Dear all,
3 + 2 cherry picked Maverick Charts of the week say 10,000 words or more = the ‘How’!
Table of contents = the ‘What’! Executed in a succinct manner with the aim of a high density of ideas, because great research respects the reader’s time:
📊 Maverick Charts: Nvidia ‘Honey-Trap’, S&P 500, The ‘3x L’
📊 Bonus: The Maverick Outlier in AI Hyperscaler’s Free Cash Flow
Objective: both data-driven insights + valuable food for thought = the ‘Why’!
📊 Maverick Charts: Nvidia ‘Honey-Trap’, S&P 500, The ‘3x L’ 📊
Nvidia CEO 2 affairs in 2 weeks = $1.2 trillion!
👉 $1.2 trillion drop in market value with the 22% drop
👉 hence, I will dub this ‘The Honey-Trap Chart & Discount’!
👉 Nvidia (blue) is the #2 stock with a 5.5% share in the S&P 500 (green), and very correlated for the past year … until the scandals around the CEO came to light
👉 I am all in for founder/co-founder led companies, leaders and employees that have Skin In The Game (STIG), both financial, reputational and legacy wise, but this also highlights the ‘key man risk’ that comes with certain companies — how many investors/analysts have that inside the DCF valuation models? Not many, trust me!
👉 in any case, Huang is a special and true case of ‘From Zero to Hero!’
you might not know, but he started working around age 15 at Denny’s where he was a dishwasher, busboy, and waiter (server) — it is hard to fake such humble starts to where he got
a hugely successful CEO, and unlike many other CEOs who get parachuted into their roles, Huang co-founded the company and he was a very smart chip designer and engineer himself = Skin In The Game for the win!
👉 I am not here to defend or attack his recent personal actions (morality etc):
just saying nobody can take away what he did for many decades, on the other side
“It takes 20 years to build a reputation and 5 minutes to ruin it” as Buffett said
and now he pays the price — he just resigned 3 hours ago!
👉 if the spying suspicions are proven to have happened and detrimental to the business, then the stock drop is warranted, otherwise not really, then overcooked:
I think the company will move on regardless
as long as the business model of any company is very good as it has a MOAT, it should do well without the former/current/future CEO
Coupling Nvidia with Apple, the top duo of the S&P 500, we see the same pattern:
Maverick personal note, I worked in quite a few places, publicly traded companies:
I have seen too many times how CEO and other top dogs engage in affairs, both inside and outside the company, and guess what, nothing happened
a mix of not being too public, and most likely they were anyway not as important and ‘big’ as they thought? 😉
also it was funny to witness how too many employees were too ‘busy’ talking about the subject for hours and days about the topic, instead of working — some even supporting those actions and people so that they advance their careers, but on LinkedIn they all looked professionals, with morals and all that
when I called them out that they should be busy working not gossiping, and especially not encouraging and kissing buts above, suddenly I became the ‘enemy’, and even gossiping about me not being professional or a team player
there are some ‘talented’ people (sarcasm alert) who are great to spin things round, but in reality they are just the left tail of humanity — and sooner or later, they get the slap one way or the other, even if they ‘win’ on the short term
if you ever find yourself in a company where people are way too ‘busy’ with gossip, office politics & virtue signalling on LinkedIn, instead of working, it is time to leave! 😉 — you are doing yourself a big service as you are just surrounded by rent seekers and free riders with highly questionable professionalism, skill, morality and integrity!
Nvidia vs S&P 500 valuation via the forward P/E — cheaper than the market:
👉 Nvidia is now ‘cheaper’ than the S&P 500 overall, and also ‘cheaper’ than 309 companies in the S&P 500 — quite some more than half!
👉 at 13.7x P/E, Nvidia is now way below its 36.8x 10-year mean, and also way lower than the launch of ChatGPT from 4 years ago
👉 just 3 years ago, it was more than 200% expensive than the market, now at 71%
👉 S&P 500 at 19.2x P/E, very close to its 19.9x 10-year mean
Recall ‘The Triple L’ via Charlie Munger! And a Maverick wordplay for jokey vibes:
Leverage does it quickly, while Ladies & Liquor take longer, but can do the same too! 😉
Source, my mid 2025 post: ✍️ Margin Debt (Leverage/Borrowing) by Retail Investors
📊 Bonus: The Maverick Outlier in AI Hyperscaler’s Free Cash Flow 📊
4. AI Hyperscaler’s Free Cash Flow aka 'Show Me The Money': Microsoft, Alphabet, Meta, Oracle, Amazon vs Apple (Q, billions):
👉 combined Hyperscaler’s FCF has just switched negative — from positive +$70b to negative -$1.6 billion in 3 years!
Welcome Apple onto the stage, the ‘Non-AI CAPEX’ Maverick outlier — still highly positive as it sits out the massive AI infrastructure spending spree!
Investment Themes by Decades & their Returns = another Maverick Chart for 10,000 words or more!
👉 Nifty 50 until 1970 = 645%
👉 EM & Commodities until 1980 = 1,259%
👉 Japanese Stocks until 1990 = 527%
👉 U.S. Tech until 2000 = 795%
👉 EM & Commodities 2.0 until 2010 = 381%
👉 U.S. Tech 2.0 until 2020 = 737%
👉 current U.S. American Tech 3.0 with AI = a whooping … drum rolls … 3,075%!
1 common denominator = a recession breaks themes when it comes to returns!
There are a few big question when it comes to AI, both short, medium and long term:
Will AI be the biggest misallocation of capital in the history of capitalism?
Will it be a net benefit to society and future efficiencies derived from them?
What will be AI’s impact on productivity?
What will be AI’s impact on jobs?
I will tackle these key AI questions + more via the future Maverick Special reports:
AI
✍️ AI, Jobs and Productivity — Current Evidence and Outlook
✍️ AI ROI CAPEX Pressure Cooker
✍️ Is AI in Bubbly Territory?
✍️ Maverick’s AI Long-Term View
Also on the AI CAPEX big cycle we are having currently, I am working on 2 Maverick proprietary indicators/indices that would capture the two key dynamics:
✍️ AI ROI on CAPEX (a quantitative objective gauge)
✍️ AI Sentiment (a qualitative, subjective gauge)
S&P 500
✍️ S&P 500: Valuation, Fundamentals, Special Metrics & Leading Indicators
✍️ S&P 500: Performance, Sentiment, Seasonality & Technical Analysis
✍️ Is the U.S. Stock Market in a Bubble?
✍️ Market Pockets of Overvaluation, Animal Spirits Behaviour and Bubbly Territory
The U.S. Economy
✍️ U.S. Economy: What is Both the Real-Time and Underlying Real GDP Growth?
✍️ U.S. Economy Decoded in Real-Time Through Sleek High Frequency & Alternative Data
✍️ The State of the U.S. Economy in 75 Charts = A Deep Dive!
✍️ U.S. (R)ecession Talk: Special & Leading Indicators, Recession Models & Probabilities
In case you missed my latest post, this one on the future Model Portfolios is key:
The 2nd report in this section will soon cover a key topic valid for any portfolio:
✍️ The #1 Mandatory Feature Every Portfolio Must Include (Not Just Should!) ✍️
Maverick Charts 66th edition done, 3 key charts with many insights + 2 Bonus!
You can check all the previous 65 editions in the Maverick Charts section!
Research is NOT behind a paywall and NO pesky ads here unlike most other places!
Did you enjoy this by finding it interesting, saving you time and getting valuable insights? What would be appreciated?
Just sharing this around with like-minded people, and hitting the 🔄 & ❤️ buttons!
That’ll definitely support bringing in more & more independent investment research!
Like this, the big positive externalities become the name of the game! Thank you!
Sharing = 3x win: you + your close ones + me!
Have a great day! And never forget, keep compounding: family, friends, community, capital, knowledge, research and mindset!
With respect,
Mav 👋 🤝
“Don't let success get into your head, buddy!
While in the same time, don't let the failure get into your heart, buddy!”
Maverick Equity Research
