Telltales

by Top Mark Capital
  • 5.0 (6)
  • Investing
  • Updated Semiweekly

An investing podcast + substack for people who want to compound their wealth over the long run and don't mind sailing analogies telltales.substack.com

  1. 1d ago

    Weekend Update - W2641

    ▶ Explore this week’s Tape — live, sortable, drill-down → The Tape — W2641 Universe of 94 cashflow-memo names, snap dates 2026-10-02 → 2026-10-09. Composite is rank-sum percentile of FCF Yield + NTM Revenue Growth (higher = better balance). Banks and finance-book names shown separately. Telltales Yield — Top 10 Telltales Yield — Bottom 10 This Week’s Reporters Sector Medians Debt / FCF Watch (highest leverage on TTM FCF) Weekly Price Movement Top 5 (week-over-week price) Bottom 5 (week-over-week price) Banks (shown separately — FCF metric not meaningful) Finance-book — FCF not comparable Customer-float / captive-finance / reserve businesses (IBKR broker float, KMX CarMax Auto Finance, PYPL customer funds, CRCL stablecoin reserves). The memo’s operating-FCF method overstates their FCF, so they are held off the ranked leaderboard pending the P&L-waterfall rebuild. Data Gaps 91 of 92 ranked-eligible names ranked. 1 dropped for missing FCF yield or NTM revenue growth; 7 shown separately (banks + finance-book, FCF not comparable). Source: cashflow-memo master_2026-10-09.csv. NTM growth from analyst-estimates consensus. Composite is a percentile rank, not a recommendation. The Issue — This Week's Brief The Cashflow Memo Starbucks, Chipotle, and Two Permian Gas Deals A report that Starbucks explored a takeover of Chipotle, two Permian natural gas deals, and Uber’s agreement to buy ezCater The Telltales Weekend Update. Ava Cabot reports what the companies in the Cash Flow Memo disclosed this week and what is scheduled next. About 8 minutes. Download the memo at telltales.us. Hunt, Jason, and Mike are back Wednesday on episode E2642. Chapter markers * Time | Segment * 0:00 | Intro: what the episode covers * 0:40 | Theme: Starbucks and Chipotle * 2:30 | Deep dive: Permian gas (Energy Transfer, ONEOK) * 4:45 | Rapid-fire: Uber, Broadcom, UnitedHealth, the earnings calendar * 7:20 | Close * 7:40 | Disclaimer Full transcript Intro Ava: Welcome to the Telltales Weekend Update. I’m Ava Cabot. Ava: This week, from the companies in the Cash Flow Memo: a report that Starbucks has explored a takeover of Chipotle, Energy Transfer’s and ONEOK’s Permian gas deals, Uber’s agreement to buy ezCater, and next week’s earnings calendar. Ava: The show is produced entirely with AI tools, and the voice you’re hearing is AI-generated. The following conversation is intended for informational purposes only. You should always do your own work to determine if an investment is suitable for you. Theme — Starbucks and Chipotle Ava: Page 16 of the memo carries Starbucks and Chipotle. On Thursday, the Financial Times reported that Starbucks has worked with advisers in recent months on a takeover proposal for Chipotle[^ft-sbux-cmg-20261008]. Nation’s Restaurant News reported that the FT described the plans as early stage[^nrn-sbux-cmg-20261008]. Axios reported that it was not clear whether an offer had been made[^axios-cmg-20261008]. Ava: Chipotle shares closed up about 6% on Thursday, after trading as much as 8.5% higher[^px-nasdaq-20261008]. Axios reported that Chipotle’s market value was above $41 billion that afternoon[^axios-cmg-20261008]. Starbucks shares fell nearly 7% during the session and closed down less than half a percent[^px-nasdaq-20261008]. Ava: Starbucks chief executive Brian Niccol was chief executive of Chipotle before he left for Starbucks in 2024[^axios-cmg-20261008]. On October 6, before the FT report, Semafor wrote that it had reported Chipotle had tapped bankers to fend off a potential takeover, and that people close to the company said Chipotle had not received a takeover bid[^semafor-cmg-20261006]. Ava: A Starbucks spokesperson responded to the FT report on Thursday, per Nation’s Restaurant News. Starbucks spokesperson (quoted): As a matter of policy, we don’t comment on rumors and speculation. Our team is laser-focused on executing our Back to Starbucks strategy.[^nrn-sbux-cmg-20261008] Ava: The spokesperson added that Starbucks will give fiscal 2027 guidance with its fourth-quarter results[^nrn-sbux-cmg-20261008]. Per the company, Starbucks reports those results after the close on Thursday, October 29[^pr-sbux-q4date-20261008]. Deep dive — Permian gas Ava: On page 10 of the memo, Energy Transfer and ONEOK. Both disclosed Permian Basin natural gas deals on October 6. Ava: Energy Transfer announced an agreement to acquire Vaquero Midstream, in a transaction the company valued at about $2.6 billion[^pr-et-vaquero-20261006]. Per the release, the consideration is nearly $2 billion in cash and about 33 million newly issued Energy Transfer common units[^pr-et-vaquero-20261006]. Ava: Per the release, Vaquero operates about 300 miles of pipeline in the southern Delaware Basin of Texas, and three processing plants with about 675 million cubic feet a day of capacity[^pr-et-vaquero-20261006]. Ava: Vaquero owns enough acreage for two more plants, which the release says could raise capacity to about 1.2 billion cubic feet a day[^pr-et-vaquero-20261006]. Ava: Energy Transfer said Vaquero’s cash flows are supported by about 100,000 dedicated acres, and by customer contracts with an average remaining life of about 10 years[^pr-et-vaquero-20261006]. The company expects the deal to close in the fourth quarter, subject to regulatory approval[^pr-et-vaquero-20261006]. Ava: The same day, ONEOK said it completed its purchase of Brazos Midstream’s natural gas gathering and processing assets in the Midland Basin, also in the Permian, for about $4.4 billion in cash[^pr-oke-brazos-20261006]. Ava: Per ONEOK’s release, the deal more than doubles its Midland Basin processing capacity, to about 2.3 billion cubic feet a day, a figure that includes plants under construction[^pr-oke-brazos-20261006]. The assets carry about 600,000 dedicated acres under long-term fixed-fee contracts, with a weighted average remaining term of more than 12 years[^pr-oke-brazos-20261006]. Ava: ONEOK reports third-quarter results after the close on October 27, per the company[^pr-oke-q3date-20261005]. Rapid-fire Ava: Uber said on Tuesday that it has agreed to buy ezCater, a platform for catering and workplace meals, in an all-cash transaction valued at $2.3 billion[^pr-uber-ezcater-20261006]. Uber said the deal is expected to close in the coming months, subject to regulatory approvals[^pr-uber-ezcater-20261006]. Ava: Per Uber, ezCater generated more than $2.5 billion of gross bookings over the trailing 12 months, and its average order values are above $400[^pr-uber-ezcater-20261006]. Uber holds its third-quarter call on Wednesday, November 4, per the company[^pr-uber-q3date-20261005]. Ava: Broadcom. Bloomberg reported on October 7 that Broadcom has held early discussions to arrange financing to help OpenAI buy the custom AI chips the two companies are developing[^bbg-avgo-openai-20261007]. Per Bloomberg, the Wall Street Journal reported that Broadcom is arranging more than $50 billion of financing for the chips[^bbg-avgo-openai-20261007]. Bloomberg, citing one person, reported that no formal process has begun, and that early talks indicate the two companies could seek to raise around $30 billion of debt[^bbg-avgo-openai-20261007]. Ava: Bloomberg also reported that the $60 billion debt financing tied to Anthropic has launched[^bbg-avgo-openai-20261007]. Last week’s Weekend Update covered Bloomberg’s October 2 report on that package[^ep-w2640]. Ava: UnitedHealth. On October 5, Texas Attorney General Ken Paxton announced an investigation of UnitedHealth over alleged deceptive and unlawful practices that, per his office, have denied Texans access to medically necessary care[^tx-ag-unh-20261005]. His office said it has issued civil investigative demands to UnitedHealth to collect evidence of potential violations of the Texas Deceptive Trade Practices Act and other Texas laws[^tx-ag-unh-20261005]. Ava: The earnings calendar for next week. On Tuesday, October 13: Goldman Sachs[^earn-gs], JPMorgan[^earn-jpm] and UnitedHealth[^earn-unh]. On Wednesday, October 14: ASML[^earn-asml], Morgan Stanley[^earn-ms] and Fastenal[^earn-fast]. Ava: On Thursday, October 15: Interactive Brokers[^earn-ibkr] and Taiwan Semiconductor[^earn-tsm]. Per its 6-K, Taiwan Semiconductor’s September revenue was about NT$512 billion, up about 55% from a year earlier and down 0.6% from August[^6k-tsm-sep-20261008]. Ava: Netflix reports the following Tuesday, October 20[^earn-nflx]. Close Ava: That’s the Weekend Update. Hunt, Jason, and Mike are back Wednesday on episode 2642. Download this week’s Cash Flow Memo at telltales.us, and send us a note through the Substack. Disclaimer Ava: This podcast is intended for informational purposes only. You should always do your own work to determine if an investment is suitable for you. The views expressed on this podcast are the host alone and do not constitute an offer to sell or a recommendation to purchase, or a solicitation of an offer to buy any security, nor a recommendation for any investment product or service. While certain information contained herein has been obtained from sources believed to be reliable, neither the host nor any of their employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness, or completeness of this information. The host and all employers and their affiliated persons assume no liability for this information and no obligation to update the information or analysis contained herein in the future, and may or may not hold positions in the securities mentioned. Sources * Bloomberg. (2026, October 7). Broadcom holds early talks about financing for OpenAI chips. Bloomberg. https://www.bloomberg.com/news/articles/2026-10-07/broadcom-plans-50-billion-f

  2. 5d ago

    $1 a User vs. 15%

    Mike Nicoletti, Hunt Lawrence, and Jason Wallace walk this week’s Cash Flow Memo: oil stuck in triple digits, a 10-year Treasury headed toward 6%, SpaceX’s $40 billion Nvidia build, the agent threat to Apple’s App Store, and what a trillion-dollar valuation buys at Eli Lilly. The Cashflow Memo Key Takeaways * SpaceX is borrowing $40 billion with Nvidia credit support for what is close to a turnkey rack build, and Mike puts SpaceX’s Nvidia spend at $180 to $280 billion next calendar year against a Street number near $400 billion for Nvidia’s fiscal 2027, so one customer could equal half of the prior year’s revenue. * Brent sits at $100 and WTI in the low $90s with Hunt calling the Iran standoff an indefinite stalemate, and the 12-month backwardation has narrowed from about $20 to $10 to $12 as the 2027 strip rises; natural gas is holding in the $3s despite Permian associated gas driving two-thirds of the supply increase. * Hunt expects the $1.55 trillion deficit shown in Exhibit A to land closer to $1.9 to $2 trillion and, with the 10-year Treasury at 5.5%, predicts 6% by the first half of December, a direct hit to mortgage rates and to Lennar, Home Depot, and Lowe’s. * Jason’s Apple bear case is that Meta’s Muse agent moves transactions off Apple hardware: a two-core cloud instance lists at 4 cents an hour and likely costs Meta about $1 per user per month, so $7 of transaction volume at Apple’s 15% fee covers it, which threatens App Store services growth while Apple pushes into low-margin home hardware with LG. * Lilly trades at a $1 trillion equity value on $23 billion of free cash flow (Exxon generates $50 billion, Apple $130 billion), which Jason defends on follow-on GLP-1 patents and out-of-cycle pipeline acquisitions; he expects Grail’s Galleri test to win a limited-cancer approval after a 7 to 2 advisory vote on risk-benefit and a split vote on effectiveness. Show Notes [00:33] Oil Exhibit C is unchanged. Brent is at $100 and WTI in the low $90s, and Hunt sees the Iran standoff as a stalemate with no end date. [01:42] Backwardation The 2027 oil price keeps rising, cutting the 12-month backwardation from about $20 to $10 to $12. The market is pricing the stalemate as lasting. [02:13] Gas Natural gas is holding in the $3s as new LNG trains come on, but high oil prices keep pushing associated gas out of the Permian. [02:55] Deficit Exhibit A needs a rework, with the deficit likely closer to $2 trillion. Hunt predicts a 6% 10-year Treasury by the first half of December and flags the hit to homebuilders and home improvement retailers. [05:42] SpaceX’s $40 Billion SpaceX is borrowing $40 billion with Nvidia credit support for a near-turnkey rack build. Mike sizes SpaceX’s Nvidia spend at $180 to $280 billion next calendar year. [08:02] Nvidia’s Pace Why SpaceX builds on Nvidia alone: a yearly generation leap that no one else matches, plus the cooling, power, and architecture that let Colossus run 100,000 coherent GPUs. [10:33] Apple Jason was an Apple bull for about a day. The home hardware push with LG is a low-margin bet in a crowded market, and the company needs a software leader. [12:32] Agents vs. the App Store Meta’s Muse gives every user a cloud server for roughly $1 a month. Transactions that run there never touch Apple hardware or Apple’s 15% fee. [17:11] Lilly at a Trillion Hunt lines up the 12 trillion-dollar tech companies against Exxon, Lilly, JP Morgan, and Walmart. Jason makes the case for Lilly’s follow-on GLP-1 patents and pipeline acquisitions. [20:33] Grail’s FDA Vote The advisory panel split on Galleri’s effectiveness and voted 7 to 2 that the benefit outweighs the risk. Jason expects approval for a limited set of cancers. [23:00] Hospital Price Letters The FTC sent warning letters to a couple dozen large hospital groups over price transparency rules that have gone unenforced for years. [23:57] After the Midterms What a Democratic House and Senate would mean for the administration’s healthcare agenda, and why food supply reform and price transparency look bipartisan. [26:44] Food Additives How the generally-recognized-as-safe system lets manufacturers self-certify new ingredients, and how a 1997 change made notifying the FDA voluntary. Download this week’s Cash Flow Memo at telltales.us and subscribe. More Apple and more on food additives next week. Cashtags $AAPL $AMD $AMZN $GOOGL $GRAL $HD $ILMN $INTC $JPM $LEN $LLY $LOW $META $MU $NVDA $TSLA $VRTX $WMT $XOM This post and the information herein are intended for informational purposes only. The views expressed herein are the author’s alone and do not constitute an offer to sell, or a recommendation to purchase, or a solicitation of an offer to buy, any security, nor a recommendation for any investment product or service. While certain information contained herein has been obtained from sources believed to be reliable, neither the author nor any of his employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness or completeness of this information. The author and all employers and their affiliated persons assume no liability for this information and no obligation to update the information or analysis contained herein in the future. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit telltales.substack.com

    $1 a User vs. 15%

  3. Oct 4

    Weekend Update - W2640

    ▶ Explore this week’s Tape — live, sortable, drill-down → The Tape — W2640 Universe of 94 cashflow-memo names, snap dates 2026-09-25 → 2026-10-02. Composite is rank-sum percentile of FCF Yield + NTM Revenue Growth (higher = better balance). Banks and finance-book names shown separately. Telltales Yield — Top 10 Telltales Yield — Bottom 10 This Week’s Reporters No universe names reporting in the coming 7 days. Sector Medians Debt / FCF Watch (highest leverage on TTM FCF) Weekly Price Movement Top 5 (week-over-week price) Bottom 5 (week-over-week price) Banks (shown separately — FCF metric not meaningful) Finance-book — FCF not comparable Customer-float / captive-finance / reserve businesses (IBKR broker float, KMX CarMax Auto Finance, PYPL customer funds, CRCL stablecoin reserves). The memo’s operating-FCF method overstates their FCF, so they are held off the ranked leaderboard pending the P&L-waterfall rebuild. Data Gaps 91 of 92 ranked-eligible names ranked. 1 dropped for missing FCF yield or NTM revenue growth; 7 shown separately (banks + finance-book, FCF not comparable). Source: cashflow-memo master_2026-10-02.csv. NTM growth from analyst-estimates consensus. Composite is a percentile rank, not a recommendation. The Issue — This Week's Brief Reports on Broadcom’s financing. The Cashflow Memo Micron’s Fourth Quarter and Broadcom’s Financing Commitments Micron’s fiscal fourth quarter, the financing commitments in Broadcom’s 10-Q, and NextEra’s Texas power project The Telltales Weekend Update. Ava Cabot reports what the companies in the Cash Flow Memo disclosed this week and what is scheduled next. About 9 minutes. Download the memo at telltales.us. Hunt, Jason, and Mike are back Wednesday on episode E2641. Chapter markers * Time | Segment * 0:00 | Intro: what the episode covers * 0:40 | Theme: AI infrastructure financing (Broadcom, NextEra) * 3:20 | Deep dive: Micron’s fiscal fourth quarter * 5:50 | Rapid-fire: Regeneron, UnitedHealth, Interactive Brokers, the earnings calendar * 8:00 | Close * 8:20 | Disclaimer Full transcript Intro Ava: Welcome to the Telltales Weekend Update. I’m Ava Cabot. Ava: This week, from the companies in the Cash Flow Memo: reports on Broadcom’s financing for Anthropic, NextEra’s Texas power project, Micron’s fiscal fourth quarter, and the Sanofi and Regeneron expansion. Ava: The show is produced entirely with AI tools, and the voice you’re hearing is AI-generated. The following conversation is intended for informational purposes only. You should always do your own work to determine if an investment is suitable for you. Theme: AI infrastructure financing Ava: Reuters reported on Thursday, citing Anthropic’s confidential IPO filing, that Broadcom agreed to lend Anthropic up to $42 billion in convertible notes[^reuters-avgo-anthropic-20261001]. Per Reuters, that is about a third of a $125 billion, five-year commitment by Anthropic to lease TPU computing capacity[^reuters-avgo-anthropic-20261001]. Ava: Broadcom’s 10-Q, filed September 10, describes a backstop and convertible notes, each tied to customer lease agreements[^10q-avgo-note10-20260910]. It does not name a customer. The backstop was given to a financial partner, on a customer’s five-year lease obligations. If the customer defaults on a lease, Broadcom owes the difference between 85% of the outstanding lease amounts and the value received from selling the AI racks[^10q-avgo-note10-20260910]. The 10-Q states the limit this way. Broadcom 10-Q (quoted): Our maximum potential liability under the Backstop upon the deployment of all AI racks, on an undiscounted basis, was approximately $29 billion.[^10q-avgo-note10-20260910] Ava: The 10-Q says no amounts have been paid under the backstop[^10q-avgo-note10-20260910]. The 10-Q also describes convertible notes. Under certain circumstances, and if needed, a customer may issue Broadcom up to $42 billion of them, to be used solely for the customer’s obligations under the lease agreements. As of August 2, none had been issued[^10q-avgo-note10-20260910]. Ava: On Friday, Bloomberg reported that Blackstone and a group of banks are assembling $60 billion of financing for AI chips[^bbg-avgo-syndicate-20261002]. Bloomberg reported that it includes a $42 billion senior secured tranche, that Broadcom will provide residual value support on that tranche, and that the deal has not been announced[^bbg-avgo-syndicate-20261002]. Ava: Reuters also reported this week, from the same Anthropic filing, that Anthropic expects to spend at least $518 billion on infrastructure over the next decade, across six partners, with about 80% of it non-cancelable or payable whether or not the capacity is used[^reuters-anthropic-518-20260929]. Ava: The Cash Flow Memo dated September 28 has Broadcom at 51 times free cash flow, on $34 billion of free cash flow[^memo-avgo-20260928]. Ava: Next, NextEra. On Wednesday, NextEra Energy, Lewis Energy Group and Related Digital said the U.S. Department of Commerce and the Republic of Korea selected Related Companies and NextEra Energy Resources, in partnership with Lewis Energy Group, to develop Project Star in Encinal, Texas[^pr-nee-projectstar-20260930]. Per the companies’ release, it is a $22 billion natural gas power campus with about 6.5 gigawatts of generation, built to support a 5-gigawatt data center campus on an adjacent site[^pr-nee-projectstar-20260930]. Ava: The release says the campus will be owned jointly by the Republic of Korea and the United States, and built and operated by the Related and NextEra Energy Resources joint venture[^pr-nee-projectstar-20260930]. Initial generation is expected as early as 2029, subject to permitting and approvals[^pr-nee-projectstar-20260930]. Deep dive: Micron Ava: Micron reported its fiscal fourth quarter on Wednesday. Per the 8-K, revenue was $54 billion, against $41 billion in the prior quarter and $11 billion a year earlier[^8k-mu-ex991-20260930]. Net income was about $38 billion[^8k-mu-ex991-20260930]. Ava: For the fiscal year, revenue was $133 billion, against $37 billion the year before[^8k-mu-ex991-20260930]. Adjusted free cash flow for the year was $62 billion, after $27 billion of capital expenditures, net of government incentives[^8k-mu-ex991-20260930]. Ava: Micron’s guidance for the current quarter is revenue of $61.5 billion, plus or minus $1.5 billion, at a gross margin of about 86%[^8k-mu-ex991-20260930]. Ava: In its prepared remarks for the earnings call, Micron said fiscal fourth-quarter DRAM revenue was about $40 billion, 73% of total revenue[^mu-remarks-20260930]. Ava: Micron said it has signed 26 strategic customer agreements, which it estimates at more than 35% of its revenue through 2030[^mu-remarks-20260930]. Three-quarters of that estimated revenue has a defined pricing framework, and the remaining quarter is priced periodically, based on market prices[^mu-remarks-20260930]. Ava: Micron put its remaining performance obligations at about $150 billion[^mu-remarks-20260930]. Customer cash deposits received in the quarter were about $12 billion[^mu-remarks-20260930]. Ava: For calendar 2027 and 2028, Micron expects industry DRAM bit shipments to grow in the low-20s percent range and NAND in the mid-20s, and expects the industry to remain supply constrained in both years[^mu-remarks-20260930]. Chief executive Sanjay Mehrotra, in the prepared remarks, on DRAM supply. Sanjay Mehrotra (quoted): Even with additional industry DRAM cleanroom space plans, with robust demand trends including new upside requests from customers, we do not have line of sight to when supply and demand will return to balance.[^mu-remarks-20260930] Ava: Micron said it plans to increase capital expenditures in fiscal 2027 versus its prior plans[^mu-remarks-20260930]. Ava: The Cash Flow Memo dated September 28 has Micron at 28 times free cash flow, on $43 billion of free cash flow, figures that predate this report[^memo-mu-20260928]. Rapid-fire Ava: Page 19 of the memo. Sanofi and Regeneron announced on Thursday an expansion of their antibody collaboration[^pr-regn-sanofi-20261001]. Per the release, Regeneron receives $1 billion upfront, with up to $7 billion more in milestone payments[^pr-regn-sanofi-20261001]. Ava: The companies will co-develop and co-commercialize four new long-acting antibodies, and share costs and any profits equally[^pr-regn-sanofi-20261001]. Regeneron also has an option to include Sanofi’s lunsekimig, exercisable when its phase 3 studies in chronic obstructive pulmonary disease are complete[^pr-regn-sanofi-20261001]. Ava: Also on page 19, UnitedHealth. Bloomberg reported on Thursday that UnitedHealth is dropping 2027 Medicare Advantage plans covering about 390,000 members[^bbg-unh-maplans-20261001]. UnitedHealth reports earnings on Tuesday, October 13[^earn-unh]. Ava: Interactive Brokers released its September metrics on Thursday. Per the release, client accounts were 5.6 million, 35% higher than a year earlier, and daily average revenue trades were 4.1 million, 6% higher[^pr-ibkr-metrics-20261001]. Interactive Brokers reports earnings on Thursday, October 15[^earn-ibkr]. Ava: On page 13 of the memo, the banks. The SEC on Friday censured two JPMorgan units in a settled order[^sec-jpm-order-20261002]. The order finds that they permitted a person subject to a statutory disqualification to be involved in security-based swap transactions, and failed to supervise that person[^sec-jpm-order-20261002]. The sanctions are a censure and a cease-and-desist order[^sec-jpm-order-20261002]. CNBC, citing The Wall Street Journal, reported that Goldman Sachs’s board has discussed president John Waldron succeeding David Solomon as chief executive as early as next year[^cnbc-gs-succession-20260929]. CNBC also reported that a Goldman spokesman said there is no definitive timeline for succession[^cnbc-gs-succession-20260929]. Ava: The earnings calendar. Goldman Sachs[

  4. Sep 30

    Three Times GDP

    Hunt, Mike, and Jason walk the Cash Flow Memo as Hormuz flows recover, the fiscal year closes near a $2 trillion deficit, and the 10-year pushes toward 6%. Then Hunt’s case that the 12 trillion-dollar tech companies compound at three times nominal GDP, what $70 billion run rates at OpenAI and Anthropic say about agents, and whether AI makes drug development cheaper for everyone or just for Lilly. The Cashflow Memo Key Takeaways * Hormuz flows have recovered to roughly 15M barrels a day (vs ~20M before February) via shuttle tankers and the Saudi and Abu Dhabi bypass pipelines, but the 2027 strip trading up to $77 against $91 spot says the market prices the disruption as durable. * Hunt expects the fiscal-year deficit closing today near $2T against the $1.55T in Exhibit A, driven by spending (defense above $950B, all other not falling), with the 10-year at ~5.30% possibly reaching 6% by December and 7.5% mortgages the main casualty. * Hunt’s working thesis on the 12 tech companies above $1T is revenue growth of ~3x nominal GDP (~15%), enough to double in five years; Mike and Jason accept the direction but expect one or two laggards and structurally thinner AI software margins because every user consumes tokens. * Leaked figures put OpenAI and Anthropic each near a $70B revenue run rate from near zero ~18 months ago, and consumer agents (Meta’s Muse, OpenAI’s Dots, SpaceX’s Grokbot) now follow the Claude Code / Codex business inflection. * Lilly, the largest non-tech name in the memo at ~50x free cash flow, gains from AI-accelerated R&D, but Mike argues equal access across pharma likely competes those gains away to consumers, leaving scale distribution and proprietary data (Lilly’s GLP-1 base) as the moat. Show Notes [00:00] Intro [00:27] Oil: shuttle tankers through Hormuz Flows are back to roughly 15M barrels a day from 20M before February, via shuttle tankers and Gulf bypass pipelines. US inventories are drawing about 1M barrels a day. [03:07] Backwardation narrows Spot at $91 against a 2027 strip of $77. The back end trading up says buyers see the disruption as intractable. [03:47] Gas Permian associated gas keeps a lid on prices. [04:06] Deficit and the 10-year Exhibit A shows $1.55T; Hunt expects closer to $2T, and the problem is spending. The 10-year near 5.30% could reach 6% by December, with mortgages already at 7.5%. [09:34] An industrial revolution parallel Sour consumer sentiment in a strong economy has happened before. [10:16] Three times GDP Hunt’s work on the 12 companies above $1T: 15% growth, three times ~5% nominal GDP, doubles in five years. Mike and Jason expect lumpy growth, a laggard or two, and thinner AI software margins. [16:33] $70B run rates Leaked figures put OpenAI and Anthropic each near a $70B revenue run rate, from near zero 18 months ago. [17:13] The consumer agent race Claude Code and Codex were the business inflection; Muse, Dots, and Grokbot are the consumer one. Why the winners may not be invented yet. [21:20] A PhD hour for a fraction of a penny A benchmark task worth an hour of PhD work cost 30-40 cents in 2025 and costs a fraction of a penny today. Could AI step GDP growth up again? [23:58] Lilly at 50x free cash flow The largest non-tech name in the memo, ahead of Walmart, JPMorgan, and Exxon. Does AI-driven R&D accrue to Lilly or get competed away across pharma? [29:13] Moderna, BioNTech, and drug pricing AI for cancer medicines and FDA filings, why biology is harder to simulate than physics, and how much of US drug spend most-favored-nation pricing covers. Download this week’s Cash Flow Memo at telltales.us and subscribe. More healthcare next week. Cashtags $AAPL $AMD $AMZN $BNTX $GOOGL $JPM $LLY $META $MRNA $MSFT $MU $NVDA $TSLA $XOM This post and the information herein are intended for informational purposes only. The views expressed herein are the author’s alone and do not constitute an offer to sell, or a recommendation to purchase, or a solicitation of an offer to buy, any security, nor a recommendation for any investment product or service. While certain information contained herein has been obtained from sources believed to be reliable, neither the author nor any of his employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness or completeness of this information. The author and all employers and their affiliated persons assume no liability for this information and no obligation to update the information or analysis contained herein in the future. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit telltales.substack.com

    Three Times GDP

  5. Sep 27

    Weekend Update - W2639

    ▶ Explore this week’s Tape — live, sortable, drill-down → Berkshire Gave Up the Quiet Exit Berkshire’s real commitment to Lennar this month was the paperwork, more than the two hundred and twelve million dollars. On Thursday, September seventeenth, Berkshire crossed ten percent ownership of Lennar¹. Past that line the rules of owning a stock change. Every share it buys or sells now goes public within two business days, and any profit on a purchase and sale inside six months gets handed back to Lennar². That is a strange thing for Berkshire to walk into on purpose. This is a company that asked the SEC to keep its Chubb stake off the public record for two full quarters while it was still buying, and only showed its hand in amended filings in May of twenty-twenty-four³. Berkshire likes to build in the dark. It built most of Lennar in the dark too. Until that Thursday the only public record was the quarterly 13F, which lands a month and a half after each quarter closes. It shows about seven million Class A shares in mid-twenty-twenty-five, left alone for two quarters, then ten million by March and thirteen million by June⁴. By the morning Berkshire crossed the line, the Form 3 put the count at twenty-one million⁵. Eight million shares went on the books over a summer when nobody outside Omaha could see them. Then Lennar reported, on Wednesday the sixteenth: the miss, the guide cut⁶. Berkshire bought the next three sessions, crossed ten percent on the first of them, and filed Monday night⁷. The stock popped Tuesday on the disclosure⁸. The audio stopped there. The filings kept going. Wednesday through Friday, Berkshire bought again, about another hundred and thirty-six million dollars per a second Form 4 filed Friday⁹, and it paid about four dollars a share more than on the first batch. The first batch’s own disclosure had moved the price. Berkshire paid up for its own signal. A buyer who cares mainly about price stops at nine point nine percent, where the buying stays private. A buyer who crosses the line and keeps going has decided that size matters more than the last four dollars. The part that deserves the most attention runs the other way. Above ten percent, selling is public too. Every share Berkshire trims will print within two business days, and a holder that has just taught the market to refresh EDGAR for its name cannot leave quietly. Add the six-month short-swing rule, and nothing Berkshire bought this week can be sold at a profit before late March without the gain going to Lennar¹⁰. Berkshire gave up the quiet exit. That is a duration commitment written into securities law, which binds harder than any shareholder letter. It is also a Lennar bet, not a housing basket. The same June 13F that shows thirteen million Lennar shares shows a few thousand shares of D.R. Horton, the country’s largest builder by homes closed¹¹. Berkshire picked one balance sheet to wait out the housing cycle with. The Cash Flow Memo’s Lennar page was drafted in July, off the last filed quarter, and Berkshire’s second batch was bought against a worse one. The cashflow read is in Marcus’s column below. Short version: the screen that builds our leaderboard would never have surfaced this trade. What changes the read. Three filings, in order. The next Form 4: another week of buying says Berkshire has not reached its size; silence says it has. Lennar’s 10-Q, due in October, re-anchors the free cash flow math the memo is still carrying from before the miss. And Berkshire’s third-quarter 13F, due mid-November, shows whether that conviction stops at Lennar or spreads to builders it can still buy in private. The thesis breaks on a single letter. A transaction code of S on a Berkshire Form 4 for Lennar, a sale made in public before new orders turn, would say the duration call was a trade. Wall Street’s consensus on Lennar: five Underperform-or-Underweight ratings and three Holds in the week and a half around the print, not a Buy among them, with the last month’s price targets averaging about seventy-one dollars¹². Three of those bearish calls were reiterated on the Friday Berkshire bought its biggest single block of the month¹³. The Street published an opinion. Berkshire filed one with the SEC. The Tape — W2639 Universe of 94 cashflow-memo names, snap dates 2026-09-18 → 2026-09-25. Composite is rank-sum percentile of FCF Yield + NTM Revenue Growth (higher = better balance). Banks and finance-book names shown separately. Telltales Yield — Top 10 From the Cashflow Desk — Marcus Graham The composite is built to miss the week’s biggest trade. It scores FCF yield plus NTM revenue growth, and a homebuilder near the bottom of an order cycle carries consensus NTM growth of 1.7% — which is why Lennar appears in neither table above. Going into the print, the memo had Lennar at 16x trailing FCF on $1.8B, 10-Q confirmed; the Q3 release is not a filing, so we re-anchor when the 10-Q lands in October. The leaderboard rewards growth consensus can already see. Berkshire is paying for growth consensus has written down to zero. I read it as a rate call, and the screen has no column for rates. The test is Lennar’s Q4 print in December: if orders are still falling high single digits with mortgage rates unchanged, the 16x anchor comes down and the screen was right to ignore it. Telltales Yield — Bottom 10 This Week’s Reporters Sector Medians Debt / FCF Watch (highest leverage on TTM FCF) Weekly Price Movement Top 5 (week-over-week price) Bottom 5 (week-over-week price) Banks (shown separately — FCF metric not meaningful) Finance-book — FCF not comparable Customer-float / captive-finance / reserve businesses (IBKR broker float, KMX CarMax Auto Finance, PYPL customer funds, CRCL stablecoin reserves). The memo’s operating-FCF method overstates their FCF, so they are held off the ranked leaderboard pending the P&L-waterfall rebuild. Data Gaps 91 of 92 ranked-eligible names ranked. 1 dropped for missing FCF yield or NTM revenue growth; 7 shown separately (banks + finance-book, FCF not comparable). Source: cashflow-memo master_2026-09-25.csv. NTM growth from analyst-estimates consensus. Composite is a percentile rank, not a recommendation. The Issue — This Week's Brief The Cashflow Memo Nobody Paid for the Quarter Costco beat and nobody cared, Lennar missed and Berkshire bought ten percent The Telltales Weekend Update. Ava Cabot and analyst Marcus Graham walk through what happened this week — and what’s coming next — across the 99 companies in the Cash Flow Memo. About 14 minutes. No filler. Download the memo at telltales.us. Hunt, Jason, and Mike are back Wednesday on episode E2640. Chapter markers * Time | Segment * 0:00 | Cold open — nobody paid for the quarter * 0:45 | Theme — pharma buys what it doesn’t own (Merck, Lilly) * 4:45 | Deep dive — Lennar, and the $212 million disagreement * 8:45 | Rapid-fire — Costco, Generac, Micron, Nike * 11:45 | Close — Consensus Watch and the forward week * 12:45 | Disclaimer Full transcript Cold open Ava: Nobody paid for the quarter this week. They paid for the one after next. Ava: Costco beat on both lines and the stock went nowhere[^news-cost-flat-20260925]. Lennar missed its quarter and cut its full-year guide[^news-len-guidance-20260924] — and Berkshire bought $212 million of it anyway[^news-len-berkshire-20260924]. Eli Lilly wrote a $2.8 billion check for a clinical-stage company[^news-lly-ataibeckley-20260925], a business with nothing on a pharmacy shelf. Every one of those is the same trade. The number in the release was not what anybody was pricing. Not this quarter — the one after next. Ava: Telltales Weekend Update. I’m Ava Cabot, with Marcus Graham at the cashflow desk. Theme — Pharma buys what it doesn’t own Ava: Start with the drug companies, because they explain the rest of the week. Merck had one of the stranger seven-day stretches you will ever see out of a company that size — page 15 of the memo, and it spent the week buying, winning, and killing. It agreed to buy EyeBio — $1.3 billion up front, up to $3 billion with milestones[^news-mrk-eyebio-20260924]. It won an FDA approval with Eisai for a kidney-cancer combination[^news-mrk-eisai-20260925]. It hit the primary endpoint in a pivotal trial for diabetic macular edema, per the company’s own release[^news-mrk-brunello-20260925]. And then it walked away from something: Merck and Daiichi Sankyo pulled their accelerated-approval application in small-cell lung cancer, saying the evidence wasn’t sufficient[^news-mrk-daiichi-20260925]. Ava: Three different verdicts on three different assets, inside five days. Marcus, the cashflow take. Marcus: Merck is the cheapest large-cap drug company the memo prices, and it spent the week buying something that doesn’t sell yet. The memo has Merck at 23x free cash flow[^memo-mrk-evfcf-20260831], on $18 billion of trailing free cash flow[^memo-mrk-fcf-20260831], against $44 billion of net debt[^memo-mrk-netdebt-20260831]. A multiple that low is the market saying it has already marked down the back half of the decade. So the EyeBio check and the Daiichi withdrawal are the same decision made twice — fund the pipeline you believe, stop funding the one you don’t. The withdrawal is the part I’d weight. A company pulling its own filing is repricing its pipeline before the agency does it for them. Ava: Pulling your own filing. That is not a press release anybody enjoys writing. Ava: Now Lilly. Different problem entirely. Lilly did four things in five days. It agreed to buy AtaiBeckley, clinical stage, for $2.8 billion[^news-lly-ataibeckley-20260925]. It signed a research and license agreement with China’s InnoCare worth up to $3.35 billion[^news-lly-innocare-20260925]. It took an FDA approval for Onswik, a once-weekly basal insulin for type 2 diabetes[^news-lly-onswik-20260924]. And it broke ground on a

  6. Sep 23

    The Radiologists Are Still Here

    Hunt, Mike, and Jason walk the Cash Flow Memo with WTI near $101, a $20 discount to next year’s strip, and the 10-year above 5%. Then the data against AI job doomers, and what it would cost Meta to serve its new Muse agent at scale. The Cashflow Memo Key Takeaways * Hunt holds oil flat on Exhibit C: Iranian supply has only slipped from 3.0 to 2.1 million bbl/day under embargo because domestic use absorbs it, and China’s real demand is off ~400K bbl/day (16.2 to 15.8M), not the 2-3M press figure, since the cuts were re-exported product. * WTI at ~$101 against a ~$77 2027 strip leaves $20+ of backwardation that Hunt expects to keep rolling forward as a Hormuz risk premium; low-debt producers can hedge less and sell more barrels at ~$90 while reinvestment decisions key off ~$72-73. * With the 10-year up ~10bp in a day to ~5.1% and 30-year mortgages ~7.15-7.2%, Hunt asks what it will take for Washington to treat the deficit as a problem and suspects it needs an ’07-’08-style capital-markets closure. * Mike and Jason answer AI job doomers with data: Medicare-enrolled radiologists and radiologic technologists have risen since the 2016-17 radiology is done call, programmer counts still sit above the pre-COVID trend, and construction hiring (led by electrical contractors) keeps climbing on data center builds. * Meta’s Muse, an OpenClaw-style always-on personal agent at ~640K users, would need roughly 265,000 Graviton CPUs to serve 100M users, about $50M/day ($1.5B/month) at AWS on-demand rates before inference; separately, Grail meets the FDA on Galleri today after its failed trial, and the Anthropic S-1 is expected any day. Show Notes [00:00] Intro [00:27] Oil: supply and China demand Iran still pumps ~2.1M barrels a day under embargo, and China’s real consumption is down ~400K barrels a day, not the millions in the headlines. [02:16] The $20 backwardation Why the gap between spot and the 2027 strip keeps rolling forward, and how low-debt producers can take advantage of it. [04:22] Deficit and the 10-year Rates jump again, mortgages top 7%, and Hunt asks what it will take for Washington to treat the deficit as a problem. [07:06] AI and jobs: the data Radiology was declared dead in 2017; radiologist and technologist counts are up since. Software jobs remain above the pre-COVID trend. [12:08] 10,000 agents, three days OpenAI’s swarm approach to century-old math problems as a picture of the productivity multiplier. [13:35] Construction keeps hiring Electrical contractors, site prep, and plumbing keep rising on data center builds. [15:57] Meta Muse and OpenClaw A short history of open source, and how an open-source personal agent became Meta’s consumer product. [20:12] Serving 100 million users Napkin math: ~265,000 Graviton CPUs and ~$50M a day at on-demand rates before inference. [25:21] Frontier labs vs. consumer agents Why Muse and Grokbot target a different market than OpenAI and Anthropic, and why Google is surprisingly late. [27:59] Agents in healthcare Clinical-trial adherence as the obvious use case, once HIPAA is solved. [28:58] Grail at the FDA Galleri’s FDA meeting after a failed trial, and why multi-cancer detection is coming regardless of who gets there first. [30:26] Anthropic: wet lab and S-1 AI-designed drugs in a San Francisco wet lab, and the S-1 everyone is waiting to read. Download this week’s Cash Flow Memo at telltales.us and subscribe for next week’s episode, including the Anthropic S-1 if it drops. Cashtags $AMZN $GH $GOOGL $GRAL $META $MSFT This post and the information herein are intended for informational purposes only. The views expressed herein are the author’s alone and do not constitute an offer to sell, or a recommendation to purchase, or a solicitation of an offer to buy, any security, nor a recommendation for any investment product or service. While certain information contained herein has been obtained from sources believed to be reliable, neither the author nor any of his employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness or completeness of this information. The author and all employers and their affiliated persons assume no liability for this information and no obligation to update the information or analysis contained herein in the future. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit telltales.substack.com

    The Radiologists Are Still Here

  7. Sep 20

    Weekend Update - W2638

    ▶ Explore this week’s Tape — live, sortable, drill-down → Read the Vesting Schedule Amazon signed two documents with Generac on Tuesday. Everybody covered the smaller one. The supply agreement is the small document: backup generators for Amazon data centers, initial deliveries expected to total two point four billion dollars across twenty-twenty-seven and twenty-twenty-eight. The warrant is the large one. Amazon took the right to buy about 1.7 million Generac shares at a fixed strike, roughly eighteen percent of it vesting the day it was signed. The rest vests in tranches, against — Generac’s words, in its own 8-K — aggregate gross payments, net of certain offsets, received by the Company and its global affiliates from or on behalf of Amazon and its affiliates for backup power generators for Amazon data centers, up to a total of $8 billion.¹ Eight billion. Nobody has committed to eight billion, and that is exactly why the number is worth something. A press release carries the figure a company is confident enough to print. A vesting ladder carries the figure two sets of lawyers negotiated to, because Amazon does not build itself a staircase it cannot climb and Generac does not hand over equity against volume it cannot picture shipping. The ceiling in the filing is the honest one. It runs to nearly two years of Generac’s entire trailing revenue², from a single customer, at a company that until Tuesday was understood as selling generators to homeowners in a storm. None of this is improvised. Amazon has run the structure at least twice before, and the tell is always the same clause. Air Transport Services Group, 2016: warrants for up to nineteen point nine percent of the company, the unvested portion vesting as ATSG delivers additional aircraft leased under the ATSA, or as the Company achieves specified revenue targets³. Plug Power, 2017: fifty-five million shares, vesting based on Amazon’s payment of up to $600 million to the Company in connection with Amazon’s purchase of goods and services from the Company⁴. In every version the supplier funds the customer’s equity out of the supplier’s own order book. Amazon does not write a check for the stake. It buys product, and the stake arrives. Note where the strike gets set. ATSG’s was nine seventy-three, the closing price a month before that deal was announced⁵. Generac’s sits below where the stock closed Friday. The customer prices its option before the market finds out what the customer is about to do. And it is an option, not a marriage. When Stonepeak took ATSG private in an all-cash deal at twenty-two fifty a share⁶, Amazon — which by then held about nineteen and a half percent, per FreightWaves — ended up with no stake at all in the business it had supplied for eight years⁷. A warrant on public equity cannot survive into a private company. It converts to cash, or it lapses. Which reframes what happened to Generac this week. The stock did not move because a generator company won an order. It moved because a generator company disclosed, in a filing, the maximum size of its new relationship, and the market read the ceiling as the forecast. Getting there is a manufacturing problem, not a demand problem. The cashflow read is in Marcus’s column below; short version, the tape priced the order book and skipped the factory. What changes the read. The test is the Q3 print, and it is the capital expenditure line, not the revenue line. Eight billion dollars of generators has to be built before any of it can be collected, and the Cash Flow Memo’s page on this name was drafted before Amazon walked in the door — the multiple sitting on it belongs to a storm-demand business, not a contracted-infrastructure supplier. Guide capital expenditure up hard, and fund it, and the ladder is live. Leave capital expenditure where it is and the ladder is decoration. The second thing to watch is quieter: every filing from here reports how many warrant shares vested, which is a quarterly readout on what Amazon actually paid. Generac has agreed to publish its largest customer’s purchase orders. Not many suppliers do. Wall Street’s consensus on Generac after the Amazon deal: the stock has further to go. Right direction, wrong document. Consensus is pricing the press release. Amazon priced the vesting schedule. The Tape — W2638 Universe of 94 cashflow-memo names, snap dates 2026-09-11 → 2026-09-18. Composite is rank-sum percentile of FCF Yield + NTM Revenue Growth (higher = better balance). Banks and finance-book names shown separately. Telltales Yield — Top 10 From the Cashflow Desk — Marcus Graham Generac got repriced on an order book, and nobody has priced what filling it costs. Capex ran $168.9M TTM — a company sized to sell generators into storms, not to stand up capacity for a hyperscaler. The warrant vests against Amazon payments running up to $8B, and consensus is reading that ceiling as a demand forecast; it is a negotiated ceiling, and it only pays Amazon if Generac builds. Debt/FCF at 2.7x says there is balance-sheet room for the first tranche. It does not say there is room for the ladder. The test on the Q3 print is the capital expenditure guide, not the revenue line. We re-anchor the multiple when the Q3 10-Q files. Telltales Yield — Bottom 10 This Week’s Reporters Sector Medians Debt / FCF Watch (highest leverage on TTM FCF) Weekly Price Movement Top 5 (week-over-week price) Bottom 5 (week-over-week price) Banks (shown separately — FCF metric not meaningful) Finance-book — FCF not comparable Customer-float / captive-finance / reserve businesses (IBKR broker float, KMX CarMax Auto Finance, PYPL customer funds, CRCL stablecoin reserves). The memo’s operating-FCF method overstates their FCF, so they are held off the ranked leaderboard pending the P&L-waterfall rebuild. Data Gaps 91 of 92 ranked-eligible names ranked. 1 dropped for missing FCF yield or NTM revenue growth; 7 shown separately (banks + finance-book, FCF not comparable). Source: cashflow-memo master_2026-09-18.csv. NTM growth from analyst-estimates consensus. Composite is a percentile rank, not a recommendation. The Issue — This Week's Brief The Cashflow Memo The AI Gold Rush Paid the Shovel Sellers and Billed the Diggers Amazon handed Generac a $2.4 billion order and took warrants on its stock. Oracle got a congressional subpoena. Same buildout, opposite ends of it. The Telltales Weekend Update. Ava Cabot and analyst Marcus Graham walk through what happened this week — and what’s coming next — across the 86 companies in the Cash Flow Memo. About 14 minutes. No filler. Download the memo at telltales.us. Hunt, Jason, and Mike are back Wednesday on episode E2639. Chapter markers * Time | Segment * 0:00 | Cold open * 0:45 | Theme — Who’s getting paid (Generac, Lennar) * 4:45 | Deep dive — Oracle * 8:45 | Rapid-fire (Merck, Lilly, Salesforce, Google, Tesla) * 11:45 | Close * 12:40 | Closing disclaimer Full transcript Cold open Ava: This week the AI gold rush paid the shovel-sellers and billed the diggers. Generac, a company that makes backup generators, signed a $2.4 billion supply deal with Amazon and watched its stock run more than 19%[^news-gnrc-amazon-supply-20260916][^news-gnrc-shares-20260917]. Oracle, which is actually building the thing, spent the week getting its founder subpoenaed by Congress and calling off the sale of $7.5 billion of his own stock[^news-orcl-subpoena-20260917][^news-orcl-ellison-20260913]. Same buildout. Very different end of it. Ava: Telltales Weekend Update. I’m Ava Cabot, with Marcus Graham at the cashflow desk. Theme — Who’s getting paid Ava: Generac spent 20 years selling generators to people whose power goes out in a storm. This week it found a customer whose power can never go out at all. Amazon signed a $2.4 billion long-term supply agreement for backup generators at its data centers, first deliveries expected in 2027 and 2028[^news-gnrc-amazon-supply-20260916]. And then Amazon did something more interesting than paying. It took warrants, the right to buy up to $340 million of Generac stock[^news-gnrc-amazon-warrant-20260916]. Shares ran more than 19%[^news-gnrc-shares-20260917]. Marcus, who got the better end of that bargain? Marcus: Amazon just bought a supplier’s upside with the supplier’s own order book. The Cash Flow Memo has Generac generating about $600 million of free cash flow a year[^memo-gnrc-fcf-20260831]. That $2.4 billion order is roughly four years of everything the company makes, landing in one contract[^news-gnrc-amazon-supply-20260916]. The warrant is Amazon telling you it knows exactly how big that order is against the company that has to fill it. What I’d watch is the 2027 delivery date, because between here and there Generac has to build capacity for an order that size, and nobody has shown us what that costs yet. Ava: And Generac’s own multiple? Marcus: 29x free cash flow in the memo[^memo-gnrc-evfcf-20260831], and that price was set before Amazon walked in the door. It is not a bargain for a generator company. What you’re being asked to underwrite now is whether a storm-demand business with lumpy revenue turns into a contracted-infrastructure supplier with a visible order book, because those two things do not trade at the same multiple. The 19% move was the market starting that argument[^news-gnrc-shares-20260917]. It did not settle it. Ava: Lennar told you two things about the American housing market this week, and they don’t agree with each other. Orders fell 9%, to just under 21,000 homes, short of its own guide[^news-len-orders-20260917]. Full-year deliveries cut to 80,000-81,000, down from 82,000-83,000[^news-len-guidance-20260917]. Margins actually got better, about 15.8% gross, with buyer incentives down to 12%[^news-len-margins-20260918]. And then, in the same week it was cutting guidance, Lennar bought 444 lots for $60 million, right next t

  8. Sep 16

    AI Is an Engineering Problem, Not an Extinction Event

    Hunt, Mike, and Jason walk the Cash Flow Memo with oil back near $100, the 10-year above 5%, and the AI labs talking about extinction. Plus notes from the All-In Summit and a Vertex update. The Cashflow Memo Key Takeaways * Hunt holds oil around $90 with the 12-month strip ~$20 lower despite WTI briefly topping $100; the real squeeze is diesel (~$200/bbl globally) from Ukrainian strikes on Russian refineries, Chinese product-export limits, and uninsurable Gulf product tankers. * Gas has settled at ~$3.50 for both 2026 and 2027 as higher oil prices drive Permian associated-gas supply while power-sector demand stays flat on coal-plant life extensions and subsidized solar. * With the 10-year above 5% and the Fed’s unanimous 25bp hike to 3.75-4%, Hunt still argues most investable assets belong in equities, about half in the leading dozen names, since the Mag 7 trades ~21x versus ~40x two years ago while growing sales at roughly 3x nominal GDP. * Jason and Mike frame AI risk as an engineering problem (human gating, cyber rather than physical threat) and read the labs’ public doom talk as fundraising PR and a push for regulatory capture against open-source models; Anthropic told a small group of shareholders it expects positive adjusted operating income (excluding stock-based compensation) for a second straight quarter, per the FT. * Jason sees the main threat to Vertex’s CF franchise receding after Sionna Therapeutics’ SION-719 missed its Phase 2a endpoint as a Trikafta add-on (Sionna is still advancing a dual combination), while non-opioid pain uptake improves and the FDA let Vertex add a blood-type-O second-generation T1D cell therapy as a new arm in the existing trial. Show Notes [00:27] Oil: the diesel squeeze Why the East-West pipeline shutdown and Hormuz headlines matter less for crude than for diesel, now ~$200/bbl worldwide, and why backwardation keeps the strip ~$20 under spot. [05:15] Gas settles at $3.50 Higher oil prices mean more Permian associated gas, while flat power demand keeps prices anchored for 2026 and 2027. [07:01] The 10-year above 5% A unanimous Fed hike, $2 trillion deficits, and hyperscaler debt push rates higher, yet the S&P trades 19x and the Mag 7 just 21x. [10:59] Data center capacity is worth more than book Mike argues existing capacity is undervalued as new builds get harder and demand keeps rising. [12:01] Engineering, not extinction Jason on why language models are software, where the real cyber risk sits, and why the labs’ doom talk looks like PR and a push to regulate open source out. [20:08] Tap water, bottled water NVIDIA’s Hugging Face acquisition, Jensen’s All-In analogy for cheap versus premium intelligence, and whether hosted Grok agents replace always-on Mac minis. [23:00] Healthcare: Vertex Sionna Therapeutics’ Phase 2a miss eases the competitive threat to Vertex’s cystic fibrosis franchise, non-opioid pain uptake improves, and the FDA approves a new T1D trial arm. [27:10] All-In notes SpaceX and xAI on hiring and turnover, AI-lab monthly revenue as a tracked signal, and Anthropic’s second straight quarter of positive adjusted operating income. [29:47] Data center politics Meta’s Louisiana case study, and why candidates are running against data centers heading into November. Download this week’s Cash Flow Memo at telltales.us and subscribe for next week’s episode on the data center jobs debate. Cashtags $AAPL $AMZN $GOOGL $META $MSFT $NVDA $VRTX This post and the information herein are intended for informational purposes only. The views expressed herein are the author’s alone and do not constitute an offer to sell, or a recommendation to purchase, or a solicitation of an offer to buy, any security, nor a recommendation for any investment product or service. While certain information contained herein has been obtained from sources believed to be reliable, neither the author nor any of his employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness or completeness of this information. The author and all employers and their affiliated persons assume no liability for this information and no obligation to update the information or analysis contained herein in the future. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit telltales.substack.com

    AI Is an Engineering Problem, Not an Extinction Event
See All (313)

Ratings & Reviews

5
out of 5
6 Ratings

About

An investing podcast + substack for people who want to compound their wealth over the long run and don't mind sailing analogies telltales.substack.com

Information

  • Creator
    by Top Mark Capital
  • Years Active
    2021 - 2026
  • Episodes
    313
  • Rating
    Clean
  • Copyright
    © Mike Nicoletti
  • Show Website
    Telltales

You Might Also Like