Vagabond Investments

$HIMS I’ve seen discussions about Hims & Hers becoming this AI Health platform, but I struggle to make that link. I believe an AI Health platform or doctor would only be as good as the data it receives. If that’s the case, wouldn’t Apple, Oura, or Whoop be better positioned because they own the sensor on the body and the years of readings behind it? IMO $HIMS is a very good distributor of drugs wearing a platform costume. And to be clear, that business has a real tailwind right now, because the peptide surge is real and Hims is the cleanest listed storefront for it, the place a customer who would never buy from a gray market website can get GLP-1s and everything trailing behind them. Distribution into a booming drug category is a fine way to make money for a while. But distribution is not a moat when the molecule belongs to someone else. The compounding window can close, the suppliers can take the margin, and the customer can leave the day a cheaper storefront opens.

$PDD Recently placed an order on Temu to better understand the service as a shareholder. It went as expected. Total order was about $25 for six items. Two items were total crap and basically throw outs, while the rest were good enough quality to keep. The shirts I ordered were total knockoffs, as I kind of expected when I placed the order. I also got some golf accessories, including a putter cover, golf towel, and putter grip. So far all three seem to be good enough to keep. Lastly I got a jump rope. Pretty hard to mess up. Works great so far, no complaints. Overall this is what I expected when I placed the order. On commodity stuff, where brand and quality rarely differ, Temu will always win on price. When quality matters, you are essentially playing the lottery. Nobody opens Temu expecting quality. They open it expecting cheap. And while the business of cheap goods is not a sexy business, it is a big one. According to Vertical IQ, dollar stores generate nearly $100 billion annually in the US.

$UBER This is the part of the robotaxi debate that actually matters, and it is the part almost nobody prices. A driverless car earns nothing while it sits. Utilization is the return, demand decides utilization, and Uber owns the demand. That is why the fleets end up plugging into Uber, and why the toll collector with no cars beats the company carrying billions in depreciating hardware. The endgame was never Uber versus the robotaxis. It is Uber collecting a toll on every single one of them.

#MacroMonday: China Has a Currency Problem China's economy is increasingly being driven by two very different forces. On one hand, its export machine continues to perform exceptionally well. China's trade surplus reached $938 billion through the first nine months of 2026, putting it on pace to surpass last year's record. This has generated enormous foreign currency receipts, creating a source of demand for yuan as exporters convert their dollar earnings into domestic currency. On the other hand, domestic demand remains weak. The property downturn continues to weigh on household confidence, consumption remains subdued, and China's manufacturing PMI fell to 49.3 in October, returning to contraction. This divergence creates an interesting problem for Beijing. A stronger yuan should improve domestic purchasing power and, at the margin, support the rebalancing of the economy toward consumption. However, it would also make Chinese exports more expensive at a time when external demand remains one of the economy's most important growth drivers. A weaker yuan supports exporters but risks encouraging capital outflows and reinforcing the perception that Chinese assets are unattractive to foreign investors. Last week, the central bank announced it would raise the foreign exchange reserve requirement for financial institutions from 4% to 6%, effective November 15. The measure effectively absorbs dollar liquidity from the banking system, helping to slow the yuan's appreciation. $USDCNY has caught a bid over the past few days, moving from a low of 6.6480 to 6.6880. The PBOC can influence the pace of appreciation through its daily fixing, liquidity measures, and state-bank intervention. But managing the currency is not the same as reversing the underlying flows. I don't view last week's announcement as a reason to turn bearish on the yuan. The policy intervention may reduce the pace of appreciation, but it doesn't necessarily change the underlying supply and demand dynamics driving the currency. I'm inclined to remain long the yuan. China's external economic forces, particularly its enormous trade surplus, may ultimately prove too strong for the PBOC to fully neutralize. The question is not whether Beijing can slow the yuan's appreciation. It clearly can. The question is how much influence it can exert before the underlying economic forces begin to win out. For transparency, I don't currently have a position in the yuan. This is my macro view, not financial advice. Do your own research.

“Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.” - Peter Lynch

$FNMA $FMCC Fannie Mae and Freddie Mac represent an unusual investment opportunity: two highly profitable, systemically important financial institutions trading as publicly listed companies while remaining under government conservatorship. These institutions are indispensable to the U.S. housing finance system. They purchase mortgages from lenders, guarantee mortgage-backed securities, and provide liquidity to the broader mortgage market. Their scale, infrastructure, relationships with mortgage originators, and entrenched market positions create enormous competitive advantages. More importantly, they generate substantial earnings. The question isn't whether these businesses can make money. It's how much capital they will be required to retain, how Treasury's existing claims will ultimately be treated, and how much of the resulting equity value will accrue to existing shareholders. Why now? I believe the current environment offers an attractive window to build a position. Expectations surrounding privatization have cooled, share prices have retreated, and the underlying businesses continue to generate substantial earnings. Fannie Mae reported $4.2B in net income in Q3 2026, bringing its net worth to $119.6B. Its guaranty book of business stood at approximately $4.1T. Freddie Mac generated $3.2B in net income over the same period. These are not distressed businesses waiting for a turnaround. They are profitable institutions with enormous scale. I believe we're entering a window through the end of 2028 in which the probability of a resolution increases meaningfully. Bill Ackman has recently highlighted the opportunity, and I agree that resolving the conservatorship is an important item on the administration's remaining agenda. That doesn't mean Fannie and Freddie are getting released tomorrow. Bessent has pointed toward 2027 or 2028, with a clear priority of avoiding wider mortgage spreads. The biggest obstacle is Treasury's senior preferred stock, which has a liquidation preference approaching $388B and continues to grow as the companies retain earnings. That claim, along with the eventual treatment of Treasury's warrants and the companies' regulatory capital requirements, will determine how much value remains for existing common shareholders. With that in mind, here's some back-of-the-envelope math on the potential risk/reward. These are my assumptions, not price targets from analysts. Probabilities are subjective, and targets are 12–24 months out. 1. Full release and recapitalization 12% probability | FNMA: $30 | FMCC: $40 Preferred stock is converted or written down, allowing the companies to recapitalize and move toward release. This is closest to the Ackman scenario, which assigns approximately $500B in combined value, with 80% accruing to taxpayers. 2. Negotiated partial exit 28% probability | FNMA: $12 | FMCC: $15 A negotiated restructuring, potentially involving an IPO tranche, partial conversion of preferred stock, and settlement of Treasury's warrants. For context, Mizuho's recent targets were $10 for FNMA and $9 for FMCC. 3. Continued conservatorship 40% probability | FNMA: $3 | FMCC: $4 No meaningful resolution. The companies continue retaining capital, Treasury's senior preferred claim grows, and common shareholders remain structurally subordinated. Mizuho has flagged the possibility of no earnings accruing to common shareholders through 2033 under this scenario. 4. Adverse outcome 20% probability | FNMA: $1 | FMCC: $1.50 A change in political priorities results in continued conservatorship, potentially accompanied by changes to the companies' mandates or capital structures that significantly impair existing common shareholders. Using these probabilities and price targets, the probability-weighted values are approximately: FNMA: $8.36 FMCC: $10.90 My probability-weighted valuations are meaningfully above their current share prices. These estimates are based on what I consider conservative assumptions, yet they still leave room for a much larger outcome. A favorable resolution could produce a 10x return or more. I don't think this warrants a large position. I'm comfortable allocating 1–2% of the portfolio because even a severely adverse outcome would have a limited impact on overall portfolio performance and the potential payoff is asymmetric. A complete loss on a 1–2% position would be a manageable portfolio drag, while a 10x outcome could contribute 10–20 percentage points to portfolio returns. This is not a core holding. It's a political option with a potential 2027–2028 catalyst window. I'm willing to own that optionality at the current valuation. This is not financial advice. Do your own research.

$ABNB Printed a phenomenal Q3 2026 earnings this past week. Revenue: $4.9B, +19% YoY Gross Booking Value: $27.7B, +21% Nights and Seats Booked: 155M, +16% Adjusted EBITDA: $2.5B, +22% Trailing twelve-month free cash flow: $4.9B Revenue growth accelerated to its fastest pace in more than three years. Nights booked accelerated across every major region, while first-time bookers grew 13%. The reason I love this business is that it requires zero incremental capital to grow. It has built a global travel marketplace connecting millions of hosts with travelers around the world without having to own any physical assets. For years, the bear thesis has centered on slowing growth, increasing regulation, and competition from traditional online travel agencies. These are legitimate risks, but I believe the market may be underestimating Airbnb's ability to expand beyond its core vacation rental business. Airbnb is increasingly becoming a broader travel platform, expanding into boutique hotels, experiences, and services while investing in AI to improve discovery and personalization. These initiatives could increase the value of its existing marketplace, bring new customers onto the platform, and create additional opportunities to monetize its global audience. The opportunity is not simply to capture a larger share of vacation rentals. It's to capture a larger share of the travel experience itself. I believe that creates a compelling long-term growth runway for an already highly cash-generative business.

$UBER printed its fifth straight quarter of 20%+ Gross Bookings growth. Q3 2026: Gross Bookings $59.8B, up 20% in constant currency. Trips 4.1B, up 16%. Monthly active consumers up 14%. Mobility grew 17%, Delivery 23%, Freight 35%. Non-GAAP operating income reached $2.3B, up 38%, a record 3.9% of Gross Bookings. Non-GAAP EPS $0.88, up 35%. Unrestricted cash $10.1B. One of the metrics I pay particular attention to is return on tangible capital employed. Based on Uber's Q3 balance sheet, I estimate approximately $48.5B in tangible capital deployed against roughly $10B in trailing twelve-month free cash flow. That's a cash return on tangible capital of approximately 20%. I expect this figure to continue moving higher as Uber benefits from operating leverage, advertising growth, and increasing Uber One penetration. What's particularly interesting is that the market seems far more concerned with what Uber might become than what it already is. Despite the exceptional operating performance, the bear thesis that Waymo will eventually kill Uber continues to weigh on the shares. The stock was down approximately 18% on the year and hit a 52-week low the week before earnings, trading at roughly 13x trailing free cash flow. Meanwhile, Uber is moving into the commercial execution phase of its autonomous vehicle strategy, targeting 700 AVs on the road by year-end and 2,000 by the end of 2027. I think the market is underappreciating an important distinction: Uber doesn't necessarily need to own the autonomous vehicle technology to benefit from its adoption. Its marketplace, consumer relationships, distribution network, and ability to aggregate demand could prove just as valuable in an autonomous future. Waymo and Tesla are undoubtedly competitive threats, but neither is likely to have a monopoly on autonomous vehicle supply. I believe there will be multiple AV operators competing for demand, and Uber is well positioned to serve as the platform connecting that supply with consumers. Over the next several years, Uber will likely continue to trade on developments in autonomous driving. That uncertainty creates an interesting disconnect between the market's perception of Uber's future and the economics of the business today. I'd rather own an extraordinary cash-generating business at 13x free cash flow than pay a premium for certainty about what the next decade might look like.

“You only find out who is swimming naked when the tide goes out”- Warren Buffett

$FMCC $FNMA I think I’m gonna add a small position in both Freddie and Fannie. Still doing research, but think it’s a classic scenario of “heads I win a lot, tails I don’t lose much”

When intelligence gets cheap, the money moves to whatever intelligence cannot replicate. Cliff Sosin's framework is to own the complements to intelligence rather than the intelligence itself. Data, attention, emotional attachment, physical proximity, scale, and regulatory capture. Meta is the flagship. Intelligence deflates and the feed does not. Carvana is his biggest position, and cars and logistics and reconditioning are physical, so cheap intelligence makes the operation better rather than obsolete. Grindr is the one he floated without owning it, a pool of human connection that no model can fabricate. The same logic applies to other stocks. $GOOG $RDDT $SPOT $NFLX for attention and data. $VRSK $CSGP $SPGI for proprietary data. $UBER $ABNB $WMT $COST $AMZN for physical networks. $V $MA $CME for regulated tollbooths. The pattern is simple. The further a business sits from selling cognition itself, the more cheap intelligence is a tailwind to its margins instead of a threat to its product. What are other stocks that I might be missing?

#MacroMonday The Trade Is Inflation, Not Oil Policy rates barely moved last week, but the direction is becoming increasingly uniform across major central banks. They are either hiking or signaling that hikes are on the table in 2026, driven primarily by the same energy shock. Right now, the macro trade is centered around oil. Oil up means hike expectations up, real yields up, non yielding assets down. And the inverse if oil is down. My biggest concern is that inflation stays elevated even after the energy shock resolves. The oil spike can end without inflation returning to target. That is exactly what the Bank of Canada cited when it hiked rates. The concern is that higher energy prices bleed into the broader economy, feeding into wages, goods and services. If second-round inflation pressures emerge in the next few prints, monetary policy could remain restrictive into 2027. My view: remain short non-yielding assets, particularly gold and silver. Even if Brent falls below $100, elevated real yields can continue to pressure both metals. The thesis isn't that oil is high, so metals must fall. It's that inflation outlasts the oil spike, keeping real yields higher for longer. Much of this is already priced in. But at this point, I don't see a compelling reason for the underlying dynamic to reverse. Good news out of the Strait of Hormuz could certainly give gold and silver a short-term bid. I just wouldn't expect that rally to last if inflation remains sticky and real yields stay elevated. Silver over gold on the short side. Silver lacks the same central bank demand that supports gold and has greater sensitivity to shifts in the macro environment. For transparency, I don't currently have an outright short position in silver. This is my macro view, not financial advice. Do your own research.

$PDD is the most misunderstood retailer in the world. The market sees a Chinese app carrying tariff risk and a VIE structure. I see the purest scale economies shared machine since Walmart and Costco. Producers plug into demand aggregated from hundreds of millions of buyers, the layers of middlemen get cut out, and the savings go to the customer, which brings more buyers, which brings more producers. That flywheel is why Temu can land in a new country and matter within a year. Amazon wins on speed and convenience. PDD wins on price, and its producer relationships embed it into the fabric of the strongest manufacturing country on earth. The balance sheet does the downside work: at a market cap of about $113 billion, the enterprise value is only about $46 billion, because the company sits on a mountain of cash. Essentially you are paying roughly 3.5 times earnings for the operating business.

"Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble." - Warren Buffett

Reading Ari Emanuel's Roll the Calls this morning, and this one landed. "Rage to make them hear you. Rage to keep them honest. Rage or else you're no different from them. Rage or be complicit." Use it as fuel, not as noise.

“It is not whether you are right or wrong that is important, but how much money you make when you are right and how much you lose when you are wrong.” - George Soros

With the AI bubble roaring, I cannot help but think back to AOL in 2000. AOL was the gatekeeper to the internet. Anyone who wanted to be seen online needed to be on AOL. Startups raised billions of dollars from venture capital firms and public offerings, then funneled much of it straight into AOL ads. AOL knew it had a problem, because its revenue was coming from unprofitable startups. Once the music stopped, it would be in trouble. That pressure led to one of the most infamous mergers in history. Today, the same test applies to AI: follow the revenue back to its source, and ask how much of it is profitable customers, and how much is startups spending venture money to buy compute they cannot yet pay for themselves.

The flaw in Netflix's ad business comes down to two factors. First, the viewers who see ads are the ones who pay less, meaning the ad supported base is the segment with less disposable income. Second, and more important, TV has increasingly become background noise to what is on your phone. Subscriptions likely won't fall off, but now growth has to come from selling ads effectively. Unfortunately, that means competing with Meta, Google, and Amazon for ad dollars.

$META Mic drop moment

Why buy $PYPL when you can build a competitor for a fraction of the price