Apollo recently released a presentation on the extreme weight of AI in the S&P 500.

Here are 8 interesting highlights: 1) The weight of the Magnificent Seven* more than 30% of the S&P 500, about level with prior peaks in mid-2024 and early-2025.

Nvidia, the largest stock in the index, has a P/E of 51x.

*Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla.

Bill Ackman's Pershing Square released an investor update that covered commentary on Pershing's holdings, which include $GOOGL Alphabet, $AMZN Amazon, $CMG Chipotle, $NKE Nike, $UBER Uber, and more.

Here are 8 interesting highlights: 1) $UBER Uber

"We continue to believe the market underappreciates the durability of Uber’s moat, the magnitude of its earnings growth, and the strategic role it will play in shaping the future of mobility. We anticipate Uber will generate 30% or greater annual EPS growth".

We ran a screen for US and European companies that have been operationally unprofitable for the last five years but have become profitable over the last 12 months.

118 results.

Here are some of those results (full list at the end):

1/ $DUOL Duolingo

https://x.com/KoyfinCharts/status/1957864407083675820

2/ $PTON Peloton

The Magnificent Seven Cash Flows vs Share Price

1) $NVDA Nvidia 2) $MSFT Microsoft

Mauboussin & Callahan just shared a paper on drawdowns and recoveries.

"One of the hardest aspects of being a long-term investor is that
even the best investments, or investment portfolios, suffer large
drawdowns".

🧵 Our 8 favourite highlights: 1) Drawdowns are the norm, not the exception.

"The median stock’s recovery from its maximum drawdown is 90% of the prior peak price (par), which means it fails to return to its past high. About 54% of stocks never return to par after hitting bottom".

The CFA published a report earlier this year on one of the most valuable but poorly recognised corporate assets: intangibles.

The key issue? Accounting doesn’t reflect what drives value today.

🧵 8 interesting highlights: 1) Today's largest companies are built different.

"The ranks of the largest issuers today are dominated by technology, health care, & consumer products companies that are more driven by investments in intangible assets than by tangible assets".

In 1991, Seth Klarman wrote a book, Margin of Safety, that is rumoured to have printed only a few thousand copies.

No longer in print, but packed with superb insights, Klarman once said he
“endeavoured to make the book timeless".

🧵 Our 9 favourite lessons: 1. The 80/20 rule:

"The first 80 percent of the available information is gathered in the first 20 percent of the time spent. The value of in-depth fundamental analysis is subject to diminishing marginal returns".

In several of Peter Lynch's old books, he shared a charting technique later dubbed the "Peter Lynch Chart".

"A quick way to tell if a stock is overpriced is to compare the price line to the earnings line".

A quick guide to producing these charts in Koyfin 👇 1) These charts are sometimes called 'Fair Value' chart lines, where you plot a range of constant valuation multiples to visualise where the company trades in relation to those bands.

Example: Apple trades at 27x earnings with a 10Y mean of 21.3x earnings.

The Magnificent Seven Valuations vs 10Y Mean

1) $NVDA Nvidia 2) $MSFT Microsoft

Here are 8 companies down more than 20% so far in 2025:

1) $TSLA Tesla

Market cap: $760 billion
Drawdown YTD: 42%
Drawdown from Peak: 51% 2) $XYZ Block

Market cap: $38 billion
Drawdown YTD: 28%
Drawdown from Peak: 78%

Mauboussin & Callahan just shared a paper on the psychology of expected value.

"How often you are right is not all that matters. What is vital is how much money you make when you are right versus how much you lose when you are wrong".

🧵 Our 8 favourite highlights: 1/ Most investors misprice extreme outcomes - markets often overpay for "lottery" stocks (low probability, high payoff) and underprice extreme downside risks.

"Many outcomes investors call black swans are really gray swans—known unknowns".

Bill Ackman's Pershing Square released an investor update that covered commentary on markets and Pershing's holdings.

Here are 8 interesting slides:

1) The 10 largest companies in the S&P 500 index trade at 27x earnings, compared to 20x for the other 490 companies 2) The 10 largest companies in the S&P 500 accounted for nearly 40% of total market capitalization and nearly 60% of total index returns in 2024

Here are 8 companies trading close to their lowest valuation in a decade:

1) $AMZN Amazon

Market cap: $2.35 trillion
PE: 38.1x
PS: 3.4x
EV/EBIT: 31.8x 2) $PEP PepsiCo

Market cap: $200 billion
PE: 17.2x
PS: 2.2x
EV/EBIT: 15.7x

The Magnificent Seven Cash Flows vs Share Price

1) $NVDA Nvidia 2) $MSFT Microsoft

Here is a screen output for companies that are trading at historically low PE ratios and historically high gross and EBIT margins relative to their history.

These companies are profitable and have grown revenues and earnings over the last 5 years.

Notice $AMZN $NOW $LULU $MONC Here is how you would set up the screen in Koyfin, which yields 122 results across the US, Canadian, and European markets (you can include other continents or countries).

Utilising percentile ranks in screeners can help you find promising opportunities.

Here are 8 companies trading close to their lowest valuation in a decade:

1) $AMZN Amazon

Market cap: $1.9 trillion
PE: 35.1x
PS: 2.9x
EV/EBIT: 29.2x 2) $CRM Salesforce

Market cap: $272 billion
PE: 27.1x
PS: 6.9x
EV/EBIT: 20.8x

The paper titled "The Equity Compounders" was published by Morgan Stanley in 2016.

"These compounders have generated superior risk-adjusted returns across the economic cycle".

🧵 Our 6 favourite highlights: 1/ What is a compounder?

"High quality, franchise businesses, ideally with recurring revenues, dominant & durable intangible assets, pricing power and low capital intensity. We focus on franchise quality, durability, financial strength, industry position, & management quality".

In 2010, Seth Klarman described 20 lessons from the great financial crisis of 2008 that he felt “were either never learned or else were immediately forgotten by most market participants.”

🧵 A summary of those lessons: 1. Things that have never happened before occur with some regularity

2. Be wary of lax lending standards

3. Consideration of risk must never take a backseat to return

4. Risk is always relative to the price paid

5. Reality is always too complex to be accurately modelled

5 Big Ideas from Bill Miller 💡

1/ The asymmetry of past information and future value

"As I tell our analysts, 100 percent of the information you have about any business reflects the past, and 100 percent of the value of that business depends on the future". 2/ Value traps, and how to avoid them

"The problem is that in most value traps, the fundamental economics of the business has deteriorated. And the market is gradually marking down the valuation of those to reflect the fundamental economic deterioration".

8 companies with impressive dividend growth consistency:

1) $PEP PepsiCo

• Dividend Yield: 3.04%
• 30Y Dividend CAGR: 9.7%
• 30Y Avg Payout: 50%
• Current valuation: $241 billion 2) $WMT Walmart

• Dividend Yield: 1.10%
• 30Y Dividend CAGR: 12.6%
• 30Y Avg Payout: 32%
• Current valuation: $605 billion

These 10 companies have been share cannibals in the last decade, repurchasing between 20% to 65% of their share count:

1) $HD Home Depot

• Market cap: $353 billion
• 10Y Total Return: 436% (18% CAGR)
• 10Y Sharecount: -27.5% 2) $ORLY O'Reilly Automotive

• Market cap: $66 billion
• 10Y Total Return: 634% (22% CAGR)
• 10Y Sharecount: -44.1%