Strategy filed an 8K this morning: they sold $300 million of stock, sold $100 million of bitcoin, and put the proceeds into buying back roughly $80 million of their own preferred at a discount. So you have a company trading over NAV, diluting shareholders, and selling the one asset it exists to hold, and it is still trading at a premium. Management is presenting the move from "one-way capital issuer" to "multi-way capital issuer" like it is a financial engineering breakthrough. It is just normal capital allocation, and it took them five years to get there.

That is the through line for this whole ramble: selling. Strategy made a genuinely good call in 2020 and then never sold a thing. Situational Awareness made a generational call, long AI winners and short AI losers, went up something like 10x on it, never rebalanced, kept pressing a trade that naturally degrosses, and blew up when software went from 20 back to 30 and semis went from 400 back to 370. I do a miniature version of the same thing every time I decide in advance that I will start trimming at 15 a stock I bought at 10, and I am not sure that plan is as smart as it feels. I also get into why thematic trades are so hard to sell when there is no price to anchor to, whether the crossover funds actually had an AI information edge or just conviction, why I cannot make the memory valuations work under any assumption I am willing to make, and where I think the real opportunity is: the beaten-up AI power names Situational owned in size, several of which are not trading far above the DCF of the contracts they already have.

Situational Awareness, crossover funds, and the AI edge: https://www.yetanothervalueblog.com/p/crossover-funds-ai-edge-situational-awareness

This episode is sponsored by Trata: https://www.trata.com/glxy. Trata is two buysiders hopping on a call and talking through a stock they are actually working on, which is the fastest way I know to get up to speed on a name. They also have an MCP now that connects to Claude and ChatGPT, so the first thing I do on a new name is run the Trata search and see what buysiders are really saying. That link is a preview of the Galaxy call I mention on the episode.

Chapters:

(00:00) Cold open: three things on my mind

(02:11) Sponsor: Trata

(03:55) Why I am recording a bonus ramble

(04:49) Strategy's new 8K: sell stock, sell bitcoin, buy back the preferred

(06:05) "Multi-way capital issuer" is just normal capital allocation

(06:58) A great call in 2020, and then they never sold

(08:21) Investors are good at buying and bad at selling

(09:37) Is my own sell plan its own trap?

(11:37) The Situational Awareness blowup

(13:19) The trouble with thematics: there is no price

(14:44) Micro versus macro, and the software buy signal I missed

(16:22) Do the crossover funds have an AI information edge?

(18:41) Why I cannot get to the memory valuations

(19:04) The opportunity in the beaten-up AI power names

(22:05) Wrapping up

Links:

Yet Another Value Blog - https://www.yetanothervalueblog.com

See our legal disclaimer here: https://www.yetanothervalueblog.com/p/legal-and-disclaimer

Production and editing by The Podcast Consultant - https://thepodcastconsultant.com/

Disclosures: I am short $MSTR and long $GLXY. Nothing on this podcast is investment advice. Please do your own work.