Zoom: The “Anti-Fragile” Asymmetrical Bet?

“The IT department of every company is going to be the HR department of AI agents in the future. Those digital employees are going to work with our biological ones, and that’s going to be the shape of our company in the future.” — Jensen Huang, CEO of NVIDIA (CES 2026)

If the Godfather of AI is right, the future of work isn’t just better video calls—it’s managing a hybrid human + digital workforce. While the market wrote Zoom off years ago, the company has quietly repositioned itself as the natural “HR Department” for those agents.

Investors are still psychologically scarred. Mention Zoom and the ticker probably triggers 2021 PTSD. Just the mention of the ticker probably feels like a personal attack. Even Cathie Wood fully liquidated her position in late 2023, but what if her investing thesis was correct, just early? While the market is staring in the rear-view mirror, they are missing a fortress balance sheet and a hidden AI stake that could soon rival the company’s entire current valuation.

The Cash Fortress (The Valuation Floor)

Forget the hype. Let’s look at the math. This is where the margin of safety lives:

Market Cap: ~$23 billion
Cash & Marketable Securities: $7.8 billion (Zero debt)
Enterprise Value: ~$15.2 billion
Free Cash Flow (FY26): $1.9 billion

You are buying a premium SaaS platform—a global brand with 140k+ enterprise seats and sticky workflows—at ~7.5x FCF. For context, boring hardware companies and legacy retailers trade at higher multiples. The market is pricing Zoom for a slow death, but the cash flow says it’s thriving.

This is the definition of “Dirt Cheap.” Even without a major catalyst, the downside is protected by a mountain of cash and a business that produces liquidity.

The Anthropic Windfall: A “free” Home Run

In 2023, Zoom quietly invested $51 million in Anthropic at a $4 billion valuation. Fast forward to February 12, 2026: Anthropic closed a $30 billion Series G at a $380 billion post-money valuation.

Analysts peg Zoom’s stake at $2.5–$4.5 billion today. If Anthropic IPOs at the rumored $750B+ range this year:

The Math: Zoom’s stake could hit $10 billion+.
The Proxy Play: Amazon owns more of Anthropic, but because AMZN is a $2.5T behemoth, the stake only moves their needle 3-5%.
The Impact: For a giant like Amazon, that’s a rounding error. For Zoom, it’s nearly 50% of its current market cap. When you buy Zoom today, you aren’t just buying a software company; you’re buying a massive, liquid stake in the leading “reasoning” AI- for almost nothing.

The Gen Z Factor & The “War Chest”

As Gen Z enters the C-suite, the “Microsoft-only” era is fading. 2026 data show that Gen Z and Millennials (who now make up over 60% of the workforce) prefer the low-friction and video-first nature of Zoom. They want a “System of Action,” not a “System of Record.”

The Competitive Advantage (vs. Salesforce/CRM): CRM is a giant, but it has virtually no cash compared to Zoom’s hoard. Zoom is lean, founder-led, and has a $7.8B war chest to acquire high-growth AI startups to force that return to 15% revenue growth.

The “Anti-Microsoft” Pivot: The Orchestrator of AI

The bear case is simple: “Microsoft Teams is free, so Zoom is dead.” But the data shows a “David vs. Goliath” moment is happening in the Enterprise:

Enterprise Revenue: Grew 7.1% last year (Q4 FY26), triple the rate of the small-biz segment.
The Fortune 10 Win: Zoom recently displaced Cisco in a 140,000-seat deal. Why? Because giants are tired of “Microsoft Lock-in.

The Federated AI Approach: While Microsoft locks you into OpenAI, Zoom’s AI Companion 3.0 is a “conductor.” It switches between Anthropic (Claude), OpenAI (GPT-5), and its own Small Language Models in 0.1 seconds. It’s “Best-of-Breed” vs. “Whatever Microsoft bundles.”

Metric	Salesforce (CRM)	Zoom (ZM)	Why This Favors Zoom
Market Cap	~$179.7B	~$25.3B	Lower Bar: Easier for a $25B company to 2x than a $180B giant.
Net Cash	$8.4B	$7.8B	Acquisition Firepower: Zoom’s cash is 30% of its market cap. CRM’s is only ~4%.
Enterprise Seats	~150,000 Companies	~220,000 Companies	Upsell Runway: Zoom has more “doors” to walk through to sell Phone/AI/Contact Center.
AI/Agent Displacement	High Risk	Lower Risk	Salesforce relies on “human” seats (Sales/Support). Zoom’s video/phone is “infrastructure.”
Debt Load	$7.6B	$0	Flexibility: Zoom has zero “interest rate heartburn.”

Why Zoom Wins the “Agent” War Yuan Saw First

While Salesforce’s Marc Benioff spent 2025 screaming about “Agentforce,” Eric Yuan was already there in June 2024. In his Decoder podcast interview nearly two years ago, Yuan laid out a “prophetic” vision of “Digital Twins.” He envisioned AI agents that don’t just summarize meetings but attend them for you, negotiate contracts on your behalf, and make decisions based on your specific “First Principles.”

At the time, the market laughed it off as sci-fi. Today, it is the north star for the entire industry. Zoom wins here because:

The System of Action: AI agents don’t want to navigate 20 layers of a legacy CRM. They want to “join the meeting,” take notes, and execute tasks. Zoom is where the work actually happens.
The Switzerland of Tech: Zoom doesn’t force you into one LLM. Your digital twin can pick the best engine without vendor lock-in.
Zoom Phone just crossed 10 million paid seats. It’s the “wedge” that’s breaking open massive platform deals.

Rare Asymmetry with Minimal Capital Risk

This is a very clean, asymmetrical setup in tech. Zoom doesn’t need Microsoft or Salesforce to implode. It doesn’t need another pandemic. It just needs a founder-led company with a history of delivering during uncertain times to keep executing and achieving a very attainable 10-15% growth rate. Even a 20-30% growth, though wishful, is not delusional.

The Risks? This thesis will be tested. The primary risk here isn’t the total loss of capital—at 7.5x FCF, the floor is remarkably solid. Instead, the risk is opportunity cost. We don’t know how long it will take for the market to wake up and re-rate this “pandemic relic” into a “2026 AI powerhouse.”

In my view, the risk of losing principal is surprisingly low, but the patience required to see the thesis materialize is high.

Disclosure: I am not bearish on Microsoft; in fact, I own shares in MSFT. I am not bearish on CRM (Salesforce), though I currently own no shares. I simply believe Zoom is a mispriced anomaly hiding in plain sight.

The Duolingo “Lizard Brain” Liquidation: Why Retail Is Wrong Again

This is exactly why the average retail investor consistently underperforms the S&P 500: they are biologically wired to buy high and sell low.

We are currently witnessing a classic “Retail Doom Loop” with Duolingo (DUOL). If you’re staring at the price ticker instead of the fundamentals, you’ve already lost the game.

Your Biology Is Your Worst Enemy

The “lizard brain” (the amygdala) is a marvel of evolution designed to keep you alive, not to make you wealthy.

If your tribe started running 50,000 years ago, you didn’t pause to ask, “Is that a lion or just a technical correction?” You ran. In the wild, that is survival. In the markets, that is financial self-destruction.

The Tribal Sell: The stock drops 20% in a week → your lizard brain screams, “The tribe is fleeing! There must be a predator (AI) I can’t see!”
The Narrative Pivot: Loss aversion (we feel the sting of losses roughly 2x more than the joy of gains) forces us to rewrite history. We don’t say “the price is lower.” We say “the company is failing.” It’s emotional pain relief dressed up as “analysis.”

The Retail Loop of Doom

Retail investors rarely buy value; they buy social proof. Here is how the loop destroys portfolios:

The Validation Phase: Retail ignores the stock while it’s quietly forming a base. They only jump in after a +40% rally because “the price action proves it’s good.”
Conviction Evaporation: Because the thesis was built on a green line moving up and not fundamentals, the very first red candle triggers panic.
The Narrative Flip:
- Price Up: “Luis von Ahn is a genius; the owl is the future of AI.”
- Price Down: “The app is a fad; AI is disrupting them; the CEO is distracted.”

This is reflexivity at its most toxic: price shapes mood, mood shapes selling, and selling drives the price lower until the entire tribe has fled the cave.

Prisoners of the Moment

The current wave of hate toward Duolingo isn’t analysis—it’s emotional venting from people who bought near the $500+ peak in May 2025 and are now feeling the burn. They are prisoners of their own portfolio pain, not the reality of the business.

If you’re “hating” the company today, ask yourself: Were you investing, or were you gambling with leverage and money you couldn’t afford to lose? Your anger isn’t with the green owl. It’s with your own risk management.

The Irrelevance of Anchoring

“I bought at $500, so I need it to get back there to be ‘right.’”

Your entry price is 100% irrelevant. The past transaction cannot be undone. All that matters is what the business is worth today versus its future potential. If you overpaid for a great house in a bidding war, the house didn’t suddenly become “bad”—you just paid a premium for a premium asset.

The market is currently offering Duolingo shares at a 70–80% discount to the peak. I’m betting this is normal growing pains, not an irreparable decline. No great company avoids “off years.”

I very much could be wrong but my cost basis and holding period is unique to me. I am comfortable with the risk, and that’s all that matters.

Pivot from Strength: The Agility Advantage

Ignore the stock price for a minute. Duolingo is acting from a position of extreme strength. Compared to the “supertankers” of digital media, Duolingo is a nimble speedboat.

Company	Market Cap	Employees	The “Agility” Factor
Duolingo	~$4.7B	~850	Speedboat: Can pivot the entire roadmap in a month.
Spotify	~$106B	~7,300	Tanker: Massive scale, but harder to maneuver.
Netflix	~$406B	~16,000	Supertanker: Incredible reach, but heavy overhead.

From first principles, it is infinitely easier for Duolingo to pivot its roadmap to AI-native learning than for these behemoths to turn their ships. Focusing on user growth over immediate monetization is the correct long-term move, even if it causes short-term “earnings heartburn.”

Planting vs. Harvesting

Wall Street is throwing a tantrum because Duolingo is “foregoing” more than $50 million in bookings to remove ad friction.

The contrarian view? They aren’t losing money: they’re reinvesting in distribution. They are betting that a network effect of 100 million daily active users (DAUs) will be worth far more than squeezing a few extra bucks out of frustrated free users today. They are trading short-term harvesting for long-term dominance.

The AI “Barrier to Success”

In a world where everyone has GPT-4, the winner isn’t the one with the “best” AI, it’s the one with distribution, brand, and proprietary data. Duolingo has billions of data points on how humans learn and a owl brand that is a global cultural icon. They aren’t being disrupted; they are the disruptors. They are using their $1.04 billion cash pile and a new $400 million buyback to repurchase shares while the lizard-brain crowd hands them over at a massive discount.

Final Thoughts:

I’ll concede this: if you signed up for a quiet, slow-and-steady compounder, DUOL isn’t for you. Luis von Ahn is in “Full Founder Mode,” and that makes some shareholders uncomfortable.

But if you have an appetite for volatility and believe in the long game, this is a prime investment candidate for a Roth IRA. The potential gains are astronomical—and entirely tax-free.

Stop confusing a high-volatility stock with a risky company. They are not the same thing. If they hit 100M DAUs by 2028, buying DUOL near a $4.7B valuation today will look a lot like buying Netflix in 2011. Forget your entry price and the stock price. Focus on the compounder.

Duolingo: The Fake Sentiment Crisis

The market currently treats Duolingo like a “dead app walking,” terrified that AI will turn language learning into a relic. They are playing the math of a utility company while ignoring the psychology and network effects of a platform. The argument that Duolingo is headed to zero is dumb. The argument that AI language tools make learning a new language obsolete is even dumber.

Part 1: The Blackjack Blunder (Panicking Over a 6)

In Blackjack, if the dealer is showing a 6—the statistically weakest card in the deck—and you are sitting on a Soft 18 or a 7, you don’t surrender. You double down.

The Table Panic: Right now, the market is “surrendering” because they are convinced the dealer has a King or an Ace hidden under the cards. They are sweating over a ghost.
The Reality: The dealer (the bears) has a weak hand built on vague fears about AI. Meanwhile, your hand is a 40% revenue grower with $1.1 billion in net cash and zero debt. The market is surrendering a winning hand because it’s spooked by a bust card. When a stock is down 70% from its high, but the business is still growing revenue at 41%, the market is no longer pricing the business on facts—it’s pricing it on fear.

Part 2: Dirt Cheap—The Valuation Gap

The quants are missing the forest for the trees. Let’s look at the actual damage:

The “Gift” Multiple: Duolingo is trading at an EV/Sales of ~4.2x. For a 40% grower, that is an absolute anomaly. Most software companies growing this fast trade at 8x to 12x revenue.
The Cash Rebate: With $22 per share in net cash, you’re buying a world-class growth engine at a “distressed asset” price.

Part 3: The Platform Moat (Robinhood, Spotify, and Bad Bunny)

Comparing Duolingo to titans like Meta or Netflix might be a stretch in scale, but the logic is identical: platforms that own the “habit” win.

Engagement is a Moat: In Q3 2025, Duolingo crossed the massive milestone of 50 million Daily Active Users (DAUs), growing 36% YoY. People aren’t just downloading the app; they are addicted to it. A translation tool is a utility; Duolingo is a habit.
The Spotify/Robinhood Parallel: Remember 2022? The “smart money” said Spotify was dead because of Apple Music. They said Robinhood was a “zero” because of Fidelity. They were wrong. They ignored the UX and the habit. Same with edtech rivals like Babbel or Rosetta Stone. Duolingo’s network effects (social sharing, leaderboards) make it the iPhone of apps: sticky in a way pure utilities aren’t. AI might commoditize translation, but it can’t commoditize community. Duolingo has 100M+ total users sharing streaks; that’s a flywheel no chatbot can spin alone.
The 35% Spike: Look at the “Bad Bunny Effect.” Following his Super Bowl LX appearance, Duolingo saw a 35% week-over-week spike in Spanish learners. People don’t just want to “understand” culture; they want to participate in it.

Part 4: The “Utility Fallacy” (Why AI Can’t Kill Art)

The argument that AI translation makes learning a language obsolete is the single dumbest take in modern tech. It treats language as a “data transfer” problem, ignoring the soul of human behavior.

Language = Social Status: Treating language like a pure utility is an enormous misreading of human nature. Just like food is more than just fuel, and the clothes you wear go beyond just functionality, language is a signal of effort, intelligence, and respect.
Soul Can’t Be Translated: People don’t listen to Bad Bunny because they need to translate his lyrics into a technical document. They listen because they like the music, the rhythm, and the slang. You don’t learn a language to “get the data”—you learn it to inhabit the soul of the culture.
The Attraction Factor: A survey found that 79% of adults find bilingualism more attractive than monolingualism. Using a translator app to impress someone you’re attracted to has zero “oomph.” It’s the difference between a “fancy restaurant” and “buying ingredients at the store.”
The Restaurant Logic: Saying AI kills language apps is like saying people will stop eating at restaurants because groceries are cheaper. We don’t eat out for the calories; we eat out for the experience and the connection.

Let me be clear: Those arguing that AI will turn language into a utility are engaging in one of the silliest “intellectual” debates I have ever heard. It is shockingly ridiculous. It assumes humans are robots that only care about the shortest path from Point A to Point B. In the real world, we take the scenic route because that’s where the value is. And here’s the kicker, bears forget: Duolingo is AI. They’re building the moat higher while rivals play catch-up. Their Duolingo Max tier (powered by GPT-4) rolled out AI-driven “Video Call” and “Roleplay” features last year, letting users practice real conversations with an AI that adapts on the fly. It’s not replacing the habit; it’s supercharging it.

Part 5: The 5-10x Opportunity (The Bottom Line)

Investing is most rewarding during difficult times when sentiment is at its lowest. Even if you don’t believe Duolingo returns to its peak 45x revenue multiples, this is an opportunity worth taking. With earnings dropping on February 26 (just two weeks out), hint at it as the “next card flip.”

Asymmetric Risk: the downside is protected by a billion-dollar fortress.
The Path to $1,000: For Duolingo to reach $1,000, it needs to become a $47 billion company. In the tech world, that’s just a “successful mid-cap”—the size of Workday or Lululemon. Given its AI-powered “Personal Tutor” narrative, this is a very plausible outcome over the next 5-10 years.
I started a position last week. An opportunity based on a SaaS apocalypse, which feels irrational given that Duolingo is not even a SaaS company. I will look like a visionary or an investor in complete denial.

The Verdict: You’re being offered a “Royal Flush” opportunity. By the time the math proves Duolingo is a $50 billion company, the stock will already be at all-time highs. Betting against the Owl is betting against human nature. I’ll take the other side of that trade every time.

Lemonade’s Moment of Truth: From Speculation to Generational Play

The Mainstream Blind Spot

Most investors are still fixated on the smoking crater of the 2022 bubble. They haven’t refreshed their mental models to reflect Lemonade’s evolution from a cash-burning startup to a data-driven compounding machine. That lingering skepticism? It’s pure alpha.

The Pivot to Profitability

Lemonade has long been a tantalizing story, but the big “if” was always profitability. Now we’re witnessing the “how.” The narrative has flipped from raw growth to ruthless operational efficiency. Key highlights from Q3 2025:

In-Force Premium (IFP): Reached $1.16 billion, up 30% YoY—their 8th straight quarter of accelerating growth.
Loss Ratio Mastery: Gross loss ratios have plummeted from 73% down to 62%. In insurance, that 11-point swing is the difference between a straw house and a fortress.
Efficiency at Scale: Loss Adjustment Expense (LAE) ratio—the cost to process claims—dropped to 7%, below legacy players like Progressive or Geico (typically 9-10%).
Reinsurance Revolution: Primary quota share ceded fell from 55% to 20%. Lemonade’s finally retaining the “juice” instead of outsourcing most profits to reinsurers.

The Coiled Spring: The Tesla Shot of Adrenalin

A coiled spring demands a spark. Enter the Autonomous Car Insurance launch: Arizona on January 26, 2026, and Oregon in February. By plugging directly into Tesla’s Fleet API, Lemonade delivers ~50% per-mile discounts with Full Self-Driving (FSD). This isn’t just insurance; it becomes a viral customer magnet.

The “X” Factor: Tesla influencers’ publicity and Elon Musk’s orbit have generated millions of organic impressions. In a world where a Super Bowl ad costs $7 million for 30 seconds, Lemonade effectively ran a “digital Super Bowl campaign” for free.
The Safety Edge: Lemonade’s data shows FSD-assisted driving is roughly 2x safer than human driving. They are pricing risk with high-resolution telemetry that traditional insurers simply can’t touch.

The 10x Revenue Multiplier

The hidden gem? Premium per Customer is now $403 (up 5% YoY). As the “Lemonade generation” matures from $15/month renters to $150/month car/pet/home bundles, revenue per user could 10x while acquisition costs hold steady. It’s the flywheel legacy insurers envy.

The Bottom Line

I am extremely bullish. This isn’t the same as buying the hype at 70 in 2020. Over 5 years later, the company is dramatically more efficient, and “Car” is a proven engine rather than a theoretical startup.

The Lemonade thesis was never about a sleeker app; it was about a fundamentally superior information architecture. While the legacy giants like State Farm or Geico price based on broad ‘buckets,’ Lemonade is finally proving it can price at the individual level.

With the stock retracing under 70 (currently hovering around $63–$64 after a volatile start to the year), we may be in the final throes of disbelief. Q4 2025 Earnings Call on Feb 19th is just days away. The data is trending toward a triple-threat: accelerating growth, massive margin expansion, and a clear path to profitability. With the recent winter storms being less catastrophic than feared, the pathway for Lemonade to run in 2026 and 2027 is wide open.

The Clothing Company Outperforming Nvidia

Aritzia’s Q3 FY2026 was one of its best quarters ever—like a walk-off home run in the playoffs. For the first time in the company’s history, they crossed the CAD 1 billion revenue mark in a single quarter, hitting CAD 1.04 billion, up 42.8% YoY.

Aritzia grew sales by nearly 43% while increasing inventory by only 10%. This means their inventory turnover is accelerating and they’re selling clothes almost as fast as they can get them off the trucks. This leads to fewer markdowns and higher full-price selling, which is exactly why their gross profit margin expanded by 30 basis points to 46% this quarter. This 4.3x “Sales-to-Inventory” growth ratio suggests an operational efficiency that makes even the “Mag Seven” look sluggish.

Compare that to Lululemon: Their inventory grew by 11%, but revenue only grew by 7%. When inventory outpaces sales, it usually leads to one thing: markdowns. In fact, Lululemon’s Q3 earnings call explicitly noted that gross margins were squeezed by higher markdowns (up 90 basis points) and tariff impacts. They have ~$2 billion in yoga pants and gear sitting in warehouses that they’re struggling to move at full price.

Aritzia is actually running a more efficient operation relative to its growth than even Nvidia right now. Here’s a quick side-by-side:

Company	Sales Growth (YoY)	Inventory Growth (YoY)	Ratio (Sales/Inventory Growth)
Aritzia	42.8%	10%	~4.3x
Nvidia	62%	~32% (9M cumulative)	~1.9x
Lululemon	7%	11%	<1x

Aritzia’s ability to scale this aggressively while staying so disciplined on inventory is retail execution at its finest, turning hype into real, high-margin momentum. If you’re looking at consumer discretionary winners in this environment, Aritzia is flexing harder than most realize.

This quarter also saw the late-October launch of the Aritzia Mobile App, which hit 1.4 million downloads and became the #1 shopping app in North America on day one. E-commerce revenue surged 58.2%, proving that “Everyday Luxury” translates perfectly to a high-frequency digital experience.

In 2027, Aritzia isn’t just signing a lease; they’re opening a new 40,000 square foot flagship store of the former Nordstrom footprint in Vancouver’s CF Pacific Centre. Aritzia is officially planting its flag on the grave of the defeated old guard.

This is the coronation of a new king. It marks the definitive shift from the bloated, “everything-for-everyone” department store model to a new, aggressive power dynamic. Aritzia has engineered a psychological moat known as “Everyday Luxury.” This isn’t just fashion; it’s a socioeconomic pivot that captures the soul of the modern consumer:

High-End Design: The clothes look like they belong on a Paris runway (minimalist, high-quality fabrics, tailored fits).
Attainable Pricing: Because they control the supply chain, they can sell that “look” for $150–$400 instead of $2,000. By pricing themselves 30–40% below heritage luxury (The Row, Celine) but 20–30% above fast fashion (Zara, H&M), they’ve created a “sweet spot” of attainable exclusivity.
The Result: They’ve captured the “HENRY” (High Earner, Not Rich Yet) demographic. This group is remarkably resilient to macro downturns because they view Aritzia as a “reasonable” yet “necessary” indulgence rather than an extravagant splurge.
The Psychology: Since “big” milestones (real estate, stable pensions) are increasingly out of reach for many, the HENRY demographic is reallocating their discretionary cash into “micro-luxuries” that provide immediate status and emotional ROI.

As we are witnessing with Saks, the “department store” represents the old middle class: a place where you go to see a little bit of everything. It’s a dying generalist model in a world that’s increasingly specialized.

The Old Way: Middle class = Access to variety.
The New Way: Middle class = Access to a vibe. Aritzia doesn’t just sell clothes; it sells a lifestyle aesthetic. When you walk into their “Super Flagships,” you aren’t shopping; you’re participating in a brand-curated experience.

The stock is trading at record highs with a P/E that reflects “perfection.” But Aritzia is just hitting its stride. They’ve successfully moved beyond “leggings and hoodies” into a full-wardrobe solution. It isn’t just superb execution by management; it’s capturing the vibe of today’s consumer.

I bought the stock as a small position in 2023 and have held it and will continue to hold it. If we’re using a baseball analogy, we are still very early. For Aritzia’s growth, we haven’t even entered the 7th inning stretch. Aritzia currently has roughly 72 boutiques in the US (out of 139 total). For context, Lululemon has about 374 stores in the US. Aritzia’s stated goal is ~150 boutiques total by 2027, with long-term potential for 180- 200+ overall, focusing heavily on US expansion (8-10 new boutiques annually, mostly in the US). If Aritzia hits its 150-store near-term target, revenue will likely triple as brand awareness hits a tipping point.

I am officially pegging Aritzia as a stock to buy during a market correction or pullback. Unlike legacy retailers, Aritzia is currently expanding its US footprint into a demographic that views “Everyday Luxury” as a non-negotiable part of their personal identity. This psychological moat, combined with an operational efficiency that is scaling faster than its infrastructure costs, makes Aritzia uniquely qualified to weather consumer weakness better than almost any peer in the sector.

If the market gives me a discount on this level of execution, I’ll take it.

Is Lemonade (LMND) Becoming Dangerously Good?

***Philadelphia Phillies starting pitcher Zack Wheeler***

As an investor, I’ve had a love-hate relationship with Lemonade stock. I loaded up too heavily right after its 2020 IPO, only to regret not buying more aggressively when shares dipped into single digits. If you’re considering this name, approach it with caution—it’s a classic high-risk, high-reward bet. Lemonade remains a young company in its growth phase, far from maturity.

In hindsight, the stock’s wild ride in 2021 was fueled by meme-stock mania. It skyrocketed to $188.30 on January 12, 2021, despite the company having under one million policyholders and no auto insurance offering at the time. That bubble burst spectacularly, but beneath the surface, Lemonade’s fundamentals are showing real signs of improvement.

Back to the Drawing board:

The company has always excelled in technology, innovation, and customer acquisition. Profitability, however, has been its Achilles’ heel. I’d liken Lemonade to a highly touted high school baseball pitcher: a laser fastball and a nasty arsenal of pitches, but zero command on the mound. Without control, even the most talented arm flames out quickly; a great repertoire of pitches means nothing if you don’t know where the ball is going.

For a while, its business model reflected this wildness: impressive growth and customer attraction (the 103-mph fastball and filthy slider) were negated by sloppy underwriting (walks and hit-by-pitches). Critics often hammered the company’s high loss ratio as an unsustainable business model.

Think of Lemonade as a young Roy Halladay or Zack Greinke. Both were first-round draft picks who bombed early in their MLB careers, getting demoted to the minors amid mechanical issues and poor results. But they adapted, refined their approach, and emerged as Hall of Famers. Lemonade is on a similar trajectory.

Rebuilding the mechanics

The data over the most recent quarters tells a story of Lemonade tackling its core risks head-on:

Loss ratios are improving dramatically, signaling better risk management and a tighter command of its underwriting.
It has slashed its quota-share reinsurance from ~55% to ~20%, meaning it now keeps more of the premium (and risk) in-house.
After pulling back on its auto insurance rollout, underwriting discipline has strengthened, setting the stage for renewed expansion.

At its core, Lemonade’s business isn’t as complicated as it seems. It’s exceptional at drawing in new customers through its AI-driven, user-friendly platform. If it can continue tightening risk controls, revenue growth should accelerate while losses/expenses stabilize.

The Bull Case Ahead

Wall Street is sleeping on the roadmap ahead. I expect Lemonade to rev up its auto insurance product, expanding beyond the current nine states. New offerings like phone or travel insurance could further juice growth, pulling more users into the ecosystem and unlocking bundling discounts for multi-policy holders.

I’m not hyping this as a sure thing, but my optimism feels more grounded now: rooted in a business that appears primed for scalable profitability. That said, risks abound: Lemonade lacks a deep moat against competitors or economic headwinds, and plenty could still derail it, much like a pitcher blowing out their elbow on a single throw.

Analysts will likely pile in late, chasing momentum rather than leading the charge. I could be wrong, falling into the retail investor trap of being too early or clinging to a thesis that fizzles. Uncertainties remain, but Lemonade looks increasingly deserving of a small portfolio allocation. The bull case could spark explosive upside volatility, especially as AI evolves from infrastructure plays (like Nvidia or Google) to application-layer disruptors. Lemonade’s AI-powered insurance model positions it to capitalize on this shift, potentially delivering venture-like returns in the years ahead. While it’s no Palantir clone, the ride ahead could be like an epic roller coaster.

Why Palantir Reminds Me of Gangnam Style

Palantir redefined data analytics, while Gangnam Style redefined K-pop. Both achieved unexpected success through unconventional approaches, capitalizing on the right timing, transformative momentum, and cultural context.

Palantir, whose stock has surged over 400% in the past year, has become a focal point in the AI movement, despite its 20-year history. Similarly, Psy was already a veteran artist in South Korea, having started his career in 1999, 13 years before the global phenomenon’ Gangnam Style’ was released in 2012. The video eventually became the first on YouTube to reach one billion views.

Both share the same superpower: unorthodoxy, which helps them stand out in a competitive field. Palantir has unexpectedly fueled the spirit of AI-driven operations, just as Gangnam Style helped usher in K-pop on a global level. Alex Karp, an unconventional CEO, and Psy, the highly unconventional K-pop artist, embody this spirit of unorthodoxy.

Grappling with Valuation:

As a Palantir shareholder, am I saying this is the “peak” for the company? I don’t know. It seemed things were getting frothy when Palantir surpassed Lockheed Martin’s market cap; now it has a larger market cap than Lockheed Martin, Boeing, and Snowflake combined.

From a price-to-earnings or even price-to-sales ratio perspective, Palantir makes zero sense. While a projected growth rate of 36% is impressive, it falls short of what Zoom Communications achieved during the pandemic or what Nvidia has accomplished over the past three years.

It’s very possible that Palantir’s growth may have already peaked or is nearing its peak. I have little doubt, though, that the company has a long and successful future. However, I am highly uncertain if Palantir can grow enough to meet its sky-high valuation. Any signs of slowing growth could lead to a steep retracement. Any broader market correction or shift in sentiment could lead to a significant decline.

Even though I’m tempted to trim and sell more (if not all) of my shares every time the stock rises, it’s difficult to fight against momentum. Palantir is a profitable free cash flow machine, and its commercial business is in an early growth phase. The story remains compelling. There is little wrong with the actual fundamentals of the company; the focus of late has been predominantly on valuation metrics.

Lessons from Psy:

What Gangnam Style can teach us about Palantir is that a valuation doesn’t have to make sense to justify itself to keep rising. Momentum and narrative transcend numbers (even though Palantir’s numbers are solid).

As T-Pain said, words cannot describe how amazing the music video for Gangnam Style is. The video itself doesn’t make much sense, yet it has dominated globally:

This is an almost Dada-esque series of vignettes that make no sense at all to most Western eyes. Psy spits in the air while a child breakdances, sings to horses, strolls through a hurricane that shoots whipped cream in his face, there’s explosions, a disco bus, he rides a merry-go-round, dances on boats, beaches, in car parks and in elevators and generally makes you wonder if you have accidentally taken someone else’s medication.

Hit video may have a subversive message

I believe the numbers cannot fully capture the actual value of Palantir as a business. My brain struggles to grasp its market cap, and a voice within me says, “This is as good as it will get.” My heart tells me this growth story has a lot more breadth. It has the potential for a longer runway compared to unprofitable companies like Snowflake, CrowdStrike, and Cloudflare.

Perhaps this narrative about Palantir being grossly overvalued could be right and wrong at the same time. In the short term, Palantir is due for an inevitable and painful correction, but proves itself not as a ‘hype meme growth AI stock’ but more akin to a ServiceNow or Microsoft, where they are early in their business lifecycle and maintain a robust growth rate for an extended period.

Palantir’s story shows that powerful momentum can outpace solid fundamentals for a long time. Like Psy’s viral hit, its valuation may defy logic, but that doesn’t mean you sell the whole position. Stay disciplined: believe in the vision, but prepare for volatility.

Did Zoom Save Democracy?

After Joe Biden dropped out of the 2024 Presidential race in July, something notable happened: Zoom, the videoconferencing app, was used as a political rally call for Kamala Harris. On a Thursday summer night, a Zoom fundraiser attracted more than 200,000 viewers, making it the largest Zoom call in history. Several other Zoom fundraising calls have followed, started by diverse communities like “White Dudes for Harris,” “Dead Heads for Harris,” “Cat Ladies for Kamala,” and “Swifties for Kamala.”

I am not interested in discussing Harris’s surge in popularity but in why her supporters decided to use Zoom instead of Google Meet, Microsoft Teams, or Webex Meetings.

Investors in Zoom should feel confident in the business. Zoom’s death as a pandemic company is greatly exaggerated. The stock appears hated, I guess it’s a symbol or a vestige of a depressing moment in history, yet the fundamentals remain intact.

Zoom is the people’s choice because, through empirical testing, its audio and video quality ranked higher than its competitors.

Due to its ease of use, consistency, and complete/advanced features, it also flexes its brand power, even over Microsoft and Google.

Why does this even matter?

Despite the exceptionally bearish sentiment from Wall Street and the financial media, Zoom has proven its resilience. Sentiment, after all, is subjective and can quickly turn around as expectations and emotions change. This should reassure investors of Zoom’s potential.

Perhaps the narrative of Zoom being a pandemic boom-and-bust company is incorrect. The business is operating just fine and taking the necessary steps to transition from a popular one-trick video conferencing app to a full-fledged AI enterprise platform.

The video conferencing space is crowded, with heavy hitters who do not have the same relevance as Zoom on a consumer level.

How many people do you know to use Microsoft Teams outside of a work setting? Shouldn’t Teams or Google have more relevance or usage if it has the same functions and capabilities as Zoom?

Since Zoom is an enterprise tool, consumers downloading and using the app don’t move the needle or meaningfully impact the balance sheet.

It creates a halo effect for the enterprise business and enhances brand recognition.

Zoom is not a social media platform, yet it has brought an impressive amount of users for fundraising purposes, creating a sense of community and energizing supporters.

**Unnecessary negative-slanted wording from a Morning Brew newsletter**

If Zoom can impact an election and help elevate a candidate into the presidential office, something about the platform gives it a potential competitive advantage with a long-term wide moat. You can argue that Zoom cocktail parties and Zoom Yoga sessions are more of a pandemic-era fad, but affecting voter turnout is much more impactful.

Despite the recent downturn in Wall Street’s sentiment, I remain optimistic about Zoom’s long-term potential. The demographic most comfortable using the platform will eventually dominate the workforce, while those resistant to technological change will phase out. This bodes well for Zoom’s future growth.

Zoom’s platform is not just a tool; it has gained cultural phenomenon status. It’s the preferred choice among Gen Z across various industries, from education to healthcare, legal, events, government, and personal use. Understanding this trend is crucial for anyone interested in technology and its impact on society.

Zoom meetings, classes, and virtual court hearings are here to stay because they are widely popular, in high demand, and in a growing market.
Strong balance sheet: Zoom has approximately $7.5 billion in cash and zero debt. Roughly 40% of the company is cash (cash divided by enterprise value), signaling a high margin of safety. Compare that to Salesforce, which has an enterprise value of about $274 billion, $10.6 billion in cash, and $40 billion in debt.
Founder-led with strong key executives.
AI-infused with innovative ideas like AI avatars that trend towards the future of enterprise work tools.
Popular among a demographic that will make up most of the workforce in 10-20 years.

Zoom has become a popular company to “hate on” from Wall Street for various reasons that I believe are mainly irrational and short-sided. I fully expect Zoom to see a lift in revenue and guidance due to its solid fundamentals and riding the right enterprise software trends. If this happens, the narrative of how the company will dramatically shift more positively.

I wouldn’t call what Zoom has a network effect, but the virality appears very sticky. An enterprise app that transcends enterprise and has a profound impact on society outside of just business. Zoom is an attractive investment with much of the downside risk already priced in.

Dog Chasing Stock

Nvidia has gotten toppy recently.

Nvidia has demonstrated an impressive growth trajectory, surging nearly 2,200% from $6 to briefly touching $140 in under five years. This meteoric rise even saw it surpass Microsoft as the most valuable stock in the market for a brief period.

Long-term investors, your perseverance and discipline have paid off. You’ve demonstrated two of the most crucial traits of successful investing: patience and discipline. While many struggle to hold a stock for even a year, you’ve shown the strength to hold on for much longer. This is an achievement worth celebrating.

The stock has made parabolic gains, but based on logic, rationality, and sound judgment, it’s time for long-time investors to cash out at least a small portion of your paper gains.

Nvidia is a fantastic company with A+ growth, leadership, and profitability. However, it is not immune to the macro economy, slowing demand, or a change in momentum/sentiment, which will inevitably happen.

As share prices rise, predictably, people with full-blown FOMO are joining the bandwagon late to the party. During this AI fever, consideration for valuation and rationality is put on the back burner as “dumb money” enters the market.

The people buying Nvidia stock now are momentum traders or dumb retail money. They admittedly have no idea what they are doing and are paying a premium for a very aggressive future outlook.

When I refer to ‘dumb money, ‘I’m not implying that these investors are unintelligent. It’s a term used to describe those who enter the market without a clear understanding of the investment they’re making, much like a dog chasing a car.

Here is a question from Linda in Illinois on a recent episode of Mad Money with Jim Cramer:

“I’m a retired postal employee who worked for 45 years. I have no financial investment knowledge. I wanted to know how to buy stocks, and I wanted to ask you if I should try to invest my Thrift Savings Plan (TSP) money in S&P Index Funds, or Magnificant 7, or Nvidia or all Nvidia.”

Or these types of posts on Reddit:

Too late…?
byu/Emers702 inNvidiaStock

Think about the person in your family or at work who exhibits terrible financial acumen. The last person in the world you would want to take financial advice from.

The people considering buying Nvidia stock may have just learned about the company this year. They still may not even know what they do. If you’ve never heard of the company before last year, what happens if the stock craters? History shows people will justify their fears of a recession or market crash by selling at a deep discount and retreating into cash or gold.

This is perfectly normal animal behavior. But you are neither a dog nor a cat!

Again, Nvidia is a fantastic company—a best-in-breed company. But every company has a numerical valuation. With a straight face, can you say out loud that Nvidia will be a $10 trillion company by 2030? If you chase high growth, you typically pay a premium price for it and will likely underperform the market in the long run.

The risk-reward profile of buying Nvidia today significantly differs from a year ago. This may sound hard to believe, but shares are less valuable today because the valuation is far more uncertain than last year.

How many companies have gone from $3 trillion to $8-10 Trillion? Answer: None. Saying this happens with a level of certainty or confidence seems misplaced. It also ignores the risk of things going wrong. We are in uncharted waters with no precedent.

I’m actually coaching 8/9 year olds. Hoping to move up to middle school in the next 3-5 years.
— JJ Redick (@jj_redick) April 12, 2023

Recently, the Lakers hired former player and current podcaster/ESPN analyst JJ Redick as their new head coach. Redick is the same age as LeBron James. He also has no coaching experience beyond youth basketball. Yes, you have read that correctly—a professional basketball team has hired a coach who has not even coached middle schoolers!

There is nothing wrong with being optimistic about Redick as a coach, but how can anyone be confident that he will succeed when he has never done it before? Of course, Redick could be the next Pat Riley or Phil Jackson; it could happen, just like Nvidia can continue skyrocketing. Valuation is an imprecise art because the future is unpredictable. But can you say with confidence this is probable or more possible?

Let me summarize my gameplan:

Am I saying to go all-in cash or to sell out of everything tomorrow?

No.

There is no need to think so dramatically or immaturely.

Betting against Nvidia is extremely risky.

Putting fresh money into Nvidia is risky because investing is more than just about data points and figures. Investing has far more intangibles, making it both an art and a science.

The safe time to buy Nvidia was the second half of 2022 when the US government banned them from selling chips to China and Russia.

I will ride Nvidia long-term, but the growth path is not guaranteed or linear. Past performance is no guarantee of future results.

Jennifer Lopez’s It’s My Party tour grossed $54.5 million with 31 shows in 2019. She recently canceled her tour. The same is true for the Black Keys, while other stars like Pink and Justin Timberlake (pre-DWI) have canceled some tour dates.

Meanwhile, Olivia Rodrigo’s “Guts” tour tickets go for above $570 on the resale market. In 2019, Rodrigo was a relatively unknown 15-year-old.

There is nuance and context to life and investing.

As a long-term investor in Nvidia, I am strategically preparing my portfolio by gradually increasing my cash holdings during periods of strength. This approach allows me to prepare for potential market downturns while benefiting from the company’s growth.

Nvidia is undoubtedly a great company, but why pay premium prices for future assumptions? I am building my cash position not out of fear but of a rational understanding that market fluctuations are normal. This way, I am prepared to take advantage of more appealing risk-reward profiles in the future.

It’s a win-win situation. Hold most of your holdings and reap the reward if the companies perform well. Trim your position in small incremental amounts to build cash. If bad things happen in the market, you at least have more cash to take advantage of a more appealing risk-reward profile in either a cheaper Nvidia stock or another company with a better runway for growth.

The law of big numbers says Nvidia will not hit $10 trillion by 2030. We have never seen a $3 Trillion company triple in 5 years. I am a contrarian, but even that sounds like a stretch. There are compelling companies that can go from $1-10 billion to $10-$100 billion, which is more plausible and we have witnessed several times.

There is nothing wrong with using nuance and rationality in investing. Take some money off the table, even just a tiny amount.

That’s how you, as an investor, need to think. Buy stocks when the valuation becomes desirable. To buy stocks when they are desirable, you need cash on hand, which is best built during days like today. What better time to raise money when your initial investment has increased 10x or more?

Preparing for the future by slowly building a cash position is sound investing advice because the market will eventually experience an inevitable downturn, and prices will fall. When risk falls, that would be a more appropriate time to pounce (use that animal instinct) and buy more aggressively.

Great investing requires a solid strategy and not just emulating pure emotional instinct. Don’t be the dog chasing a car.

Voting for Elon to Save Tesla’s Soul

Why Tesla Shareholders should emphatically vote to approve Musk’s $56 Billion pay package

Musk’s compensation isn’t just about dollars; it’s about shaping Tesla’s destiny and soul. As shareholders, we are not just passive observers but active participants in this journey. Our votes on his pay package are a direct reflection of our belief in his vision and our commitment to Tesla’s future.

Under Musk’s guidance, Tesla’s stock price has skyrocketed, defying recent market turbulence. This dramatic rise starkly contrasts the stock’s value in 2018, which was a mere $21. Long-term shareholders have reaped substantial financial gains from this growth, a clear testament to Musk’s undeniable influence. This is not a personal viewpoint but an impartial, nonpartisan, indisputable reality.

Musk’s strategic decision-making has been a driving force behind Tesla’s success. Against all odds, he has led the charge in electric vehicle and clean energy innovation, reshaping entire industries. His ongoing leadership is not just important; it’s crucial for maintaining Tesla’s competitive edge and ensuring a prosperous future for the company. The potential loss of his leadership should inspire every shareholder to vote in favor of his compensation package.

Tesla’s long-term vision hinges on visionary guidance. Voting on compensation reflects shareholders’ trust in Musk’s ability to steer the company toward its goals. Elon’s compensation package is entirely contingent on achieving ambitious targets. If Tesla fails to meet specific triggers, Musk receives no compensation. This ensures that his pay is directly linked to the company’s success, aligning his interests with the shareholders. This alignment of interests should foster trust and confidence in every shareholder.

Tesla shareholders should ask themselves why they invested in the company in the first place. How many cars they sell this quarter or next quarter is less important than how they are positioning themselves for a Robotaxi world. This is an AI and Robotics company. Shareholders who dislike Musk or want to invest in a typical car company that achieves predictable quarterly numbers can choose from a bevy of other publicly traded companies.

Actual long-term Tesla shareholders don’t see Tesla as a car company; they see it as a venture with a start-up mindset into sustainable energy, AI, and software development. At heart, the vision is greater than just manufacturing vehicles. There is a clear line in the sand. Do you want Tesla to attempt to achieve moonshot or be a mediocre car company run by a Wall Street figurehead chasing predictable quarterly numbers?

If you vote no, you clearly communicate that you do not want Elon running Tesla. It’s a big middle finger to spite someone when the sentiment and stock price are low. Accelerate the transition to sustainable energy, revolutionize transportation, and produce humanoid robots at scale vs. grabbing low-hanging fruit and achieving goals with lower-moderate upside?

The rhetoric being spewed by pundits is biased, carrying a political agenda. Elon Musk’s loudest and most vocal critics are likely not Tesla shareholders, meaning they have no skin in the game. Think about it. Why would you “invest” in a company with a CEO you find deplorable? Does that make sense?

A story about business and technology has been hijacked by partisan fundamentalists. This rabid audience is tribal and less open to listening to opposing views. Elon Musk has been tagged as a villain that commentators will continue to deride. They have used the recent downturn in the stock as ammunition to defend their ideology.

Attacking Elon Musk has become a proxy for attacking President Trump. It’s that simple. These pundits are not your friends and are far from advocates of unbiased investment advice. Tesla stock could 100x and produce more than 200 million all-electric cars in a year; Elon Musk is still a con man to them, and the company is still a bad investment. Facts, data, and performance don’t change a fundamentalist’s opinion. It also won’t get them to admit they are wrong. The goal is to see Elon and Tesla fail spectacularly. Ask yourself if their interests align with yours as a shareholder.

I have voted yes because Elon’s pay compensation is necessary and mission-critical to Tesla’s future growth. Not voting for this package could potentially have catastrophic consequences. Losing his leadership would be a setback for Tesla and the future of our society as a whole. Musk is a man on a mission, and we as a society are in debt for his projects, which are critical to improving humanity through Tesla, SpaceX, Neuralink, The Boring Company, X, and xAI.

Elon Musk has revolutionized the electric car industry and taken on unimaginable financial and reputational risks. His sacrifices and suffering paved the way for Tesla’s success, allowing shareholders to thrive. This pay package is a testament to his past performance and a powerful incentive for future success. I voted yes because it keeps the trailblazer in place and re-positions Tesla into propelled growth for the next decade.