From the Desk of an Analyst
My daily journal entries from the past week
What I Worked On/Thought About This Week
I write daily stream-of-consciousness reflections about my work and thoughts, posting them on X (@stockthoughts81) and compiling them here weekly. This helps clarify my thinking and documents my process, while hopefully sparking discussions with others. Sign up to follow along, and feel free to reach out to discuss!
2/9/25
As far as work goes, mostly just planned out the week. Have a couple earnings to go through. Kokusai, SPGI, MKSI. Maybe squeeze in ORCL valuation if time allows. Kokusai expert calls. Call with another CCOI investor. CMI group call.
Idk if putting the dates on these helps or hurts engagement on here. Necessary for the journal itself but maybe not here (Twitter). Feels kind of pointless. May try without this week. Or like sometimes I put “what I worked on today”. Idk. Still figuring it out.
2/10/25
Some good calls today. Recap discussions and other stuff took longer than expected plus one of them unplanned so consolidating notes and an earnings review pushed to tomorrow. Kind of considered not doing polished notes or just using GPT. Think that would be a mistake. Some things are worth taking time on notes. You get more out of it the second time around. My first seat in the industry I split time between direct and manager selection and some of the best calls with managers (e.g. deep dive on a top holding), I would go back and read the notes from the call several times. Picking up little nuances each time. One good call is often worth ten bad ones. And e.g. the expert call notes can be batched with preparing a question list for the next one. And don’t want any action items slipping through the cracks. So I’ll take the time tomorrow. But pushing stuff out can be frustrating. We’ll see if everything I planned still gets done this week.
I need to take more walks/just be outside without my phone. Helps with clear thinking and with stress.
2/11/25
I think when I plan out my week, I ought to only plan to do ~75% of what I think I can at the outset. And when I plan out my day, assume everything will take ~1-1.5x as long as it should. Under-promise and over-deliver is the obvious approach to take with others, but has been somewhat harder to implement with myself. Doing this sort of weekly/daily planning is a good way to ensure I focus on what is most important, but I don’t want it to add unnecessary stress, either. And I think the way to adjust for that is incorporating the needed flexibility upfront rather than after the fact.
I am unsure what to think of Kokusai so far. NAND - Kokusai has a pretty strong position, it seems. Given that’s literally just stacking more layers, probably stays that way? DRAM, unsure. Logic - this is somewhat uncertain from both a single wafer vs batch perspective, as well as in terms of competitive landscape. Heard Tokyo Electron is making some strides here with Batch. There is some element of “rising tide lifts all boats” for Logic as we move to GAA, but remains to be seen how that breaks down between single/batch and Kokusai/Tokyo. Is that rising tide enough to justify the medium-term guide that revenue from Logic will equal rev from memory? TBD. Heard that R&D often favors single wafer when possible because you can move more quickly. But then how does this tie in with “copy exactly”? It doesn’t seem to make sense that just because you use single wafer for R&D because of speed you should use it for prod too, even if Batch could achieve the same technical criteria at higher throughput. Bit confused as to how that works in practice.
MKTX. I still don’t know. Is it really Trumid? I am not so sure about that. I mean - to some extent - it is clear they are gaining share. Strong in new issues. Not sure what % of their ADV is new issue. But I think the risk is that - it used to be a very high percentage, now it is somewhat lower. That gave them a leg into the market and now they expand from there. Not the end of the world to have three players instead of two. But MKTX needs to prove that their innovation is having some impact. I am not exactly sure how to diligence that. I read Tegus calls and don’t understand why the Tegus clients are asking the questions they are and focusing on the things they are. You can talk to an expert/customer - but still - everyone has different preferences, reason for using something, different incentives (e.g. sell-side/dealers/banks probably inclined to not be as bullish as buy-side due to disintermediation risk), different use cases and experiences and familiarity with the entire offering, trading strategies, etc. Who would be the ideal expert to talk to? Who gets the most complete picture of all this and what truly drives the bulk of customer behavior over the long-term? Someone from e.g. Citadel might be good to talk to. Another interesting point - has Portfolio Trading basically just cannibalized a lot of the stuff that was already electronic as people start to trade in baskets? And MKTX hasn’t done good there. How unique is Open Trading? Is it more or less of a differentiating point now vs 5 years ago for MKTX? While MKTX claims to have held price, think TW is taking some, and IDK what Trumid is doing. So as far as this being a GMV*Commission type business, that is an important piece of the equation as well. And block trading - how do all players drive more electronification there? There is just so much to try to wrap your head around here. So many variables. It is a tough one. At the most simple level, it does still feel like it should boil down to being network effect/liquidity pool businesses. And with the complexity/customization of all this, and the value-add from the client perspective, you would think that, given the oligopoly structure, they would have decent pricing power. Is something screwed up about MKTX culture and they are just shooting themselves in the foot? Or is this really just a confluence of competitive and market factors coming together to set them back temporarily?
2/12/25
$MKSI, $SPGI, and the ambiguous value of expert calls with PhDs
MKSI guide was a touch above on rev, a touch below on AEBITDA, but missed by a good amount on EPS. I am not sure what that could be that would be that meaningful to us, but market doesn’t seem to like it. Curious what they will say on the call tomorrow. Also wondering if maybe buyside bogey was higher after LRCX.
SPGI crushed it again. Guiding to 5-7% growth in 2025 but who knows, they said 7-9% organic in 2024 and ended up doing 15%. Some pull forward from 2025 Ratings into 4Q. Market Intel growth rate expected to improve throughout 2025.
Had a Kokusai expert call but had to drop due to audio issues. Kind of frustrating. Evaluating other candidates. AMAT guy seemed like he might have relevant experience on the biz side, but why didn’t he mention potential takeover in any of the screening Qs? Weird. Then two PhDs potentially interesting. One seems a bit closer to ALD than the other. I kind of wonder though - are the PhDs really even the best people to talk to for this? How much of how this plays out is determined by science vs other considerations like throughput, cost, customer relationships, service quality, etc.? Obviously the PhDs bring something that the others cannot in terms of their ability to predict how the science will evolve, but I honestly have no clue how easy or hard it is for them to do that. Are they just shooting in the dark? I wouldn’t know either way.
2/13/25
MKSI seems like an overreaction. Expanding opex a bit sooner than expected, ahead of the recovery. Trying to get ready for demand. Is that a good biz decision? Idk and I wish they gave more color on it. Color on these calls is pretty soft. But I don’t think it’s very material either way. Stock seems attractive. Massive yoy reduction in interest expense. Enables faster deleveraging.
HBI seems maybe overdone but I didn’t look very closely. 7.5x FCF. Part of me is grateful for the team going against me on this one, part of me is just even more interested now. I am not sure how closely we will look at it, though. Varying opinions about biz quality in the room. They are forcing the CEO out by the end of 2025. Not sure why. Doesn’t seem like it was his fault?
MKTX active clients being down is weird. That seems like a concerning metric. The more bullish view - TW now caught up on IG, maybe a little more share gain to go in HY. Trumid will be the third player, already has a good chunk of the market as well. But probably some room to go there, too. Maybe we see more stable competitive dynamics going forward, though I am not sure we are quite there yet. At some point, things settle into place and I think MKTX will still be a big player.
Interesting that CPAY Corp Pmts is going into Enterprise. Why didn’t they do this before? I guess they compete mostly with banks now? Always said the middle market was underserved by banks, which created the opportunity. Doesn’t apply here, I guess.
2/14/25
CG hit their 40b fundraising goal and expect to do the same next year. Note they changed the definition, but IR said “flat yoy” comment refers to organic. Don’t like that Global PE is hardly raising any money any more, though. Not sure how much lower the fee is on credit. I mostly feel okay about this one. Probably the worst house in a great neighborhood, but I still think it’s in that neighborhood.
CPAY just “found” an Enterprise client, seems like. Doesn’t look like a shift in strategy or resources. Just - hey, if we can, why not?
MKTX - Trumid had a press release a couple days ago that had Bloomberg at $2.8b ADV. That seems to kind of make them a real player. Not sure how this number has shifted over time? TW definitely been taking price since 2023. Share gains slowed down ~April of last year. I am still not sure what people think is important here. I read Tegus transcripts and don’t get why people ask what they do. Why is no one on the call asking about active client count declines? Doesn’t make any sense. And no one has the full picture. This is a just a low visibility situation. I don’t think management has a great read of their biz either (or they just aren’t communicating it). Tegus transcripts mostly anecdotal and unhelpful. Someone at eg Citadel potentially interesting to talk to. To the positive- they’ve done really well against TW in Muni. Doing good in EM Debt. Eurobonds.
2/15/25
Working on scheduling less things into a given day. Part of that is learning to say no to things and people. Either to focus on what is most important, or simply to avoid overextending myself. I think I did well with this today. But it can be hard because most of those things I actually do want to say yes to. They aren’t bad. It’s especially difficult when another person is asking me because of the social element.
2/16/25
Just going to riff on this journaling thing today. I like how it’s going but also struggle with finding the right level of transparency. I try my best to be as authentic and vulnerable as I can but there are still some things I cannot write about (whether out of my own fear or more practical reasons). As an example of a practical one - any interpersonal dynamics are essentially off limits given that people who know/work with me follow me here. And yet it’s only natural for that to be a lot of what is on my mind. Reflections on challenges, disagreements, how to work better with people, trying to understand people, assessing my own ability to influence others (a la back half of Pitch the Perfect Investment book), etc. are all things that would come up pretty frequently in a more private journal format.
And then - a lot of what is on my mind may not even pertain to work. But thinking through those things improves my overall clarity, which improves my work. I want to write about things that may be relevant to other people, and that can vary from writing about the market (obviously relevant to others) to writing about a certain nuance of my process or how I structure my day (perhaps less relevant). But where do I draw the line? How much work to include? How much life to include? E.g. one thing that has been on my mind a lot lately is trying to find a new church. Probably not relevant to most people here. But it’s probably worth writing about insofar as it 1) improves my own clarity, and 2) given the slim chance that someone on here will have something to say about it.
I kind of wonder if I could do a private version first and then edit it down for public consumption. That’s a greater investment of time but could be worth a shot. And I don’t really want to be writing with Twitter in mind anyway. I think that kind of misses the point, and detracts value from both me (improved clarity on what matters) and the reader (transparency/authenticity). Or I could keep two separate documents, one meant for public consumption that I do at the end of the work day, and then wait a few hours and do one that is more private towards the end of the day to deal with any lingering thoughts. It would be interesting to see how much the content differs.
But to the extent I can be more authentic and open here in the public version, I think that is something I should strive for. I think that is best for me as it enables connections and improved thinking. And I think it’s best for others in the sense that - it’s not like I’m trying to produce some sort of research service here. That is not where the value is in this.