Pharma, Food and the Fluent Consumer

“I have what I call an iron prescription that helps me keep sane when I naturally drift toward preferring one ideology over another. And that is I say ‘I’m not entitled to have an opinion on this subject unless I can state the arguments against my position better than the people do who are supporting it.’ I think only when I reach that stage am I qualified to speak.” - Charlie Munger

Detailed Breakdown of SpaceX’s Business Value: Most people think of SpaceX as a rocket company, but the company is actually split into three distinct segments. Understanding each one separately is the way to make sense of everything that follows... At a $2 trillion valuation and $18.7 billion of revenue, SpaceX is being valued at around 100 times sales. The company also lost $4.9 billion last year. That is the entire valuation debate in one sentence... That AI valuation rests heavily on a single contract with Anthropic worth about $15 billion annually. Applying a high revenue multiple to that agreement creates much of the division’s value. The challenge is that either party can terminate the contract with 90 days’ notice, and Anthropic is also a direct competitor to Grok.

https://www.dezerv.in/blog/a-detailed-breakdown-of-the-largest-ipo-in-history/

Pharma, Food, and the Fluent Consumer: On November 14, 2017, 31 million Americans woke up sick. None of them had felt a thing the night before. I was one of them. The day before, on November 13, the American College of Cardiology and the American Heart Association had announced a new set of guidelines. The threshold for hypertension, which had been 140 over 90 for as long as anyone alive could remember, was now 130 over 801. The aspirational target they hold up is 120/80. A few weeks later, my doctor looked at the same chart with the same numbers and informed me, with the gentle gravity that doctors reserve for delivering news, that I now had a condition. I asked which one. She said, hypertension. Really? Since when? She looked up and, to her credit, smiled. “Since a few weeks ago.” My number had not changed. The line had. And in the time it takes to redraw a line on a piece of paper, almost half of all American adults became patients.

The Sloan Ratio: Reported net income is two things blended together: The first is cash, money the business genuinely received this period. The second is accruals, accounting estimates layered on top. Revenue booked before the customer has paid. Expenses pushed into the future. Inventory that’s piling up. Accruals aren’t fraud; they’re a normal, required part of accounting. But they’re also where manipulation can hide. The Sloan ratio puts a single number on the question every serious investor should be asking: how much of this profit is real cash, and how much is paper? So a predictable pattern emerges: companies whose profits lean heavily on accruals tend to disappoint later, and their stocks underperform. Companies whose profits are backed by cash tend to hold up. The Sloan ratio is your early detector for which camp a company is in, before the writedowns, the restatements, and the analyst downgrades arrive.