut down within a month or two. That’s basically what these little microdramas are.

I thought it was interesting that something widely mocked seven years ago might just have been a little bit ahead of its time. The other reason I thought about it was Netflix. The stock has done pretty poorly over the past year. As I write this, it’s trading at 70. Before they started bidding on Warner Bros. about a year ago, the stock was around 110, so it’s down quite a bit.

I think Netflix is still by far the dominant player in streaming and all that sort of stuff. But everywhere I look, I see competition. Netflix used to say, “Our competition isn’t HBO, or Disney. It’s YouTube. It’s sleep,” is what they said. And everywhere I look, I see competition looming for Netflix, whether it’s YouTube hours continuing to grow or these quick bites on the small end.

A lot of bulls would say Netflix has such a moat from its distribution, size, and scale when it comes to TV viewership that no one can catch them. They’re probably right about that, but it’s interesting that competition can come from unexpected places. Maybe the competition they should be thinking about isn’t Disney or HBO or whoever. Maybe it’s whether, 10 years from now, people will be watching as much TV and as many scripted dramas as they do now. Or will people be spending more time on quick bites that satisfy quickly, can be spun up really cheaply, and are specifically targeted at them? If they’re spending more time there, they’re spending less time on Netflix.

I’m not saying Netflix is a terminal zero or anything, but that kind of competition is how something can break. It’s easy for competition to come in any form, whether it’s a regulatory crackdown with FICO, or, with IMAX, you piss off somebody big and they spin off their own technology and try to get going, or Netflix faces these cheap, Chinese-backed microdramas.

The article is really good. One interesting thing it says is that an actor explained, “We have to stick to the scripts these guys are giving us, because often we’ll think something is silly, but then we’ll see the data, and it really causes a spike in viewership or signups.” So it’s very data-driven. But the actor also said, “Sometimes we’re dealing with Chinese people. They’ll send us a script and say, ‘You should yell at this person like, “How dare you, you lowborn peasant!”’ And we’ll be like, ‘Peasant isn’t really what you would call someone in America when you say that.’ So we’ll change that.” I thought that was really interesting. That peasant line stuck in my head.

4. Oura’s AI Valuation

All right. The last thing I want to talk about is Oura delaying its IPO this week. There were so many great jokes about Oura’s IPO. One of my favorites was, “Oura didn’t delay its IPO. It just has a low readiness score right now.” I’m a WHOOP person, so maybe I’m speaking as a customer of a competitor. For those who don’t know, your readiness score tells you when you wake up whether you got a good night’s sleep and your readiness to work out is really high, or you got a bad night’s sleep: “Screw that.”

I think Oura is interesting for a few reasons. It’s the ring that keeps track of your health. They tried to IPO at, I think, a $15 billion valuation, which is absolutely insane, and tried to raise $2.2 billion. If they had tried that 10 years ago, with the whole Oura business the same—subscription rings—they would have been raising nowhere close to $15 billion.

I think one reason they were valued so highly is that people looked at it and said, “This is a company with a wearable that has unique data. You could imagine a lot of ways that could come into play in an AI world.” I think they were at least trying to raise money on an AI play. It’s interesting to think about how a business whose customers love it, with unique data that’s on your body, can suddenly become much more valuable because of something tangential that happens. That could massively increase the value of the data, the customer base, everything the company has.

We’re very early in the AI revolution. What are other businesses that are going to see their value massively increase as AI takes hold? We’ve already seen a lot of them. The classic example would be crypto data centers. They had all this power, all this cooling, everything. They were built for Bitcoin to go to the moon. Bitcoin didn’t quite go to the moon, but it turned out those data centers were worth 10 times more running as AI centers.

To stick with AI, there have been a lot of articles recently about companies—I think there’s one that’s an EV charging company—that bought tons of power. It had enough power to charge something like 10,000 trucks per day. Well, they don’t charge 10,000 trucks, but they have that power allocated to them. So they say, “What if we charge 10,000 trucks’ worth of AI data centers instead?” I think we’ve seen a lot of that.

I was trying to rack my brain for the second-order effects that get more valuable as AI comes along and the world transforms. A lot of the first-order things have already happened. I don’t have great answers, but one that was really interesting to me, and that appeals to the value investor in me a little bit, is home builders.

I say home builders because there’s a bloodbath underneath the indices. A lot of home builders have sold off pretty heavily so far this year on rates concerns and every other type of concern you can imagine. Berkshire—not Warren Buffett anymore, but Berkshire—has been buying a lot of Lennar. Lennar started the year at 100 and is at 75 right now, so we can do the math: it’s down 25% for the year. It’s trading around book value, and Berkshire has been buying a bunch of it. I think home builders could be interesting.

You could imagine a world where AI firms start paying home builders, saying, “Install our AI equipment all over the new homes and communities you’re building, and we’ll pay you for that.” That way, the communities become more valuable. In that case, the returns wouldn’t be permanent. Because home builders are competitive, those returns would get competed away over time. Future builders buying communities or building lots would bid more, knowing there’s an AI return on the back end.

But all their current lots would be undervalued, because those lots were bought with the expectation of normal home-building returns. Then they find out AI firms will pay them 5% of a house’s value to install AI data trackers or whatever it is, so all their lots would be worth 5% more. That would be a one-time boost. I think that kind of windfall is interesting to think about. Is the windfall one-time, like with the home builder, because it gets competed away? Or with Oura, because they’ve already got all those customers, is it an ongoing benefit to the business?

5. Andrew Runs HYROX

Speaking of Oura, I did a HYROX race over the weekend and had a great time. My buddy Logan, who I think is also the number one fan of the Yet Another Value Podcast, came and did it with me. We did it in Boston and had an awesome time. Have I thought to myself, “Maybe I should become a fitness influencer instead of an investor?” Every now and then, when markets are rough or when I’m talking to despondent friends, maybe.

But I’m not. I love investing, so I’m not going to. But maybe I am. I don’t know. Anyway, I say that because I had so much fun, and if you’re into HYROX, you should just message me and we can talk about HYROX and stuff. But I don’t even know why I said it. I just said it because I wanted people to message me if they’re into HYROX and we can talk about HYROX.

It is something I’m going to keep doing, and I really enjoyed the training. I really enjoyed all of that. Probably going to do Miami HYROX in late March, so if you’re in the Miami area, you want to train, you want to talk, let me know. But anyway, I have so much to talk about, but I’ve had fun rambling.

I think it’s been about 30 minutes. Oh my gosh, I’ve got 6 other different topics I didn’t get to. Who knows when I’ll be able to get to those? But I’ve had a great time rambling. Hope you enjoyed it. We’ll talk to you soon, and we’ll go from there.

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 advisor.

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