Farewell to my Value Edge moniker. I have decided to rebrand, something I’ve thought of doing for a while. I’ll still write under “the value edge” on seeking alpha, but will explain the purpose and future direction of my account here on X. It’s long been my dream, presumably like many of you, to run my own investment operation as my full time job. While I don’t yet have the capital required to do that, I want to start taking definitive steps to make that dream a reality. Step 1 is a rebrand to the name I ultimately will use, which is Entropy Capital. Why Entropy? Entropy is the phenomenon that all matter tends towards randomness. It’s a constant reminder that markets are far too complex for us to predict with 100% accuracy. There is always some seemingly random variable that can blow a hole in your thesis. You must always remain vigilant, and your stocks must always earn the right to be owned by it. The concept of entropy ties quite nicely with my fascination of nonlinear dynamics. The concept that small changes in the starting state of function can yield drastically different outputs. Beating the market is a pursuit for nonlinearity. Every day upon market open out portfolio has a starting state for that day. You control what that state is. Over time, finding the optimal state for your portfolio (what stocks you own) is the only variable that matters. My content moving forward will remain primarily focused on my portfolio as it always has. Eventually I’ll monetize my X and Substack, but I have no plans to do that in the foreseeable future. With that, I’m excited to continue along on this journey with you! Let’s get richer together.

Documenting the headwinds I now see for AI. It won't seem like it, but I love AI and am long-term positive. But when "math doesn't math" I take note. 1. The core thesis for foundation model lab investment has been high upfront investment made worthwhile by significant long-term profits. 2. These are capital intensive businesses and the compute commitments are very high relative to revenue and require strong growth over long time periods. The "leverage" (commitments versus revenue) is extremely high. 3. The fundamentals are not as positive as they previously were: • Input costs are higher (commodities, chips, power) • Interest rates are higher • Competition is more intense • Scaling Laws are now problematic: exponential costs/power cannot continue 4. Forecasting compute spend is challenging and high risk due to (a) revenue uncertainty and (b) algorithm uncertainty 5. Revenue growth appears to be slowing. The technology is valuable, but ROI is proving to be more expensive and take longer than anticipated. 6. The future is likely "different models for different use cases" with the lower end of the market being highly competitive. 7. Core use cases such as agentic software engineering are likely to need approaches beyond next-token prediction. They are Σ₂ᴾ complexity problems requiring multi-objective optimization and likely a combination of Transformers and other methods. 8. Current forecasts in memory makers are built largely on quadratic attention. That will not persist: we are already seeing work from DeepSeek, Minimax and Nvidia that can cut RAM needs by 80% or more. 9. This means semiconductor valuations are substantially overinflated and will go through the traditional glut versus shortage cycle. 10. For foundation model providers: lower costs with competitive differentiation is good. However, lower costs with a lack of differentiation would mean lower revenues. This makes it harder to (a) service commitments and (b) pay back investors. 11. Leverage is substantially higher than in previous cycles, evidenced by leveraged ETFs, call option activity and margin loans. Korea is particularly susceptible. 12. 0DTE options create a profile that has stronger parallels to portfolio insurance and 1987 than any other point I can remember. 13. The combination of exponential increases in call activity coupled with the ties of semiconductors to structured products means there is a non-trivial systemic risk to the financial system. 14. Implied earnings growth rates are inconsistent with other periods in history. 15. Macroeconomically we cannot and should not fund exponential cost increases. History has shown us repeatedly that there are better ways (see Quick Sort and Simplex). 16. Significant supply is hitting the market via IPOs. –– Taken together: costs and competition are increasing while revenue growth is likely slowing. Valuations are fragile and prone to technology disruptions that are already here. Systemic financial market risk is extremely high.

Buffett didn’t do anything, actually!

The longer the war drags the more amplified the ripple effects will become Oil production doesn’t turn back on overnight and the US is now stuck in a strategic rock and hard place. I am becoming moderately more bearish and that feeling is increasing at a rapid rate as this drags

I was really early but really not wrong on the silicon photonics opportunity

Few

The great amorality of markets Great post fwiw

He also doesn’t understand how math works apparently And this guy has a following? Inordinate amounts of wealth to be destroyed my this type of content Literally just buy bitcoin and chill. Stop trying to amplify returns with synthetic structures. You will go broke

Friendly reminder banking has existed basically since the birth of farming and widespread settlement Through both hard and soft money regimes Neither blockchain nor Bitcoin destroy banking, they just disrupt & revolutionize it But banking IS NOT hoarding hard money & creating synthetic yield atop that horde $MSTR is decidedly not a bitcoin bank & saylor branding it as such is folly & a misunderstanding of millennia of financial history

This is so beyond retarded that I almost think he’s joking but he is indeed serious MSTR has far higher likelihood to implode & cause the next major Bitcoin bear market than it has of returning 20x in 10 years Bitcoin itself will yield far better returns than MSTR commons

Probably a good call to buy $BTC dips when they emerge here because volatility goes both ways

yes. Banking and trading should be moved fully to the blockchain within 10 years Banking itself is undergoing two foundational shifts - 1) AI disruption, 2) blockchain disruption Note that bitcoin itself doesn’t disrupt banking but blockchain technology. Banks have existed in some capacity since the dawn of civilization when currency was first created. Through millennia of hard money and soft money regimes. Banking is currency agnostic - Bitcoiners that tell you otherwise are coping

Geminiii has completely replaced ChatGPT on my day to day

Mr financelot doesn’t know about step up in basis (actual tax avoidance strategy for heirs) just wants clicks Also a $6.25b donation that benefits the donor is still a $6.25b donation. Not really a scam!

I would be interested to learn how $XYZ manages cash app marketing / user engagement metrics internally It seems the only marketing strategy is to give money away. And that’s neither good nor bad. It’s just a strategy. But the goal for cash app should be converting its nearly 60m users to *fully engaged* users. What does that mean? It can mean several things. For cash app, this would probably be a combination of one or several of the following: - Cash app card active user (5 transaction monthly) - Afterpay active user ($100 spent per month) - investing active (holds a non-zero $BTC or stock balance) - cash app borrow active user (borrowed money in past month) - direct deposit user You’ll note that none of these are about P2P payments, cash apps perceived “purpose” P2P is the top of funnel acquisition engine. Deepening user relationships requires peeling back a few layers, monitoring engagement metrics, and rewarding highly engaged users as they have the highest revenue multiple. Cash app has a breadth of products/services that is unmatched - now just time to join the big leagues by incentivizing users to rely on cash app as their *primary* financial institution

Complete nonsense argument If they began liquidating bitcoin to cover dividends, bitcoin price would fall, requiring more liquidation, further price falls, more liquidation…. Understand cycles, both virtuous and vicious

If you’re looking to short $XYZ stock I have plenty of shares I’ll happily lend to you

Cash app score - look it up - it’s only a pilot for now but revolutionary product to break from the chains of standard credit agencies Block is breaking the traditional personal finance paradigm before our eyes and Wall Street just ignores it and sells the stock on ST #’s $xyz

$xyz $5b increase to buyback. Quite a nice gift for LT holders. Will get ‘26 and 3 year outlook tomorrow

Hahahaha that’s not what convexity is

So $MSTR is facing its first real selling pressure and his decision is to post an image of him abandoning the ship and escaping by himself in a life raft? 🤣🤣🤣🤣🤣