Dimitry Nakhla | Babylon Capital®
Microsoft & Amazon — Price vs Operating Cash Flow 💵

$MSFT currently trades at a ~28% discount to its operating cash flow trend.

$AMZN trades at a ~29% discount to its operating cash flow trend.

When stock price diverges from cash generation, it’s worth taking a closer look. https://t.co/nwRG8sbrJw
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God of Prompt
Happy valentine’s day!
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The Transcript
$SPG Simon Property Group CEO: "Hopefully, AI will solve it for us, so we don’t have to negotiate. It will just say: ‘Here is the rent that the tenant and landlord should agree on.’”" https://t.co/7JzKwDpFC0
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Brady Long
RT @thisguyknowsai: R.I.P basic RAG ☠️

Graph-enhanced retrieval is the new king.

OpenAI, Anthropic, and Microsoft engineers don't build RAG systems like everyone else.

They build knowledge graphs first.

Here are 7 ways to use graph RAG instead of vector search: https://t.co/HdEjy6RslX
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God of Prompt
RT @godofprompt: I should charge $99 for this.

But I'm giving away our Claude Mastery Guide for free.
We just updated it with a full Claude Skills section, the feature most people still don't know exists.

Inside:
→ 30 prompt engineering principles
→ 10+ mega-prompts ready to copy
→ Mini-course from beginner to advanced
→ How to build Skills that make Claude remember your workflows forever
→ Glossary + strategic use cases

This turns Claude from a chatbot into your actual work system.

Comment "Claude" and I'll DM it to you.
(Must be following me to receive it)
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Dimitry Nakhla | Babylon Capital®
Bill Ackman on Psychology of Investing 🧠

“You have to get excited when things get cheaper and get concerned when things get more expensive… Stocks can trade at any price in the short term. If you know what a business is worth and understand it extremely well, volatility bothers you much less…

It’s a combination of being personally secure and knowing what you own. Over time, you build calluses… I’m a pretty emotional person — but not in investing.”

𝐓𝐡𝐞 𝐥𝐞𝐬𝐬𝐨𝐧: 𝘛𝘦𝘮𝘱𝘦𝘳𝘢𝘮𝘦𝘯𝘵 𝘤𝘰𝘶𝘱𝘭𝘦𝘥 𝘸𝘪𝘵𝘩 𝘢 𝘥𝘦𝘦𝘱 𝘶𝘯𝘥𝘦𝘳𝘴𝘵𝘢𝘯𝘥𝘪𝘯𝘨 𝘰𝘧 𝘵𝘩𝘦 𝘣𝘶𝘴𝘪𝘯𝘦𝘴𝘴𝘦𝘴 𝘺𝘰𝘶 𝘪𝘯𝘷𝘦𝘴𝘵 𝘪𝘯 𝘪𝘴 𝘢 𝘤𝘰𝘮𝘱𝘦𝘵𝘪𝘵𝘪𝘷𝘦 𝘢𝘥𝘷𝘢𝘯𝘵𝘢𝘨𝘦.
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1️⃣ 𝐏𝐨𝐬𝐢𝐭𝐢𝐨𝐧 𝐬𝐢𝐳𝐢𝐧𝐠 𝐚𝐧𝐝 𝐬𝐮𝐫𝐯𝐢𝐯𝐚𝐥 𝐩𝐬𝐲𝐜𝐡𝐨𝐥𝐨𝐠𝐲

Large drawdowns don’t just test portfolios — they test 𝘣𝘪𝘰𝘭𝘰𝘨𝘺.

Sharp declines can trigger the same fight-or-flight response governed by the 𝘢𝘮𝘺𝘨𝘥𝘢𝘭𝘢.

When that switch flips, decision-making shifts from logic → survival.

𝐀𝐜𝐤𝐦𝐚𝐧’𝐬 𝐢𝐧𝐬𝐢𝐠𝐡𝐭: 𝘐𝘯𝘷𝘦𝘴𝘵 𝘢𝘮𝘰𝘶𝘯𝘵𝘴 𝘵𝘩𝘢𝘵 𝘢𝘭𝘭𝘰𝘸 𝘺𝘰𝘶 𝘵𝘰 𝘳𝘦𝘮𝘢𝘪𝘯 𝘱𝘴𝘺𝘤𝘩𝘰𝘭𝘰𝘨𝘪𝘤𝘢𝘭𝘭𝘺 𝘢𝘯𝘥 𝘧𝘪𝘯𝘢𝘯𝘤𝘪𝘢𝘭𝘭𝘺 𝘤𝘰𝘮𝘧𝘰𝘳𝘵𝘢𝘣𝘭𝘦. 𝘞𝘩𝘦𝘯 𝘴𝘶𝘳𝘷𝘪𝘷𝘢𝘭 𝘪𝘯𝘴𝘵𝘪𝘯𝘤𝘵𝘴 𝘢𝘳𝘦𝘯’𝘵 𝘢𝘤𝘵𝘪𝘷𝘢𝘵𝘦𝘥, 𝘳𝘢𝘵𝘪𝘰𝘯𝘢𝘭𝘪𝘵𝘺 𝘴𝘶𝘳𝘷𝘪𝘷𝘦𝘴 𝘷𝘰𝘭𝘢𝘵𝘪𝘭𝘪𝘵𝘺.
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2️⃣ 𝐂𝐨𝐧𝐯𝐢𝐜𝐭𝐢𝐨𝐧 𝐜𝐨𝐦𝐞𝐬 𝐟𝐫𝐨𝐦 𝐮𝐧𝐝𝐞𝐫𝐬𝐭𝐚𝐧𝐝𝐢𝐧𝐠

Volatility feels very different when you deeply understand:

What the business is worth

The fundamental drivers of value

The durability of its moat

𝘞𝘩𝘦𝘯 𝘱𝘳𝘪𝘤𝘦 𝘧𝘢𝘭𝘭𝘴 𝘣𝘶𝘵 𝘪𝘯𝘵𝘳𝘪𝘯𝘴𝘪𝘤 𝘷𝘢𝘭𝘶𝘦 𝘳𝘦𝘮𝘢𝘪𝘯𝘴 𝘪𝘯𝘵𝘢𝘤𝘵, 𝘥𝘪𝘴𝘤𝘰𝘮𝘧𝘰𝘳𝘵 𝘤𝘢𝘯 𝘵𝘳𝘢𝘯𝘴𝘧𝘰𝘳𝘮 𝘪𝘯𝘵𝘰 𝘰𝘱𝘱𝘰𝘳𝘵𝘶𝘯𝘪𝘵𝘺. 𝘐𝘧 𝘺𝘰𝘶 𝘬𝘯𝘰𝘸 𝘸𝘩𝘢𝘵 𝘺𝘰𝘶 𝘰𝘸𝘯, 𝘥𝘦𝘤𝘭𝘪𝘯𝘦𝘴 𝘣𝘰𝘵𝘩𝘦𝘳 𝘺𝘰𝘶 𝘭𝘦𝘴𝘴. 𝘖𝘧𝘵𝘦𝘯, 𝘵𝘩𝘦𝘺 𝘣𝘦𝘤𝘰𝘮𝘦 𝘮𝘰𝘮𝘦𝘯𝘵𝘴 𝘰𝘧 𝘦𝘹𝘤𝘪𝘵𝘦𝘮𝘦𝘯𝘵 — 𝘵𝘩𝘦 𝘤𝘩𝘢𝘯𝘤𝘦 𝘵𝘰 𝘢𝘤𝘤𝘶𝘮𝘶𝘭𝘢𝘵𝘦 𝘮𝘰𝘳𝘦 𝘢𝘵 𝘣𝘦𝘵𝘵𝘦𝘳 𝘱𝘳𝘪𝘤𝘦𝘴.
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3️⃣ 𝐊𝐧𝐨𝐰 𝐲𝐨𝐮𝐫𝐬𝐞𝐥𝐟

Ackman openly acknowledges being emotional. That honesty is critical.

“𝘛𝘩𝘦 𝘧𝘪𝘳𝘴𝘵 𝘱𝘳𝘪𝘯𝘤𝘪𝘱𝘭𝘦 𝘪𝘴 𝘵𝘩𝘢𝘵 𝘺𝘰𝘶 𝘮𝘶𝘴𝘵 𝘯𝘰𝘵 𝘧𝘰𝘰𝘭 𝘺𝘰𝘶𝘳𝘴𝘦𝘭𝘧 — 𝘢𝘯𝘥 𝘺𝘰𝘶 𝘢𝘳𝘦 𝘵𝘩𝘦 𝘦𝘢𝘴𝘪𝘦𝘴𝘵 𝘱𝘦𝘳𝘴𝘰𝘯 𝘵𝘰 𝘧𝘰𝘰𝘭.” — Richard Feynman

We’re all human.

𝐅𝐞𝐞𝐥𝐢𝐧𝐠 𝐞𝐦𝐨𝐭𝐢𝐨𝐧 𝐢𝐬 𝙣𝙤𝙧𝙢𝙖𝙡.

𝐀𝐜𝐭𝐢𝐧𝐠 𝐢𝐦𝐩𝐮𝐥𝐬𝐢𝐯𝐞𝐥𝐲 𝐢𝐬 𝙤𝙥𝙩𝙞𝙤𝙣𝙖𝙡.

Great investors build systems:

Preset rules

Allocation frameworks

Behavioral guardrails

Over time, experience itself becomes conditioning.

Just as @davidgoggins speaks about 𝙘𝙖𝙡𝙡𝙤𝙪𝙨𝙞𝙣𝙜 𝙩𝙝𝙚 𝙢𝙞𝙣𝙙 𝙩𝙝𝙧𝙤𝙪𝙜𝙝 𝙧𝙚𝙥𝙚𝙖𝙩𝙚𝙙 𝙨𝙩𝙧𝙚𝙨𝙨, 𝙞𝙣𝙫𝙚𝙨𝙩𝙤𝙧𝙨 𝙗𝙪𝙞𝙡𝙙 𝙥𝙨𝙮𝙘𝙝𝙤𝙡𝙤𝙜𝙞𝙘𝙖𝙡 𝙧𝙚𝙨𝙞𝙡𝙞𝙚𝙣𝙘𝙚 𝙩𝙝𝙧𝙤𝙪𝙜𝙝 𝙧𝙚𝙥𝙚𝙖𝙩𝙚𝙙 𝙚𝙭𝙥𝙤𝙨𝙪𝙧𝙚 𝙩𝙤 𝙫𝙤𝙡𝙖𝙩𝙞𝙡𝙞𝙩𝙮.

You develop “mental calluses.”

𝙑𝙤𝙡𝙖𝙩𝙞𝙡𝙞𝙩𝙮 𝙨𝙩𝙤𝙥𝙨 𝙛𝙚𝙚𝙡𝙞𝙣𝙜 𝙡𝙞𝙠𝙚 𝙙𝙖𝙣𝙜𝙚𝙧 — 𝙖𝙣𝙙 𝙨𝙩𝙖𝙧𝙩𝙨 𝙛𝙚𝙚𝙡𝙞𝙣𝙜 𝙡𝙞𝙠𝙚 𝙥𝙖𝙧𝙩 𝙤𝙛 𝙩𝙝𝙚 𝙥𝙧𝙤𝙘𝙚𝙨𝙨.
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Video: Lex Fridman Poscast (02/20/2024) @BillAckman
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The Transcript
$AMZN AWS CEO on worries around AI agents:

"We had examples internally where somebody was writing some code, and they asked the agent to go do something, and the agent was just about to go, like, delete some infrastructure because they thought that was the fastest way to do i" https://t.co/a7Tfqbe4Mz
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The Few Bets That Matter
RT @WealthyReadings: In hindsight, $NBIS quarter’s highlight comes from its CapEx. Not just CapEx, but how it is financed.

We’re talking about a ~$23B company planning ~$18B CapEx while publicly stating they expect to finance 60% organically via FCF, cash & commitments.

They also have clients financially committing before delivery to enable buildouts; a strong proof of trust especially when those are $META and $MSFT.

Last but not least, the remaining 40% could be financed through equity-backed debt, one of the cheapest funding sources - dilution being even cheaper but paid in later.

I'd remain cautious on the sector and wouldn’t expect $NBIS to outperform if the leaders don’t but the company has a very impressive financing roadmap, healthier than many hyperscalers at this stage.

This has always been a core part of the bull case.

But remaining that healthy through end of 2026 is pretty impressive. The market probably loves this, although I still believe there are other valid concerns short term.

Still, getting out ahead CapEx wise is impressive.

Few $NBIS notes after this quarter.
I'll be the bear, once more.

I continue to believe the market will punish the stock - or not reward it as much as many expect.

Not because the company isn’t excellent, but because it did not reward $GOOG, so why would it reward $NBIS for the same behavior?

Fundamentally, everyone will be bullish. Demand is through the roof, compute was sold out, management is planning to build more sites, etc...

Everything FinX wants to see.

From a market perspective, Q4 CapEx slowed down, guidance talks about ~20% increase of contracted power for FY26 without news on connected power, except for the upgrade from 7 sites to 16 sites.

This means FY26 CapEx will accelerate - just like for everyone else, and won't slow down FY27 as contracted power continues to climb.

More spending. Which was punished across all hyperscalers.

Also note that ARR guidance wasn’t increased, meaning no beat expected hence nothing above expectations and no buildouts closing faster than expected.

Some will say "why would you want more? It doesn't matter, they are executing at their pace"

I disagree. Acceleration is everything, otherwise you'll miss on expectations just like they did.

That revenue miss is due to real-world constraints, as I’ve shared yesterday and for months: you cannot build faster than physics and logistics allow you to.

The issue is that growth factually slows/doesn't accelerate. Growth stocks work on acceleration not stable growth.

The why doesn’t matter, even if you’re supply constrained.

Growth slows, CapEx increases, cash generation decreases, and there are no certainties that demand won’t be fulfilled by other hyperscalers by the time infrastructure is built.

Like many of you, I believe there will be demand and everything will be fine. But today, you cannot know. You can bet on it, but you cannot know.

That is the issue. And that is why the market might react like it did for $GOOG.

I continue to believe the company is excellent and its future is bright. And that the stock won’t be rewarded as much as many expect in the short term.

I’d love to be wrong. - The Few Bets That Matter
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The Few Bets That Matter
RT @WealthyReadings: Last month I shared an article about FinX darlings I wouldn't buy & why. Fast forward to today.

$NFLX -10%
$ADBE -16%
$DUOL -26%
$PYPL -28%
$UBER -16%
$HIMS -44%

Violent.

I am a big fan of some of those, but it isn't enough to be a buyer.

Investing isn't cheerleading. https://t.co/3CLgBw32Gb

https://t.co/gymKiwJpsu - The Few Bets That Matter
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