I would have expected the market to start discerning between SaaS that is impacted by AI, SaaS that needs to evolve, and SaaS that benefits from AI. Analytical SaaS, Creative SaaS is in category 1, System or Record, Human workflow and Engagement and Productivity are in category 2 and Infrastructure SaaS and Cybersecurity are in 3. This constant paranoid reaction of the market will continue to create buying opportunities for the discerning.

Where this is actually leading For the longest time consulting was seen as the dirtiest of dirty revenue source in software. Yuck. Who wants it. Push it down to other orgs if ppl really need it. Do the bare min, at lowest cost. I think it's about time a lot of software companies re-thought this approach.

The Fed has destroyed the financial system by explicitly monetizing the government, implicitly stepping in to monetize fiscal impropriety via an unlimited repo backstop, and generating extreme and capricious redistributions of wealth to favour asset owners. They’ve engineered a position of fiscal dominance and can’t tighten rates effectively, either. Since they blew out the balance sheet rate hikes on that balance sheet just lead to more monetization. And the 3% of GDP fiscal blowout on rate hikes in 2023 shows that. At that time, the Fed had printed so much money (in excess of both a 15yr fiscal blowout and even the demands of a euphoric bubble in 2021-22), there was a latent $2.5tr in RRP. They did nothing to neutralize or absorb that liquidity and then it automatically seeped out as repo markets tightened, reflating the bubble from 2023 to now. The financial markets now rest on an unprecedented amount of repo lending to NBFIs bc the Fed accommodated both the fiscal supply, and the repo market, and bailed out the sovereign at par with the BTFP. The Fed doesn’t understand the second order consequences of what they do, how the balance sheet works, or the socially disastrous impacts of their policy. They’ve brought the currency to the brink of a monetized dish wars spiral and seem to have no awareness of this if Powell’s comments on gold are anything to go by. They care not practitioners - all the academics there use single-stage models (when the economy is a dynamic non-equalizing cycle), unsullied by contact with reality. And they don’t ever learn from the systematic errors their models produce. To answer your question the FOMC should be replaced by a systematic macro algorithm based on projected potential real GDP growth. Nothing more. No inflation bias, no sovereign or financial backstop. Easy to build. The emotional human involvement here is not necessary and extremely corrosive.

FY 2025 Letter is up It has been more than 4 years since we began! In this letter, we talk about our top holdings and how the portfolio is positioned going forward. whitefalconcap.com/letters

"Why should companies pay for SaaS (HR/CRM/ERP/etc.) when they could just vibe code them?" I get variations of this question or comment with some regularity (granted, it's sometimes just me talking to myself). Here are some biased (but hopefully, well-considered) thoughts: 1) I am a big proponent and user of vibe coding (what I call "agentic coding"). I do it every day, 7 days a week, including Sundays. It's amazing. 2) My company, HubSpot is a software company. We have hundreds of professional engineers -- just about all of them use AI for product development too. They are brilliant and know how to build production-grade products. 3) Even with this powerful army of talent, the number of internal, core SaaS applications that we have replaced with a vibe-coded variant is exactly ZERO. The number of applications we plan to replace is also exactly ZERO. 4) It's not the absence of talent that keeps us from rolling our own SaaS apps, it's the presence of focus. It would be silly to try and replace our HR, team collaboration, expense tracking and 100 other SaaS apps we use when we can just buy them. Just doesn't make sense. 5) That's us -- as a software company at some scale. If you're a non-software company it makes even less sense for you. Doesn't matter how good the AI coding tools get. Let's say you *could* vibe code a replacement for that SaaS app you're using, who's going to maintain it? Who's going to keep up with industry trends? What are you going to do when the 20-something genius that vibe coded it over a weekend leaves the company? Who do you call when there's a major bug? 6) If you're a Fortune 500 company at some scale, perhaps you could pull this off for some discrete use cases and the tradeoffs are worth it. You have an IT/Engineering department that is larger than the population of some countries. You can take on the pain in return for the positives. For the millions of others, my advice is: Spend every calorie possible on creating value for your customers.

RT @LisaSu: Exiting day today! Thrilled to partner with @OpenAI to deploy 6GWs of AMD Instinct GPUs. The world needs more AI compute. To…

Okay let me clear this debate (longer post but needed). As someone who’s worked at market-neutral L/S pods and at a 40-ticker LO fund - I can safely say both are retarded ways to invest and both sides can stfu. The only true (and correct) way to invest is one that champions flexibility and adaptability whereby the PM is free to make directional bets with varying levels of concentration, turnover, net exposure, and leverage. This set up has increasingly become rare, but is the only path for the best investors. Pods and LOs are alike are constructed in a way to obscure the mediocrity and downright incompetence of the vast majority of institutional active managers. What do you do when 90% of people in an industry are shit at their jobs? You create these institutional constraints to convince LPs they need you and excuse underperformance. It’s no surprise passive has taken majority share. L/S pods are retarded because stock prices don’t move on fundamentals over the short term, yet pods are comped on daily P&L and have no ability to have 1-2 year duration for when the fundamentals do matter. Hence a big disconnect between theory and application. You want market neutral? Stick with FX, commodities, or quant. But stop pretending your “deep fundamental research” will consistently work in a portfolio that is a hodgepodge of beta and factor hedges with very high turnover and strict volatility limits. In other words the pod style is literally fugazi and everyone is just praying each day random price movements don’t zero them out. LO mutual funds are equally as retarded on the other end of the spectrum. Pure beta exposure with performance that is consistently below their index. Most of these managers can’t pick winning stocks because they think emulating fundamental analysis 101 gives them the right to generate alpha. You want to outperform via quality? Yeah, get in line next to the other thousand managers. What’s worse - if you want to outperform via quality then you need much higher degree of portfolio concentration and much higher time horizon. Living by annual performance with 40 tickers that seldom change simply won’t cut it.

🎙️ [NEW PODCAST] Compounders, Value Today, and Value Tomorrow with Balkar Sivia, Founder & Portfolio Manager @WhiteFalconCap 🔑 Key takeaways: - Why Balkar runs an unconstrained, opportunistic strategy - The three engines powering White Falcon’s portfolio - Real-world examples of narrative shifts and turnaround opportunities - Lessons on value traps, AI, and evolving as an investor 🎧 Listen: microcapnewsletter.substack.… 📺 Watch now: youtube.com/watch?v=lXMozewL… #Investing #Compounders

Telus revised its offer for Telus International $TIXT from US$3.4 to US$4.5 per share - a 32% bump

Value investing is partially dead bc investors can't think for themselves and believe that applying the same single formula grants them a God given right to outperform for 50 yrs.

Great call! Wag not doing so well!

$NU All this for 16x 2026e E

Prepping for a sale? $LYFT investor.lyft.com/news-and-e…

$EPAM Finally returning to growth! Lots of good color on the call on AI and enterprises doing it themselves.

As everyone marvels at the performance of the U.S. stock market, just remember that in CAD, Aussie Dollar and Yen terms, the S&P 500 is barely up more than 1% for the year; flat against the Kiwi and Sterling; and down 3% in peso terms, down 5% in euro terms and down 6% in Swedish krona terms. Oh, and down 20% in gold terms. I hate to rain on the parade, but I think I just did.  The illusion of a bull market through the lens of an ever depreciating DXY, which just broke below 98 after failing once again at the 50-day trendline.

Q2 Letter is up: whitefalconcap.com/letters

Not good!

Royal Gold $RGLD to acquire Canada's Sandstorm Gold $SAND for $3.5 billion Congrats @WhiteFalconCap and thanks for putting this opportunity on the radar of the SumZero community a couple of years back. reuters.com/legal/transactio…

The Wealth of Everyday I wake up each morning on a Costco memory-foam mattress. Nothing fancy, nothing exclusive—just the same mid-tier slab that comes with free two-day shipping to anyone with an address and a debit card. At 6 a.m. my thermostat clicks to 70 °F, a luxury now enjoyed by the nearly nine in ten U.S. households that enjoy air-conditioning. In that first sleepy moment, the accumulated fruits of my investing career are irrelevant. My comfort is identical to that of a single mom earning the minimum wage who sets her window unit to the same number. I shuffle to the bathroom and twist the handle. Hot water answers. Indoor plumbing is not a perk of privilege; it’s an American birthright secured for about 99.6% of households. My bar of soap is three dollars. My toothbrush came in a six-pack. Our ancestors fought typhus and dysentery; we fight mint-flavored plaque. Breakfast is democratic fuel. The eggs, bacon, and coffee on my plate flow through the same temperature controlled supply chain that feeds families receiving SNAP. Calories do not discriminate. If I shave truffles over my omelet, it changes nothing about the protein that powers my morning—protein the Census Bureau tells us is affordable enough that chronic calorie deprivation is vanishingly rare in the USA. After dishes, I reach for the six-inch slab of silicon that collapses the world into my palm. Even among adults earning under $30k, 84% own a smartphone; the national figure is 91%. Access to the Library of Congress, emergency weather alerts, and live Yankees box scores rides in almost every pocket—wealthy or not. My ride to work is a 2016 Toyota. It blends into traffic governed by the same speed limits and maintained by the same tax dollars that serve school buses and rideshare Priuses. Asphalt egalitarianism: the road does not care who paid more income tax. Inside the office, I enjoy ergonomic chairs and rock-solid Wi-Fi. Yet so does the barista at the corner café, courtesy of OSHA regulations and a broadband penetration rate that now tops 90 % of US households. If calamity strikes—a ladder slip, a chest pain—911 dispatches EMTs trained to treat need, not net worth. Lunch? Likely Chipotle. I may order extra guac, but the 700-calorie burrito is built on the same assembly line for every customer, whether they swipe an Amex or an EBT card. Exercise is equally impartial. I sweat at an Equinox scented with eucalyptus; another American sweats at a public park pull-up bar. Muscles and mitochondria respond the same. Evenings reveal the sweetest equality. I stream the Yankees on a flat-screen indistinguishable from one in a studio apartment subsidized by Section 8. More than nine in ten low-income households own TVs, and the broadcast signal does not means-test its drama. When Aaron Judge hits another monster home run, the cheer in my living room echoes in millions of others. Yes, money smooths the edges. I can charter a Gulfstream, though I often wedge into seat 12B on JetBlue because it’s nonstop. I can book a villa on Kauai, yet the entry fee for Yellowstone is the same $35 that a college sophomore scrapes together. Nature, our oldest public good, refuses VIP pricing. So what does my fortune really buy? Convenience, optionality, a wider margin for error, status. But the core blessings—warm showers, climate control, instant information, paved roads, emergency medicine, streaming entertainment—blanket virtually all Americans, including those officially counted as poor. That is the quiet magnificence of our republic: prosperity has spilled so far past the castle moat that a billionaire’s Tuesday looks a lot like Tuesday everywhere else. Tomorrow, when I rise again on that utterly ordinary mattress, I’ll whisper a thank-you to the engineers, farmers, nurses, coders, and soldiers who turned luxury into baseline. God bless the United States of Standard-Issue Comfort—and the patriotic genius that made equality feel so wonderfully mundane. Happy July 4th

Sandstorm ($sand, $Ssl.to) receives a takeover offer from Royal Gold at a 17% premium. This is after being up nicely over the past year. PS: Value Investing Works!