Digging Deeper

David Rosen’s (Rubric Capital) core setup: with volume flowing to quants, macro funds, and pods that all need momentum, a falling stock has “literally no buyers” — “I can go out and be 50% of the volume, and the stock will still go down 10%.” His pick: Viatris (VTRS) at 7x current / 6x forward earnings with 100% cash conversion, “more than a double the next 12 months” on pipeline readouts in 6-9 months — and the derivative trade, Idorsia (IDIA SW), a potential 10-bagger from CHF 4 to 42 if QUVIVIQ descheduling, the wakefulness label, and the ADHD/autism pediatric data all hit. Rubric bought 10% of the company in three weeks.

Andrew Ballou’s long is Carvana: biggest and most profitable player in used cars yet only 1% share of a $1T, 40,000-player market — “incredibly rare to find in a single company.” Word-of-mouth referrals on a 7-year purchase cycle mean 2026 revenue was seeded in 2021-23, making 30%+ growth unusually projectable; at ~20x pre-tax next-year free cash flow, “I don’t know if it’s a 10-bagger in 2 years, but it could be in 5 or 10.”

Eduardo Marques (Pretensul Partners): with ~23% of the S&P now semis and optical, “it’s hard for you not to treat the AI opportunity as a cyclical” — so he’s mainlining “the crack cocaine of Korean value investing”: SK Square as SK Hynix at a 47% discount, and Samsung Life as the Lee family’s stake in Samsung Electronics at 0.48x book and ~4x earnings. Catalysts: foreign inflows reversing a decade of Korean retail buying Mag7, the Value Up program mirroring Japan, and Interactive Brokers opening Korea to US retail just last month.

John Lennon’s (Pleasant Lake) contrarian long is Reddit, down ~50% and mispriced as an AI loser: engagement still growing (24B→25B posts/comments), Google/OpenAI licensing deals repricing “at like 5 or 6x” in the back half, and the Anthropic lawsuit “either great for Reddit or amazing for Reddit.” At 14x his next-year number (~10x 2028) with Meta’s ~70 RPU versus Reddit’s low 20s, he sees a double-to-triple if it’s rebasketed as an AI winner.

The panel’s sharpest short thesis, from John Lennon: the best shorts are now high-quality compounders facing “service-level deflation” invisible in near-term earnings — starting with Australian classifieds firm REA, whose push-price-5%-forever model breaks once agentic AI interjects in the purchase. Already, “if you run a search today in Manhattan for a three-bedroom apartment… on OpenAI, the results are good enough” and listings come direct from Compass, not Zillow.

The inverted AI-winner call: “The true AI winner will be a mediocre business that will just be able to expand a low EBITDA margin by two percentage points.” John’s math — 50% margins going to 52% is +4%, but 50bps going to 2.5% is +400% — is driving Pleasant Lake’s public-to-private deals in “ostensible shitco retailers” at “20 to 50 cent dollars.”

The moderator’s market-structure observation doubles as an opportunity map: after the Iran-war oil spike, consumer companies beat and guided well and “none of them went up” — everything non-AI is a source of funds, leaving a de-risked universe where significant capital can be deployed.

🔗 Original source & video: Digging Deeper: Conversations in Fundamental Investing