Chit Chat Stocks – Episode Summary

Episode Title: A Microcap Christmas Miracle; Financial Charlatan Of The Year; 12 Boring Stocks That Outperform
Release Date: December 26, 2025
Hosts: Ryan Henderson & Brett Schafer

Episode Overview

This holiday edition of Chit Chat Stocks covers several diverse topics: Nike's stalling earnings, the strange saga and recent liquidation breakthrough at microcap Harbor Diversified, a sizable Alphabet acquisition for AI data center infrastructure, listener questions (including cannabis REITs), the annual Financial Charlatan of the Year “award,” and a look at “12 Boring Stocks That Outperform.” The tone is conversational, slightly irreverent, and deeply analytical, with hosts sharing both stats and investing psychology throughout.

Key Discussion Points & Insights

1. Nike Earnings: An Apparent Decline

• Timestamps: [02:20] – [14:17]
• Nike’s Q2 numbers disappointed: Revenue up only 1% (flat when currency-neutral), direct sales down 8%, and EPS down 32% YoY.
• Ryan points out that Nike's stock has underperformed for the last 10 years (“If you invested $10,000 in Nike 10 years ago, you’d have $9,860” [03:30]), which is surprising for a one-time top-tier apparel brand.
• Brett identifies over-reliance on direct-to-consumer (DTC) and weak competitive moats, despite Nike's strong brand recognition.
• Both hosts conclude that “brand” tends to be an overestimated moat in consumer retail — real, sustained advantages come from other sources (distribution, scale, switching costs).
• Notable Quote:

  “I think brand is overrated...I don’t think brand is a moat...The brand is just cherries on top.” — Ryan, [11:19]

2. Harbor Diversified: A Microcap “Miracle”

• Timestamps: [14:17] – [29:39]
• A long-running net-net (deep value) microcap play, HRBR (Harbor Diversified/Air Wisconsin), finally sees positive movement with asset sales.
• Brett details the saga: stock tanked (below $0.50) after regulatory filing issues and going dark, now rebounding with the sale of jets for $113M.
• Breakdown of NAV (Net Asset Value): Post-sale, company has ~$200M NAV vs. $100M market cap. Brett thinks fair value is "$3/share," Ryan already sold at $1.75/share, weary of management and illiquidity.
• Both agree: Good lesson in deep value investing, illiquidity, and when to move on.
• Notable Quote:

  “At a certain point, you just want to be done with the headache...I want companies I can sock away and monitor their progress.” — Ryan, [24:45]

• Listener Questions Covered: Fund holdings, jet asset disposition, balance sheet guesses.

3. Alphabet Acquires Intersect for $4.75B: Data Center Energy Play

• Timestamps: [29:39] – [36:19]
• Alphabet (Google) announced acquisition of Intersect, a renewable energy/data park developer, for $4.75B.
• Hosts discuss why: Massive AI expansion is straining US power grids; owning energy infrastructure insulates Alphabet from utility constraints and will power in-house data centers.
  • “Local power grids...are increasingly strained by AI demand...Owning a developer allows Alphabet to build its own generation capacity.” — [31:36]
• Brett notes other hyperscalers haven’t made such moves; this suggests serious AI demand at Google.
• Andrew Marshall from Capital Mindset (in chat) confirms, “Google is trying to double their capacity over the next year.” [33:44]
• The acquisition is seen as a sign of confidence in long-term deep-learning demand, though both hosts express surprise that tech giants are becoming quasi-energy companies.

4. The AI Subscription Wars & OpenAI’s Unprofitability

• Timestamps: [36:19] – [45:57]
• Discussion branches into Google’s booming subscription businesses: $46B LTM, with a strong outlook (“above $100B by 2030” — Brett, [36:54]).
• Talk of advertising in AI: OpenAI rumored to run ads via Amazon’s DSP (Demand Side Platform) rather than Google or Meta.
• Brett argues OpenAI is "selling dollars for ten cents" due to enormous compute costs, suggesting their subscription price is unsustainably low, and “operating margins don’t have anything to do with compute costs.” [44:40–45:10]
• Fun comparison: Will OpenAI be the next WeWork or is that overblown? Hosts are skeptical, but note the cash bonfire is historic.

5. 12 Boring Stocks That Outperform

• Timestamps: [45:57] – [52:07]
• Ryan shares a list of “boring” companies that have quietly outperformed the market over the last decade — e.g.: United Rentals, Amphenol, Caterpillar, Cintas, MSCI, Old Dominion Freight Line, Arthur Gallagher, WW Grainger, Rawlins, O’Reilly, Waste Management.
• Key insight: Many of these benefit from physical or logistical network effects and capital discipline.
  • "Physical networks like Old Dominion, O’Reilly, Cintas, Waste Management...these are basically physical networks that have just developed over time." — Ryan, [48:58]
• Brett’s picks from the list: WW Grainger and Waste Management, at the right price.

6. Financial Charlatan of the Year: The Results

• Timestamps: [52:07] – [58:27]
• Annual tongue-in-cheek poll, nominees included: Michael Saylor, Bill Pulte, Peter Navarro, the “All In” crew, Bill Ackman, others.
• Winner: Michael Saylor (“He can forever dilute shareholders and buy more bitcoin. If I were him, I’d stop doing press tours” — Ryan, [55:56]).
• Short discussion of past years’ winners and why certain names recur. Some sympathy for Bill Ackman; debate over what makes someone a “charlatan.”

7. Listener Questions: Cannabis REITs and Industry Thoughts

• Timestamps: [58:27] – [63:18]
• Listener asks about Innovative Industrial Properties (IIPR), a cannabis-focused REIT with a >14% dividend yield.
• Brett and Ryan run quick financial checks: Coverage looks okay, but industry faces uncertain prospects.
• Takeaway: Even with legal rescheduling, demand is possibly overestimated and customer distress risk remains high. “Cannabis...just not that attractive to me.” — Brett, [63:09]

8. Closing Investing Question: One Stock for Five Years?

• Timestamps: [63:18] – [65:07]
• Ryan asks: “If you could only own one stock for the next five years, what would it be?”
• Brett’s pick: Nintendo, for its net cash, low enterprise value, strong IP, and cash flow generation. Also mentions other high-upside, riskier names from his portfolio.

Notable Quotes & Memorable Moments

• On apparel moats:

  “Never invest in apparel.” — Brett, summarizing a recurring theme [06:55]

• On microcap investing headaches:

  “At a certain point, you just want to be done with the headache...” — Ryan, [24:45]

• On AI compute economics:

  “You’re selling a dollar for ten cents... If I started selling burritos for a dollar, demand would skyrocket, but I’d have negative 200% margins — which OpenAI does.” — Brett, [42:01]

• Live Stock Analysis:

  “Let’s do a little Grainger analysis, shall we?” — Ryan, [49:27]

• Holiday Timing Humor:

  “They have a board meeting planned for... December 30th or 31st. So they’re going to vote on some stuff there. I really hope they don’t try to screw outside shareholders...” — Brett, [22:43]

• On annual charlatan voting:

  “2018, Ross Gerber. Remember him?” — Brett, [57:32]

Important Segment Timestamps

• Nike Earnings & Apparel Discussion: [02:20] – [14:17]
• Harbor Diversified Deep Dive: [14:17] – [29:39]
• Alphabet / Intersect Acquisition: [29:39] – [36:19]
• AI Economics & Subscriptions: [36:19] – [45:57]
• 12 Boring Stocks: [45:57] – [52:07]
• Financial Charlatan of the Year: [52:07] – [58:27]
• Listener Q: Cannabis REITs: [58:27] – [63:18]
• One Stock for Five Years: [63:18] – [65:07]

Episode Tone & Style Notes

The hosts combine tight fundamental investing analysis with humor and personal stories. They offer deep dives (often including rough back-of-envelope valuation), acknowledge their own mistakes, and aren’t afraid to challenge industry narratives (especially around “brand” moats, AI hype, or cannabis as a “growth” sector).

For Listeners Who Want More

• Past Financial Charlatan of the Year Recaps: [56:59] – [58:05]
• Investment service plugs: [42:52] Fiscal AI / [43:56] Emerging Moats (skip for core content)

This summary should give non-listeners a comprehensive feeling for the episode’s range and style, while highlighting actionable investing observations and those bite-sized moments (with timestamps) that matter most.