The Hidden Art of Finding Variant Views

We have covered the core process that many top analysts follow in generating ideas.

It’s a very useful framework that provides clear action steps and scalability, but while it allows a lot of freedom within each step, it overemphasizes structure, modeling and an overall research process around framing the bull/bear case that has become commoditized at the large funds given that it’s what the major training programs teach.

It also misses a few critical points. One is that ideas can come from anywhere. The best variant views don’t necessarily come from better modeling or reading sell-side research and talking to other investors. The best ideas come from knowing when to be commercial, asking the right questions and doing unique work to diligence them.

Today we cover one of the most underrated frameworks for finding great ideas. We dive deep into a relatively recent short in healthcare: Hims & Hers Health (HIMS). It’s a fascinating example that will show us what the framework truly is about at each level.

We first need to understand the underlying business of HIMS and the entire setup around the stock and compounded GLP-1s, so stick with me.

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Hims & Hers Health (HIMS), known as Hims, currently at ~$6.5B market cap, is a direct-to-consumer telehealth/healthcare company. It lets people obtain treatment for relatively common, recurring health problems like hair loss and obesity. Hims and Hers are the company’s brands, with Hims being primarily marketed to men and Hers to women.

Let’s go through a target customer’s journey to understand the business:

Imagine a 32-year-old man, Michael, who is losing his hair.

Hims spends heavily on marketing: for reference, in Q3 2025, it reported $232 million of marketing expense, $203 million of which was customer acquisition cost.

So Michael may see a Hims ad on Instagram saying something like “Treat hair loss online. No waiting room.” He clicks on it and fills out a questionnaire about his symptoms and history. A licensed provider such as a doctor or a nurse practitioner will then review his case, usually fully asynchronously. A live video or phone consultation might be needed in some cases depending on the exact US state and medical condition.