Altbridge Capital

Semper Augustus' 2025 letter: 184 pages, every number by hand.

Returned 41% at 12x earnings vs S&P at 26x.

AI capex = fiber optic 2.0. Tech works. Investors get wiped.

$1T/yr in buybacks yet more shares outstanding than 2000. Just covers insider dilution.

Free to read. Data work is elite.

Capital formation, rule of law, deep markets — the true moat of US equities.

Only ~5% of public companies sustain ROIC above WACC for 10+ years. Finding those wonderful businesses is what we do.

Valuation games happen in public markets too — related-party transactions, round-tripping.

Our Beneish M-Score screening catches manipulation before it hits earnings. Due diligence isn't optional.

If Waller pivots dovish, rate-sensitive sectors re-rate fast — REITs, utilities, homebuilders.

The market isn't pricing mid-year cuts yet. Watch TLT and XHB for early signals.

Correlation spikes to 1 in a crash — diversification only works in calm markets.

But recovery paths diverge. Ex-US developed already +10.7% YTD vs S&P +0.08%. The re-rating story is real.

The real risk isn't AI crashing markets — it's AI changing which companies have pricing power.

Thin-moat software loses. Data network effects and switching costs win. The gap widens from here.

Buffett won't buy BTC because no cash flow to discount. His framework requires earnings.

But the question of what makes an asset 'investable' vs 'tradeable' is worth thinking about carefully.

The concentration in a few names reflects winner-take-all platform dynamics.

For investors: the question isn't whether it's overvalued — it's whether the moat justifies any premium at all.

NVDA and AAPL holding up on red days shows where conviction lies.

NVDA: inference > training now. AAPL: $110B+ FCF, services 26% of revenue. Both pass our quality screens.

S&P at 21.5x forward vs 20yr avg 16.8x. Either earnings grow 28% or multiples compress.

We run DCF models across 3,000+ stocks. Compression hits overearners hardest.

Velocity of money is underrated as an indicator. When it rises, nominal GDP grows even without new money creation.

For stock pickers: rising velocity benefits companies with pricing power (consumer staples, infrastructure) over growth names.

Oil equities are structurally undervalued. California Resources Corp trades at 5x EBITDA with $600-700M FCF.

Global underinvestment in upstream + cheap valuation vs gold (60:1 ratio vs 20:1 historical) = setup for a multi-year re-rating.

Banks writing research to justify their own positions is as old as banking itself. The real signal is in the data, not the narrative.

Always read the methodology section. If they don't show their work, the conclusion is marketing.

The market IS vibes short-term. But long-term, it's a weighing machine.

We run 3 forensic screens on every stock: Beneish M-Score, Altman Z-Score, Piotroski F-Score. Vibes can't fake cash flow.

Buffett's Berkshire holds $325B in cash right now. That's not fear — that's discipline.

When the greatest investor in history can't find attractive prices, it tells you something about current valuations. Patience is a competitive advantage.

Software stocks getting punished is the flip side of the AI capex cycle. Investors are asking: if AI replaces software workflows, what happens to SaaS multiples?

The answer varies wildly by company. Moat analysis matters more than ever here.

Central banks globally are diverging — BoK holding at 2.50% while the Fed is still debating cuts. This divergence creates interesting FX and carry trade dynamics.

For equity investors: watch the won/dollar pair for Korean export names.

Japan's corporate governance reforms are genuinely transforming capital allocation. Companies unwinding cross-holdings and returning cash to shareholders.

The dividend growth story there is structural, not cyclical.

The US exceptionalism trade is unwinding. Ex-US developed +10.74% vs S&P +0.08% YTD is a massive divergence.

European telecom alone trades at 5-7x EBITDA vs 13x+ US peers. We wrote about this gap — it's real.

Days like this are when disciplined investors build positions. Our forensic screens show most of the sell-off is sentiment-driven, not fundamental.

The companies with strong FCF and low debt are the ones to watch on red days.

BYD delivered 4.55M vehicles in 2025 — 2.8x Tesla's 1.64M.

Trading at 18-22x earnings (15-16x net of cash). Controls 75% of components in-house.

Vertical integration creates cost advantages competitors can't replicate. Full analysis on Substack.

CATL vs BYD: 55% of global EV batteries.

CATL: 37.9% share, 24.4% gross margin, RMB 300B+ cash.
BYD: 17.2% share, 4.27M NEVs sold in 2024.

Both targeting solid-state batteries by 2027.

Different strategies. Same massive TAM.

Chinese automakers develop new models in 18 months. Western firms take 5+ years.

BYD sold 4.25M vehicles in 2024 (+41%), surpassing Tesla globally.

150+ brands competing in China created battle-hardened innovators now going global.

Capital One is becoming a payments infrastructure giant.

$250B+ combined card portfolio post-Discover acquisition. $1.2B annual synergies. 100% cloud-native.

Q4 revenue: $15.6B (+53% YoY).

This isn't a credit card company anymore.

Charter added 44K video subscribers in Q4 2025 — after losing 123K in Q4 2024.

Mobile lines surged 19% to 12M subs. Cox acquisition makes them the largest US cable operator.

Video isn't dying. Bundling broadband + mobile + video is the winning formula.

Our offshore drilling thesis is playing out.

Transocean acquiring Valaris — $17B combined EV, $10B backlog.

Day rates surged from $300K to $450-500K. Aging fleet + no newbuilds = supply squeeze through 2027.

We called this months ago.

Intel's $11.1B government bet.

18A node is on par with TSMC N2. But TSMC has 15+ customers vs Intel's handful.

Can manufacturing excellence convert to customer wins before losses exhaust patience?

Deep dive on our Substack.

Tencent generates $28B annually in gaming alone — more than EA, Nintendo, and Take-Two combined.

WeChat: 1.4B MAUs. Owns Riot Games, Epic Games, Supercell.

Buying back HK$80B in stock while growing 14% YoY.

Growth + capital discipline. The kind of combo that compounds for decades.

European telecom: generational arbitrage?

The sector trades at 5-7x EBITDA vs 13x+ for US peers.

Liberty Global trades at ~$11 with management's sum-of-parts at $25+. That's a 55-60% NAV discount.

Catalyst: EU Digital Networks Act + relaxed merger rules are finally unlocking consolidation.

California Resources Corp trades at 5x EBITDA with $600-700M annual free cash flow.

PV-10 of reserves ($8.9B) is nearly 2x the market cap. Buybacks running at 12-14% annually.

Low decline rates (8-13% vs 30-50% for shale). This is the Belridge Oil trade of our generation.