Senior Equity Analyst at ByteTree | CFA Charterholder | Focused on quality investing | Views my own, not investment advice.
London, England
Joined March 2019
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“A great business at a fair price is superior to a fair business at a great price… The investment game always involves considering both quality and price, and the trick is to get more quality than you pay for in price. It’s just that simple." - Charlie Munger
@ByteTree Quality is an investment research service which does exactly that.
#Quality #Investing
bytetree.com/bytetree-qualit…
Where's the alpha in markets today?
Where is it moving to, and from?
ByteTrend data breaks this down into a map of global alpha. Here's what changed in the last week ⤵️
Taken a week off from markets?
Here's what you missed, in a thread 🧵
Summary: the world index barely moved, but leadership rotated a lot underneath.
MSCI World $ACWI fell 0.7%. On Friday, its Weekly Local score dropped from 5 to 4, the first time it has been off 5 since mid-April.
Money moved out of megacap tech, semis, precious metals and materials. It moved into healthcare, staples, energy and rate-sensitive stocks.
Leadership across the market kept thinning, as it has since the summer.
One return ticket to Overvalued, please.
$NKE EV to Sales has completed a round trip from 1.3x sales to 8x sales and back.
What's that old saying again - "buy low, sell high"? Good one.
$APP AppLovin
Free cash flow up over 1000% since 2021, share price down over 50% since 2025.
Clearly, its valuation got ahead of itself, but the trailing PE has fallen from 100x to 20x. Sales growth is 60% annually, and the FCF yield is now over 5%.
Trend certainly not good at this point, but one to watch if the winds turn.
$FICO -7% today.
It staged an impressive rally after the shock Bill Pulte announcement (-20% drop) allowing broader competition.
Today, the fall comes as it announces it won't be raising prices this year. The valuation was largely premised on incredible pricing power, but recently, this was clouded as many felt it took this too far.
Uncertain times...
Kit Winder, CFA retweeted
Defensive Stocks Surge
In a dramatic shift, low-volatility stocks are now the strongest daily CAPR trend group, following a long period of high-volatility stocks leading the market.
Mega-caps still dominate, so no change there.
This fits the “flight to quality” narrative.
$NU is down 20%, but hasn't quite made a new 1Y low.
Significant, if it can hold on.
Kit Winder, CFA retweeted
Breaking down global momentum ⬇️
After five years in a bear market, US bonds suddenly surged against world equities in October.
Low-volatility stocks have also overtaken high-vol names as the strongest trend group. It’s a classic flight to quality.
📉 Stocks with a bearish 0-star daily ByteTrend score: 48% → 29%
📈 Stocks with a bullish 5-star score: 9% → 17%
Semis ($SOXX 👇) held an almost unbroken 5-star relative trend from June 2025. They have now slipped to a neutral 3 and are making new relative lows.
Is this a blip or a real shift?
This week’s Global Trends update by @WinderKit is free to read on our website - link in reply👇
$TLT #Bonds #Semiconductors #Momentum
Hermes $RMS relative to the world since 2012.
-65% drawdown.
In 2023, Hermes traded at an EV/Sales that was 7.5x higher than the index. Today, it's "just" 2.2x. Previous average 4.5x.
What premium is still deserved?
Kit Winder, CFA retweeted
Great note by @FTAlphaville on the different ways to slice and dice French debt metrics. Firstly, converting it into constant currency to make intl rates more comparable, and then looking at spreads over the overnight funding rates, showing how small the current crisis is compared to Greece in the early 2010s.
This is a seismic flicker at the moment - a warning - but not an earthquake (yet).
In the end, perhaps what matters most is how much of a country’s GDP goes towards interest payments. France has quite a long average maturity (8.5yrs) sparing it a degree of urgency. And despite the last few weeks, France’s EU-leading govt spending and debt/GDP levels, the US and Italy are still set to spend a higher proportion of their economic product on paying off interest.
ft.com/content/9aa4549e-26f4… How nervous are bond markets about France?
Haven’t even listened yet, that’s how sure I am this will be worth sharing…
I caught up on Friday with my friend and business partner Anatole @kaletsky for our weekly Gavekal zoominar. We were supposed to discuss how sustainable the AI capex spending boom would prove to be in the face of rapidly rising corporate bond yields? But given the headlines on France, on the Middle-East and on the growing likelihood of a peace deal between Russia and Ukraine, we struggled to stay on track…
I asked the @gavekal editors to remove the locks on the podcast…
research.gavekal.com/content…
Bill Ackman’s Ground Rules
(As per his Knowledge Project interview with @shaneparrish)
- Large cap, liquid companies
- Simple predictable businesses
- Free cash flow generative
- Great management teams
- No short selling
They’re looking for the best companies in the world with the most durable moats run by the best management teams.
IMO the first rule is underestimated by many.
Great note by @FTAlphaville on the different ways to slice and dice French debt metrics. Firstly, converting it into constant currency to make intl rates more comparable, and then looking at spreads over the overnight funding rates, showing how small the current crisis is compared to Greece in the early 2010s.
This is a seismic flicker at the moment - a warning - but not an earthquake (yet).
In the end, perhaps what matters most is how much of a country’s GDP goes towards interest payments. France has quite a long average maturity (8.5yrs) sparing it a degree of urgency. And despite the last few weeks, France’s EU-leading govt spending and debt/GDP levels, the US and Italy are still set to spend a higher proportion of their economic product on paying off interest.
ft.com/content/9aa4549e-26f4… How nervous are bond markets about France?
Kit Winder, CFA retweeted
Huge move in high beta/low volatility yesterday. Quality stocks doing what they should when the wind picks up.
First Citrini, now Robert Armstrong in the FT.
Looking to hedge falling tech? Markets are telling you that cheap consumer staples is a good place to look. These are American, but Europe has many excellent options too…
