Yet Another Value Podcast

Starbucks and Chipotle might be the merger with the fewest synergies two companies in the same industry could possibly have: different supply chains, different kitchens, you can't even put them under one roof. The only synergy is one man. Brian Niccol ran Chipotle and now runs Starbucks, so the deal only makes sense if you think he is uniquely talented enough that both brands are worth more under him. I start with a brain teaser on SOLS (Solstice Advanced Materials): management announces a merger investors hate, the stock drops 20%, and then they call it off. Is that a management team willing to listen, or one whose capital allocation you can't trust anymore?From there, state of the markets: the indices are up double digits, yet most of my friends are borderline despondent. Everything outside tech and energy is roughly flat on the year and the Russell 2000 is down about 8% since June 30th. I also revisit the old "the Russell is a broken index because it kicks out its winners" argument, and why that same feature helped it dodge SMCI's collapse and this year's AI peak.Then unexpected competition. FICO pushed pricing and got a regulatory crackdown, IMAX locked up Dune 3 and Disney answered with Infinity Vision, and micro dramas (Quibi, just seven years early) are going after Netflix's screen time. I close on Oura pulling its IPO at a $15 billion valuation, the AI data premium on its wearables, and which businesses get a one-time AI windfall, with home builders like Lennar as my value investor answer.The New York Times piece on micro dramas: https://www.nytimes.com/2026/10/06/magazine/microdramas-tv-shows-hollywood-entertainment.htmlThis episode is sponsored by Trata: https://www.trata.com. Trata takes anonymized calls where two buy-siders talk through a stock they're long or short, the opportunity, the risks and where the street is wrong, and lets you read the transcript. Whenever I start on a new company, my Claude agent's first step is pulling the Trata transcripts that mention it.Chapters:(00:00) What I'm rambling about this month(03:36) Sponsor: Trata(04:41) M&A brain teaser: SOLS calls off its merger(08:48) Starbucks and Chipotle: a merger with zero synergies(11:21) The only synergy is Brian Niccol(12:30) SBUX and CMG since Niccol switched(14:00) State of the markets: indices up, investors despondent(15:55) A bloodbath underneath: everything but tech and energy(17:13) Is the Russell a broken index?(18:45) How the Russell dodged SMCI and the AI peak(20:11) Unexpected competition: FICO's regulatory crackdown(21:00) IMAX vs Disney's Infinity Vision(23:11) Micro dramas, Quibi and the Netflix bear case(27:20) Oura delays its IPO(28:22) Oura's AI data premium(29:04) What else gets more valuable with AI?(30:12) Home builders and a one-time AI windfall(32:01) HYROX and wrapping upLinks:Yet Another Value Blog - https://www.yetanothervalueblog.comSee our legal disclaimer here: https://www.yetanothervalueblog.com/p/legal-and-disclaimer

The 10 year has gone from 4.2% at the start of the year to 4.6% in late August to 5.1% today, and the S&P is still basically touching all time highs. Interest rates are financial gravity, but I wonder if gravity works on a lag. Consumers and allocators are slow to move money from stocks to bonds, and corporates termed out a lot of 3.5% debt in 2021 to 2023 that starts rolling in 2028 to 2031. Today's free cash flow is flattered by that spread. Underneath the index there is already real pain in housing, levered small caps and biotech, and my bottom line is the margin of safety in stocks keeps getting skinnier.From there: why merger arb spreads that looked juicy to anyone who came of age in ZIRP are just the time value of money at 5%, and where the crashes and long bear markets went. We have gone from 1929, 1987 and 1972 to 1974 to a nine month GFC, a two month COVID drawdown and a tariff tantrum that lasted weeks. Is that a stronger market, or a more fragile one waiting for one big break?Then a friend's line that every investor is either overconfident or has imposter syndrome. I am firmly in the imposter camp, which is a problem, because almost every great investor I can name reads as overconfident. Survivorship explains a lot of it: we don't see the overconfident coin flippers who zeroed out, and Archegos is the cautionary tale. I close on mentorship, sparked by Ian Cassel's book Stock Picker and his mentor Skip, and why everyone, Buffett included with Ben Graham, eventually outgrows their mentor.Today's post on Muse and the inertia sell off: https://www.yetanothervalueblog.com/p/musings-on-muse-the-inertia-sellMy episode with Ian Cassel on Stock Picker: https://www.yetanothervalueblog.com/p/ian-cassel-on-stock-picker-the-bookLast month's rates piece: https://www.yetanothervalueblog.com/p/rates-are-screaming-and-stocks-arentThis episode is sponsored by Fiscal.ai: https://fiscal.ai/yav. I'm a paying customer and I connect to Fiscal through its API. Two things I use it for: a huge database of fund letters I can pull up on any name I'm researching, and audited financials where every number in the model links back to the source. Use my link for 15% off their AI connector.Chapters:(00:00) What I'm rambling about this month(01:57) Sponsor: Fiscal.ai(03:30) Two stories: Muse and rates(04:24) Interest rates are financial gravity(07:35) Does gravity work on a lag? The coming debt refi wave(09:17) Index highs, pain underneath: housing, small caps, biotech(11:23) Rates and special situations: merger arb isn't free money anymore(14:22) Where did the crashes and long bear markets go?(18:11) Fed put, fragility, and one big break(19:55) Overconfident investors vs imposter syndrome(23:20) Survivorship: Archegos and Situational Awareness(25:32) Mentors: Ian Cassel's Stock Picker and Skip(27:16) Even Buffett outgrew Ben Graham(30:07) Journaling as a way to keep evolving(30:51) Wrapping upLinks:Yet Another Value Blog - https://www.yetanothervalueblog.comSee our legal disclaimer here: https://www.yetanothervalueblog.com/p/legal-and-disclaimer

Nintendo's flywheel is not there. That is Simeon McMillan's call, and it is the one that has media longs emailing me. His case: Switch 2 is the best console launch in history and the attach rate still came in well below Switch 1, the Mario Kart bundle flattered even that number, Nintendo Switch Online accounts have been flat for years and almost nobody has noticed, and Nintendo just took its first mid-cycle price increase because memory costs are not coming down. He is not calling for a crash. He is saying you cannot put this one away for two years.I push back hard. Ocarina of Time is going to be a top five selling game in the world and it is a remake, which is the old Buffett line about Disney being an oil well where the oil seeps back in. Simeon's answer is that Disney kept buying new IP to refill the well and Nintendo has not, and that two to three movies a year and a dozen parks would change his mind.Then we flip to the two he is long. Spotify is his highest conviction idea and he opens with a mea culpa: he assumed the labels would hold the margin hostage forever, and missed that the 2024 and 2025 renegotiations made the royalty rate fall as Spotify grows. I read those same deals less charitably, as Spotify winning outright rather than everyone winning together, and I think the next round goes further. We get into why advertising keeps underperforming, why that might be fine, and what marketplace programs actually are once you have worked in radio. On Netflix he is bullish on a stock that has been cut hard, and I ask the obvious question: Netflix trades at half Spotify's multiple with the same growth and the same margin story, so why is Spotify still the top pick.Also, the NFL ratings test. Netflix's Melbourne game did 18.5 million in the US this year against YouTube's 17.3 million globally for Brazil last year, and Netflix needs a login while YouTube was free.This episode is sponsored by Fiscal.ai: https://fiscal.ai/yav. I am a customer and I pay for the API myself. Two things I actually use it for: the fund letter database wired into the API, so when I prep a podcast I get every letter thesis on the name in one pass, and audited financials where every line in the model links straight back to the source. Use my link for 15% off the AI connector.Chapters:(00:00) Intro(01:02) Sponsor: Fiscal.ai(02:35) The quarterly media check-in(03:58) Why Simeon is bearish on Nintendo(08:37) Remakes: is Ocarina of Time the oil well?(11:48) Memory costs and the first mid-cycle price hike(14:30) The attach rate and the Mario Kart bundle(16:47) The bull rebuttals, and subscriber growth that isn't(19:08) Nintendo margins, and whether 40% is real(22:19) Should Nintendo have sold itself?(24:32) IP, movies and parks, with Pokemon as the template(28:09) Spotify: the mea culpa(31:39) The label deals, and who actually won(32:41) Advertising, and payola by another name(36:16) What AI does to Spotify(39:00) 40x earnings: priced for perfection?(42:36) Daniel Ek steps back, and are CEOs overrated(47:08) Netflix as a value stock(53:13) AI generated content and the Netflix moat(59:49) NFL on Netflix vs YouTube(1:02:08) Gun to your head: Spotify or Netflix?(1:05:34) Wrap, and the student tierSimeon McMillan / Accrued Interest: https://www.accruedint.comLinks:Yet Another Value Blog - https://www.yetanothervalueblog.comSee our legal disclaimer here: https://www.yetanothervalueblog.com/p/legal-and-disclaimer

A quarter of the companies on the London Stock Exchange's main board have disappeared in four years. Private equity keeps paying 50 and 60 percent premiums and still walking away with a bargain, because the starting valuations are broken. Swen Lorenz of Undervalued-Shares has spent the last few months writing open letters to UK boards telling them to stop waiting to be rescued and start pulling the levers they already have.I have been calling the UK an emerging market on this podcast for three years, and my problem with the trade is right there in the setup: if the only way you make money is owning the one company that happens to get taken out, that is not alpha. So we spend the first half on what would actually fix it. Swen puts most of the blame on the big domestic funds, in outflow for a decade, pushing companies toward dividends to fund their own redemptions. I put most of it on boards that own no stock, treat the seat as a club membership, and check the dividend box every year. Then we get concrete on two names. ZIGUP (ZIG), which I own a little of, has a plan that pays seven executives up to 69 million pounds if the share price re-rates, trades under four times EBITDA, and still has not bought back a single share. And Craneware, which turned down a 26 pound approach from Bain last year and now trades at 13.Swen on how retail investors can unlock the UK market: https://www.undervalued-shares.com/weekly-dispatches/retail-investors-can-unlock-the-uk-market-here-is-howHis earlier write up on UK M&A and activism: https://www.undervalued-shares.com/weekly-dispatches/uk-ma-and-activism-is-the-dam-about-to-break/This episode is sponsored by Fiscal.ai: https://fiscal.ai/yav. I am a customer and I pay for the API myself. Two things I use it for: a huge database of fund letters wired into the API, so the first thing I do when prepping a podcast is pull every recent letter on the name and see the bull and bear case, and audit-linked models where every line in the model links straight back to the source. You can get 15% off their AI connector at the link.Chapters:(00:00) Intro(01:23) Sponsor: Fiscal.ai(02:57) Swen Lorenz, Undervalued-Shares(04:30) A quarter of the LSE has disappeared(06:05) If the only exit is a takeout, is that alpha?(07:52) The levers boards refuse to pull(10:17) Boards, funds, or shareholders: who is to blame?(15:23) Active outflows everywhere, so why is the UK uniquely cheap?(16:57) Culture, and the case for foreign activists(18:25) Index funds, proxy advisers, and a 95% approval vote(21:04) The dividend trap: the board or the fund manager?(25:33) Boards as a club, and the Gamma Communications topping bid(28:07) You get what you pay for: UK board pay and stock ownership(30:03) Swen's activist checklist(32:00) The dam is about to break(34:12) ZIGUP: the business, and the letter(36:18) The VCP: 69 million pounds riding on the share price(40:19) Why I am disappointed: no buybacks, still paying the dividend(42:14) The real risk is an unsolicited bid at too low a price(43:51) US roadshows and other non solutions(48:27) Craneware: from a 26 pound bid to 13(51:59) SaaSpocalypse fears and the trading update(53:32) Closing: a golden opportunity, and whether to relist in the USSwen Lorenz / Undervalued-Shares: https://www.undervalued-shares.com/Links:Yet Another Value Blog - https://www.yetanothervalueblog.comSee our legal disclaimer here: https://www.yetanothervalueblog.com/p/legal-and-disclaimer

Management interviews might be the most underdeveloped skill in fundamental investing. Ross O'Toole has been investing for 25 years and read over 500 investment books, and he couldn't find a single one on how to actually conduct an investor-management interview.... so he wrote Breaking the Script, a field guide to getting management teams off their rehearsed talking points. We get into why "what" questions beat "why" questions, whether you should grade a plastic surgery CEO and a coal company CEO on the same curve, the case for recording your management meetings, and why asking for examples is one of the biggest double edged swords in investing.I push back with my standing worry: management teams are really, really good salesmen, and I always walk out of these meetings wondering if I'm the patsy at the poker table. Ross's answers (build a longitudinal baseline over repeat interviews, ask for the negative example every time you get a positive one, and save the hard questions for the crescendo) are why this book went straight to the top of my "hand it to an intern" list.Grab Ross's book, Breaking the Script: https://amzn.to/4fLg8ROThis episode is sponsored by Fiscal.ai: https://fiscal.ai/yav. Fiscal.ai is a modern financial data platform for global equities. In addition to their web-based terminal, they offer API access to real-time fundamental data: 20+ years of financial statements, ratios, segments, and KPIs, with data updating within minutes of earnings reports, not days. I'm not just an advertiser; I signed up with my own money to plug their API into the AI tools I've been building. Use my link, fiscal.ai/yav, for 15% off.Chapters:(00:00:00) Introduction(00:02:00) Why management interviews are a double edged sword(00:03:47) Why Ross wrote Breaking the Script(00:07:15) Are we deluding ourselves? Testing management credibility(00:11:53) Should you grade CEOs on a curve across industries?(00:14:44) "What" vs "why": framing contentious questions(00:18:27) Are interviews actually an alpha source?(00:19:39) Where management matters most: deep value vs tech(00:22:32) Would interviewing 2008 Zuckerberg have helped?(00:25:14) Preparation and repeat interviews(00:29:20) Should you record management meetings?(00:31:54) Asking for examples: conviction builder or sales pitch?(00:34:00) Always ask for the negative example(00:36:00) Making management grade their own execution(00:38:20) Interviewing companies under activist pressure(00:41:30) Buffett's silver bullet question, reframed(00:46:02) Question order: crescendo to the hard stuff(00:48:29) Closing thoughtsRoss O'Toole / Breaking the Script: https://amzn.to/4fLg8ROLinks:Yet Another Value Blog - https://www.yetanothervalueblog.comSee our legal disclaimer here: https://www.yetanothervalueblog.com/p/legal-and-disclaimerProduction and editing by The Podcast Consultant - https://thepodcastconsultant.com/

Light & Wonder ($LNW) is one of three companies in the slot machine oligopoly, with 70%+ recurring revenue, and it trades at 7-8x EBITDA while Aristocrat, its closest peer and arguably its slower-growing twin, trades at roughly double that. Zach Buckley thinks the market is wrong on almost every count: the stock has traded like a SaaS chart on AI fears even though slot content has almost no AI exposure, the Street doesn't believe 2028 targets from a management team that already hit the last three-year guide it set, and the soft first half is a game-launch timing story (Aristocrat launched in H1, Light & Wonder's slate lands in H2), not share loss. Zach has sized this the largest he's ever sized anything, and you can hear it.I push back where I can: whether Caesars could ever build its own boxes (Zach: Marriott doesn't build elevators), why management is paying down debt to appease Australian shareholders instead of murdering the share count at these prices, what the Dragon Train settlement really cost them, and SciPlay's genuine AI risk. We also cover the move to a sole Australian listing, the Grover charitable-gaming acquisition at ~7.5x EBITDA, and what would actually break the thesis.This episode is sponsored by AlphaSense: https://alpha-sense.com/yavp. Most AI tools are very good at sounding right, but can you trace the answer back to the filing, the transcript, the exact passage that drove it? AlphaSense's AI platform is built for exactly that: over 500 million curated documents, from broker research and expert transcripts to filings and earnings calls, with every answer linked back to an exact, verifiable source. See it for yourself with a free trial at https://alpha-sense.com/yavp.Chapters:(00:00:05) Introducing Light & Wonder(00:03:09) Light & Wonder's transformation(00:05:57) Australian listing creates opportunity(00:08:36) Recurring revenue business model(00:09:39) Why game quality matters(00:11:45) Business quality meets valuation(00:13:31) Explaining Aristocrat's valuation premium(00:17:15) AI offers productivity upside(00:19:08) SciPlay faces greater AI risk(00:21:20) Barriers protect game development(00:23:56) Casinos avoid vertical integration(00:29:05) Why Australia made sense(00:30:25) Dragon Train litigation explained(00:32:14) Assessing lingering litigation impact(00:34:11) Why investors doubt targets(00:36:04) Short-termism drives investor skepticism(00:39:41) Balancing buybacks and deleveraging(00:42:39) Grover acquisition adds growth(00:43:55) Electronic pull tabs explained(00:47:14) What could break thesis(00:50:41) AI fears create opportunities(00:52:32) Zach summarizes investment thesisZach Buckley / Buckley Capital Partners: https://www.buckleycapitalpartners.com/Links:Yet Another Value Blog - https://www.yetanothervalueblog.comSee our legal disclaimer here: https://www.yetanothervalueblog.com/p/legal-and-disclaimerProduction and editing by The Podcast Consultant - https://thepodcastconsultant.com/