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Dimitry Nakhla | Babylon Capital®
Bill Ackman was on Fox Business this week saying “very high-quality businesses are showing up at very attractive levels”
He added that Pershing Square is approaching 15% cash & is “finishing due diligence on a company we’ve really wanted to own for years — now available at a bargain price”
Over the last several weeks, I’ve shared that many quality compounders are trading at the lower end of their 3-year valuation ranges and look attractive relative to their growth, durability, & moats
Before going any further I want to be clear: 𝐞𝐯𝐞𝐫𝐲𝐭𝐡𝐢𝐧𝐠 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐩𝐨𝐬𝐭 𝐚𝐛𝐨𝐮𝐭 𝐰𝐡𝐢𝐜𝐡 𝐜𝐨𝐦𝐩𝐚𝐧𝐲 𝐁𝐢𝐥𝐥 𝐜𝐨𝐮𝐥𝐝 𝐛𝐞 𝐜𝐨𝐧𝐬𝐢𝐝𝐞𝐫𝐢𝐧𝐠 𝐢𝐬 𝐩𝐮𝐫𝐞𝐥𝐲 𝐬𝐩𝐞𝐜𝐮𝐥𝐚𝐭𝐢𝐯𝐞
I simply enjoy analyzing great investors and their frameworks, & @BillAckman has been one I’ve respected for years
Now lets guess 🤔
I believe the company is potentially Mastercard $MA & here’s why:
@KoyfinCharts recently shared Bill’s investment principles & $MA checks off every box
𝟏. 𝐊𝐞𝐲 𝐛𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐜𝐡𝐚𝐫𝐚𝐜𝐭𝐞𝐫𝐢𝐬𝐭𝐢𝐜𝐬
✅Simple predictable FCF generative business
• $MA runs a toll-road-like payments network along with value added services & solutions & maintains >50% FCF margins
✅Formiddable barriers to entry
• $MA operates in a duopoly — a new competitor would need global merchant onboarding, bank integrations, regulators’ approval, & brand trust, among other things
✅Limited exposure to extrinsic factors that we cannot control
• $MA revenue is very stable especially over long periods & the company does not lend money, so it has no direct credit or balance-sheet risk
✅Generally low financial leverage levels
• $MA uses modest conservative leverage with strong interest-coverage ratios & stable cash generation
✅Minimal capital markets dependency
• Given its predictable recurring-like FCF, $MA is a self-funded business
✅Typically highly liquid mid & large cap companies
• $MA has a $488B market cap
𝟐. 𝐀𝐭𝐭𝐫𝐚𝐜𝐭𝐢𝐯𝐞 𝐯𝐚𝐥𝐮𝐚𝐭𝐢𝐨𝐧
✅Fair price as is but a substantial discount to optimized value
• $MA trades for 29x (lower end of its 3 year range & a PEG <2.00)
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Bill Ackman was on Fox Business this week saying “very high-quality businesses are showing up at very attractive levels”
He added that Pershing Square is approaching 15% cash & is “finishing due diligence on a company we’ve really wanted to own for years — now available at a bargain price”
Over the last several weeks, I’ve shared that many quality compounders are trading at the lower end of their 3-year valuation ranges and look attractive relative to their growth, durability, & moats
Before going any further I want to be clear: 𝐞𝐯𝐞𝐫𝐲𝐭𝐡𝐢𝐧𝐠 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐩𝐨𝐬𝐭 𝐚𝐛𝐨𝐮𝐭 𝐰𝐡𝐢𝐜𝐡 𝐜𝐨𝐦𝐩𝐚𝐧𝐲 𝐁𝐢𝐥𝐥 𝐜𝐨𝐮𝐥𝐝 𝐛𝐞 𝐜𝐨𝐧𝐬𝐢𝐝𝐞𝐫𝐢𝐧𝐠 𝐢𝐬 𝐩𝐮𝐫𝐞𝐥𝐲 𝐬𝐩𝐞𝐜𝐮𝐥𝐚𝐭𝐢𝐯𝐞
I simply enjoy analyzing great investors and their frameworks, & @BillAckman has been one I’ve respected for years
Now lets guess 🤔
I believe the company is potentially Mastercard $MA & here’s why:
@KoyfinCharts recently shared Bill’s investment principles & $MA checks off every box
𝟏. 𝐊𝐞𝐲 𝐛𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐜𝐡𝐚𝐫𝐚𝐜𝐭𝐞𝐫𝐢𝐬𝐭𝐢𝐜𝐬
✅Simple predictable FCF generative business
• $MA runs a toll-road-like payments network along with value added services & solutions & maintains >50% FCF margins
✅Formiddable barriers to entry
• $MA operates in a duopoly — a new competitor would need global merchant onboarding, bank integrations, regulators’ approval, & brand trust, among other things
✅Limited exposure to extrinsic factors that we cannot control
• $MA revenue is very stable especially over long periods & the company does not lend money, so it has no direct credit or balance-sheet risk
✅Generally low financial leverage levels
• $MA uses modest conservative leverage with strong interest-coverage ratios & stable cash generation
✅Minimal capital markets dependency
• Given its predictable recurring-like FCF, $MA is a self-funded business
✅Typically highly liquid mid & large cap companies
• $MA has a $488B market cap
𝟐. 𝐀𝐭𝐭𝐫𝐚𝐜𝐭𝐢𝐯𝐞 𝐯𝐚𝐥𝐮𝐚𝐭𝐢𝐨𝐧
✅Fair price as is but a substantial discount to optimized value
• $MA trades for 29x (lower end of its 3 year range & a PEG <2.00)
Bill Ackman's core investment principles, which he has engraved and keeps on a tablet on his desk. https://t.co/HxTULNJOVm tweet
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EndGame Macro
The Quiet Turning Point And How America’s Demographics Are About to Reshape the Housing Map
When births fall for 30 years and deaths steadily rise, you eventually hit a point where the population isn’t growing on its own anymore. That doesn’t mean the country is about to shrink overnight,
it just means the old engine of housing demand starts running on fumes.
For decades, America could rely on a constant flow of new households…young adults, new families, bigger generations coming up behind the older ones. That natural tailwind is fading. And once it fades, the whole system gets more sensitive to whatever else is going on with interest rates, immigration, zoning, job opportunities, all of it. The baseline isn’t pushing you upward anymore.
What the U.S. Will Actually Feel
The part people tend to miss is that this plays out unevenly. Japan already lived it. Once their population started turning down, the impact didn’t hit everywhere the same way.
The rural parts hollowed out first…falling prices, rising vacancies, towns struggling to keep services going. Meanwhile places like Tokyo and Osaka stayed tight and expensive because that’s where young people moved for work. Same demographics, totally different realities depending on where you lived.
The U.S. is heading for a similar split.
Not a national crash but a widening gap…
•Places already losing young people (Midwest counties, rural areas, older suburbs) will start feeling the demographic drag sooner. Homes sit longer. Vacancies rise. Local budgets get strained.
•Cities with economic pull like the Austins, Nashvilles, Bostons, D.C.s, Carolinas will act more like Japan’s big metros: still expensive, still competitive, still shaped by job gravity.
And then you layer in Boomers. They hold a massive share of U.S. homes, and their mortality curve picks up in the 2030s. Even a modest uptick in estate driven listings adds steady inventory to markets that already weren’t growing. It’s a drip that never stops.
Why This Matters Long Term
Demographics don’t blow up housing. But they do change the rules.
They make markets more uneven. They make policy and migration matter more. They create towns that slowly empty out and others that stay permanently tight. And they force the U.S. to confront something it hasn’t had to think about seriously in a long time: what happens when growth isn’t guaranteed?
That’s the real story behind this chart.
Not doom. Not collapse. Just a long, subtle shift where the U.S. starts looking a lot more like Japan except in the American version, the winners and losers will be even farther apart.
tweet
The Quiet Turning Point And How America’s Demographics Are About to Reshape the Housing Map
When births fall for 30 years and deaths steadily rise, you eventually hit a point where the population isn’t growing on its own anymore. That doesn’t mean the country is about to shrink overnight,
it just means the old engine of housing demand starts running on fumes.
For decades, America could rely on a constant flow of new households…young adults, new families, bigger generations coming up behind the older ones. That natural tailwind is fading. And once it fades, the whole system gets more sensitive to whatever else is going on with interest rates, immigration, zoning, job opportunities, all of it. The baseline isn’t pushing you upward anymore.
What the U.S. Will Actually Feel
The part people tend to miss is that this plays out unevenly. Japan already lived it. Once their population started turning down, the impact didn’t hit everywhere the same way.
The rural parts hollowed out first…falling prices, rising vacancies, towns struggling to keep services going. Meanwhile places like Tokyo and Osaka stayed tight and expensive because that’s where young people moved for work. Same demographics, totally different realities depending on where you lived.
The U.S. is heading for a similar split.
Not a national crash but a widening gap…
•Places already losing young people (Midwest counties, rural areas, older suburbs) will start feeling the demographic drag sooner. Homes sit longer. Vacancies rise. Local budgets get strained.
•Cities with economic pull like the Austins, Nashvilles, Bostons, D.C.s, Carolinas will act more like Japan’s big metros: still expensive, still competitive, still shaped by job gravity.
And then you layer in Boomers. They hold a massive share of U.S. homes, and their mortality curve picks up in the 2030s. Even a modest uptick in estate driven listings adds steady inventory to markets that already weren’t growing. It’s a drip that never stops.
Why This Matters Long Term
Demographics don’t blow up housing. But they do change the rules.
They make markets more uneven. They make policy and migration matter more. They create towns that slowly empty out and others that stay permanently tight. And they force the U.S. to confront something it hasn’t had to think about seriously in a long time: what happens when growth isn’t guaranteed?
That’s the real story behind this chart.
Not doom. Not collapse. Just a long, subtle shift where the U.S. starts looking a lot more like Japan except in the American version, the winners and losers will be even farther apart.
The U.S. Housing Market is about to get hit by a big demographic shift.
By 2032, there will be more deaths than births in the U.S.
This crossover point will be the continuation of a long-term trend over the last four decades, and ultimately will have the following impacts:
a) structurally lower homebuyer demand, as declining births and family formation lowers the need and urgency for young people to buy houses
b) more inventory, as incrementally more deaths and the aging out of the Baby Boomer generation increases listings (Freddie Mac estimates 9 million homes by 2035).
This will likely have a disinflationary and/or deflationary impact on home prices over the long-term.
Reventure just added Birth/Death Ratio data for every county in the U.S., going back 30 years, under 'Demographic Data'. Sign up to see the demographic trends in your area at https://t.co/Gn64thZUlO. tweet
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Fiscal.ai
Which food delivery business will be larger in 2030?
Current Bookings:
DoorDash: $94 billion, +25% YoY
Uber Eats: $85 billion, +25% YoY
$DASH $UBER https://t.co/WGgg7bCIra
tweet
Which food delivery business will be larger in 2030?
Current Bookings:
DoorDash: $94 billion, +25% YoY
Uber Eats: $85 billion, +25% YoY
$DASH $UBER https://t.co/WGgg7bCIra
tweet
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WealthyReadings
Portfolio Update: what stays, what's missing?
$TMDX – the strongest name in my book. Unnafected by macro, AI, rate-cuts, recession...
$PYPL – More weakness than I expected, would trim for better names.
$BABA & $KWEB – China thesis remains intact. Planning to increase the positions.
$NBIS & $ALAB – Staying steady. Not adding until I see a confirmed local bottom.
$BTC – The king. No explanations needed.
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Portfolio Update: what stays, what's missing?
$TMDX – the strongest name in my book. Unnafected by macro, AI, rate-cuts, recession...
$PYPL – More weakness than I expected, would trim for better names.
$BABA & $KWEB – China thesis remains intact. Planning to increase the positions.
$NBIS & $ALAB – Staying steady. Not adding until I see a confirmed local bottom.
$BTC – The king. No explanations needed.
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WealthyReadings
$MSTR is down 68% from its ATH. Not putting this name on your watchlist is literally saying no to money.
Social media will keep screaming about bankruptcy while not understanding its debt structure. The reality is that:
🔹Trades below 1x NAV
🔹No notes mature until 2028
🔹Conversion price for the nearest debt is $183
The noise will stay loud. But anyone who spends more than 5min studying this name will see it has the potential to outperform $BTC in returns, sooner rather than later.
It isn’t time yet. But again, not putting it on our watchlist is like aying no to money.
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$MSTR is down 68% from its ATH. Not putting this name on your watchlist is literally saying no to money.
Social media will keep screaming about bankruptcy while not understanding its debt structure. The reality is that:
🔹Trades below 1x NAV
🔹No notes mature until 2028
🔹Conversion price for the nearest debt is $183
The noise will stay loud. But anyone who spends more than 5min studying this name will see it has the potential to outperform $BTC in returns, sooner rather than later.
It isn’t time yet. But again, not putting it on our watchlist is like aying no to money.
tweet
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Fiscal.ai
Amazon currently trades at a cheaper multiple than both Walmart and Costco.
Forward EV/EBIT:
$COST 34.6x
$WMT 27.4x
$AMZN 26.8x
Which would you rather own over the next 5 years? https://t.co/i9PdJoOP4W
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Amazon currently trades at a cheaper multiple than both Walmart and Costco.
Forward EV/EBIT:
$COST 34.6x
$WMT 27.4x
$AMZN 26.8x
Which would you rather own over the next 5 years? https://t.co/i9PdJoOP4W
tweet
EndGame Macro
A lot of companies gorged on cheap debt in 2020–2021, built cost structures on stimulus level demand, and then walked straight into a world of 5%+ rates, sticky input costs, and a consumer who’s finally running out of cushion. Now those loans are rolling over at double or triple the old interest cost, while revenue growth is slowing. For big, leveraged firms in cyclical sectors, that math just doesn’t work so you get exactly what we’re seeing which is the highest number of large bankruptcies in 15 years, even before the NBER calls an official recession.
What makes this cycle tricky is the split screen. The index level and a handful of mega caps still look fine, so people assume the system is strong. But underneath, industrials, over expanded consumer names, PE owned roll‑ups, and pandemic winners that never had real pricing power are quietly getting wiped out. This is how late cycle tightening usually shows up…not with one giant explosion at the center, but with a steady drumbeat of failures at the edges telling you financial conditions have already turned recessionary for a big chunk of corporate America
tweet
A lot of companies gorged on cheap debt in 2020–2021, built cost structures on stimulus level demand, and then walked straight into a world of 5%+ rates, sticky input costs, and a consumer who’s finally running out of cushion. Now those loans are rolling over at double or triple the old interest cost, while revenue growth is slowing. For big, leveraged firms in cyclical sectors, that math just doesn’t work so you get exactly what we’re seeing which is the highest number of large bankruptcies in 15 years, even before the NBER calls an official recession.
What makes this cycle tricky is the split screen. The index level and a handful of mega caps still look fine, so people assume the system is strong. But underneath, industrials, over expanded consumer names, PE owned roll‑ups, and pandemic winners that never had real pricing power are quietly getting wiped out. This is how late cycle tightening usually shows up…not with one giant explosion at the center, but with a steady drumbeat of failures at the edges telling you financial conditions have already turned recessionary for a big chunk of corporate America
US BANKRUPTCIES ARE RUNNING AT RECESSION LEVELS
LARGE BANKRUPTCIES AT 655 YTD — MOST IN 15 YEARS
HIGHER THAN FULL YEARS 2020, 2021, 2022, AND 202 tweet
X (formerly Twitter)
First Squawk (@FirstSquawk) on X
US BANKRUPTCIES ARE RUNNING AT RECESSION LEVELS
LARGE BANKRUPTCIES AT 655 YTD — MOST IN 15 YEARS
HIGHER THAN FULL YEARS 2020, 2021, 2022, AND 202
LARGE BANKRUPTCIES AT 655 YTD — MOST IN 15 YEARS
HIGHER THAN FULL YEARS 2020, 2021, 2022, AND 202
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EndGame Macro
Germany’s Factory Engine Is Hitting a Wall
Germany’s manufacturing slump is what happens when the pillars that supported an entire economic model all weaken at the same time. Cheap Russian gas is gone, and the replacement is permanently more expensive, a huge problem for a country built on energy intensive industries like chemicals and metals. Meanwhile global demand for German machinery and autos has softened, trade is getting more fragmented, and China has shifted from being Germany’s biggest customer to a direct competitor in EVs, solar, and industrial equipment. Add in an auto sector struggling to reinvent itself, an aging workforce, heavy bureaucracy, and years of underinvestment in infrastructure and digital capacity, and you get a picture that’s much deeper than a noisy PMI print. Germany hasn’t lost its engineering talent, the world around it changed faster than it did, and the manufacturing numbers are just the scoreboard reflecting that shift.
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Germany’s Factory Engine Is Hitting a Wall
Germany’s manufacturing slump is what happens when the pillars that supported an entire economic model all weaken at the same time. Cheap Russian gas is gone, and the replacement is permanently more expensive, a huge problem for a country built on energy intensive industries like chemicals and metals. Meanwhile global demand for German machinery and autos has softened, trade is getting more fragmented, and China has shifted from being Germany’s biggest customer to a direct competitor in EVs, solar, and industrial equipment. Add in an auto sector struggling to reinvent itself, an aging workforce, heavy bureaucracy, and years of underinvestment in infrastructure and digital capacity, and you get a picture that’s much deeper than a noisy PMI print. Germany hasn’t lost its engineering talent, the world around it changed faster than it did, and the manufacturing numbers are just the scoreboard reflecting that shift.
‼️Germany's manufacturing RECESSION has been absolutely historic:
German Manufacturing PMI fell to 48.4 points in November, the lowest in 6 months.
The German Manufacturing sector has been in CONTRACTION (below 50) for 41 months STRAIGHT, the longest streak in history.
Wild. https://t.co/J73GoIPnmE tweet
AkhenOsiris
$DKNG $FLUT $SRAD $GENI
@DustinGouker:
Sports betting handle hits new highs in a lot of states, online casino sets records, and Kalshi trading volume continues to trend down.
https://t.co/7UWSp5XH5T
tweet
$DKNG $FLUT $SRAD $GENI
@DustinGouker:
Sports betting handle hits new highs in a lot of states, online casino sets records, and Kalshi trading volume continues to trend down.
https://t.co/7UWSp5XH5T
tweet
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EndGame Macro
The 10 Year Is Doing Exactly What a Late Cycle Bond Market Does
What the 10 year is reacting to now is completely different from what it was reacting to back in 2024, and that’s the part people keep missing. When the Fed first started cutting in September 2024, it happened right after the Sahm Rule tripped recession, but policymakers hesitated because the headline payroll numbers still looked fine. The problem is that those numbers were never telling the truth. BLS spent months tinkering with the Birth/Death model, then switched back to the old pre pandemic version in November 2024, the same one that reliably overstates job creation at turning points. Add in the immigration surge that was swelling the labor force and making payrolls look steadier than they really were, and you get a completely distorted picture that gave the Fed just enough cover to pause even as the slowdown was already unfolding underneath.
By the time we got into 2025, that illusion had fully cracked. The February benchmark revision based on QCEW tax records erased 589,000 jobs for the year ending March 2024. And the knockout blow came from the preliminary benchmark revision released on September 9th, 2025 which stripped out another 911,000 jobs for the 12 months ending March 2025, the largest downward revision in U.S. history. Suddenly the resilience the Fed thought it was seeing in late 2024 looks exactly like what it was…statistical noise and demographic distortions masking real weakness.
That’s why the 10 year is behaving the way it is now. Last year, rate cuts looked optional, maybe even premature, so the long end pushed higher. This year, cuts look like the Fed finally admitting where the cycle actually is. QT ends December 1st, layoffs and bankruptcies are running at recession levels, Europe and China are slowing, and the data revisions show the labor market was softer all along. And because the market is now trading growth expectations and not just the Fed’s policy rate, the long end doesn’t fight the Fed anymore; it starts to price the slowdown the Fed missed. Yields drift lower not because everything is fixed, but because the bond market is finally reacting to the economy we actually have, not the one the flawed data pretended we had a year ago.
tweet
The 10 Year Is Doing Exactly What a Late Cycle Bond Market Does
What the 10 year is reacting to now is completely different from what it was reacting to back in 2024, and that’s the part people keep missing. When the Fed first started cutting in September 2024, it happened right after the Sahm Rule tripped recession, but policymakers hesitated because the headline payroll numbers still looked fine. The problem is that those numbers were never telling the truth. BLS spent months tinkering with the Birth/Death model, then switched back to the old pre pandemic version in November 2024, the same one that reliably overstates job creation at turning points. Add in the immigration surge that was swelling the labor force and making payrolls look steadier than they really were, and you get a completely distorted picture that gave the Fed just enough cover to pause even as the slowdown was already unfolding underneath.
By the time we got into 2025, that illusion had fully cracked. The February benchmark revision based on QCEW tax records erased 589,000 jobs for the year ending March 2024. And the knockout blow came from the preliminary benchmark revision released on September 9th, 2025 which stripped out another 911,000 jobs for the 12 months ending March 2025, the largest downward revision in U.S. history. Suddenly the resilience the Fed thought it was seeing in late 2024 looks exactly like what it was…statistical noise and demographic distortions masking real weakness.
That’s why the 10 year is behaving the way it is now. Last year, rate cuts looked optional, maybe even premature, so the long end pushed higher. This year, cuts look like the Fed finally admitting where the cycle actually is. QT ends December 1st, layoffs and bankruptcies are running at recession levels, Europe and China are slowing, and the data revisions show the labor market was softer all along. And because the market is now trading growth expectations and not just the Fed’s policy rate, the long end doesn’t fight the Fed anymore; it starts to price the slowdown the Fed missed. Yields drift lower not because everything is fixed, but because the bond market is finally reacting to the economy we actually have, not the one the flawed data pretended we had a year ago.
Unlike 2024 Sep, when the Fed began cutting rates and the 10y yield rose sharply casting doubt on the decision, this past Sep, when the Fed resumed cutting rates, the 10y move has been muted and edged slightly lower. https://t.co/rx03vZLO6h tweet