Quality Equities

Quality Equities portfolio at the end of October 2026. Here is what I own: - About 40% is in the big platforms: $AMZN Amazon, $META Meta, $GOOG $GOOGL Alphabet, and $MSFT Microsoft. They run the places where people shop, advertise, work, search, and rent computing power. - About 25% in chips and chipmaking equipment: $NVDA Nvidia, $ASML ASML, and $KLAC KLA. Nearly every advanced AI chip depends on what these 3 make. - About 19% in payments: $MA Mastercard and $V Visa. They take a small cut of trillions of dollars in spending and need very little capital to grow. - The rest is $SPGI S&P Global, $UBER Uber, and $BN Brookfield. Payments now makes up a bigger share, and Alphabet a smaller one based on how the market has decided to rate these companies. The goal stays the same. Own a small number of the highest quality businesses in the world.

$MELI MercadoLibre: revenue $10.75B (+45% YoY), GMV ~$23B (+33% FX-neutral), items sold +36%. Operating margin 6.3% as fulfillment capacity rose almost 20% QoQ and marketing ramped in Brazil. Ads +58%, credit book +62% to $17.9B. Growth first, then leverage — classic platform reinvestment.

$PLTR Palantir: 87% trailing revenue growth, a 45.6% GAAP operating margin, no debt, $10.56B in cash. Bookings growth last quarter: 6%. Which number tells you more, the 96% or the 6%?

Same quarter, two U.S. pictures. Which would you rather own? $MCD McDonald's: U.S. comps -0.2%, global +1.5%, operating margin 47.6%, EPS +10%. $YUM Yum! Brands: Taco Bell comps -4%, KFC +1%, dividend raised to $0.75. International did the lifting at both.

Two chip businesses report tonight. Which would you rather own? $QCOM Qualcomm sells chips and licenses patents. Last qtr: $9.9B revenue, -4%. Licensing pre-tax margin: 69%. $ARM Arm Holdings licenses chip designs. Last qtr: $1.29B revenue, +22%. Non-GAAP gross margin: 98.1%.

$PLTR Palantir's stock pay was 24% of revenue in 2024. Over the last 12 months it was 13.5%, and diluted shares rose just 0.1% in a year. The dilution problem that once hung over the stock has largely been brought under control.

Morgan Stanley's Mike Wilson: roughly 60% of Russell 3000 stocks are down more than 20% since June. His view: the correction "is in the final stages, but the final stage can be very uncomfortable." He favors quality stocks that have already corrected more than the index.

$ANET Arista Networks grew revenue 58.5% in Q3, its fastest year-over-year growth since its IPO. Revenue: $3.66B Non-GAAP op margin: 49.1% Sales & marketing: 4.3% of revenue Debt: none 9-month free cash flow: ~$3.8B, ~100% of net income 2027 outlook: 38-40% growth, to ~$18.5B.

$PLTR Palantir hit a milestone in Q3. For the first time, U.S. companies paid it more than the U.S. government did: $984M vs $953M. A company built inside defense agencies now has a commercial engine to match.

$UBER Uber Technologies Q3: 4.1B trips (+16%) from 215M monthly users (+14%) — scale that feeds the network. Revenue +10%, GAAP op income +30%: operating leverage. FCF $2.5B, ~86% of adj. EBITDA. $750M of buybacks. $10.1B cash vs $15.7B long-term debt.

Two data points this morning: 8:15 AM ET: ADP private payrolls for October. September: +90,000. 10:00 AM ET: ISM services PMI. September: 54.9. The line I'm watching is ISM prices paid: 74.0 in September, the highest since July 2022. That's when pricing power earns its keep.

$BKNG Booking Holdings Q3: adjusted net income grew 8%, but adjusted EPS grew 17% to $4.66. The gap is per-share math. Booking bought back $2.1B of stock in the quarter. Room nights: 345M, +7% Gross bookings: $54.5B, +10% Adj. EBITDA margin: 47.0%

$RACE Ferrari shipped 33 fewer cars last quarter than a year ago. It still made more money. Revenue: €1.896B, +7% EBITDA margin: 39.7%, up from 37.9% Net profit: €431M, +13% A richer mix and more personalization did the work. Ferrari also raised its 2026 guidance.

$ANET Arista Networks reports tonight. It sells the switches and software inside data centers. Last quarter (June): Revenue: $3.04B, +37.7% Non-GAAP op. margin: 49.9% Sales & marketing: 5.0% of revenue (GAAP) Q3 guide: ~$3.3B revenue, 48-49% non-GAAP op. margin.