Here’s a preview of what we’ll cover this week: 

• Macro: Accelerating Growth and Labor Resilience; The Reality Behind Slowing Wage Growth; Shifting Away From The US; DAVOS: REALPOLITIK IS BACK

• Markets: Software Is The New Restaurants; The Gains Were Due For Meta; The Bubble Around OpenAI

• Lumida Curations: AI-Powered Fighter Jets; The Future of Money Movement; Aging: A Solvable Problem

Spotlight

I did a Lumida Non-Consensus Investing podcast on Monday, talking about Economic populism, and the out-performance of international stocks vs the S&P 500.

I have never owned as many international themes as I do now. Watch the pod here.

We also discuss major themes, and sectors that might dominate markets in near term.

This Monday, I am speaking with Angelo Robles at the Uncorrelated Conference in Miami. 

We will be discussing real assets and what AI means for investing. 

Angelo is an amazing host.

If you’d like to attend it, the registrations are open. You can find details here.

WHY KARA SWISHER IS WRONG

[ I wrote this post on X, and it received some attention. Sharing here./ ]

Kara Swisher thinks entrepreneurs owe their gains to the state. 

She can’t be more wrong. 

California did not invent the product.

California did not write the code.

California did not take the risk.

California did not skip paychecks.

California did not sign personal guarantees.

California did not stare down payroll, lawsuits, or bankruptcy.

The founder did.

Entrepreneurs create value by solving problems people voluntarily pay to solve. That value did not exist before the founder acted. 

The state did not “provide” it. 

At best, it provided infrastructure—roads, courts, universities—things funded by prior taxpayers, including entrepreneurs themselves.

Infrastructure is not authorship.

A road doesn’t build a company.

A university doesn’t create a business model.

An ‘ecosystem’ doesn’t ship a product.

People do.

Here’s the asymmetry Swisher ignores:

If you fail, the state still collects income tax, payroll tax, sales tax, penalties, fees.

If you succeed, the state claims moral ownership of the upside.

At no point does the state share downside risk.

That’s not a partnership. That’s rent-seeking.

You don’t “owe” someone who never co-signed the risk.

The real entitlement isn’t founders keeping what they built.

It’s the belief that the government deserves credit for success it did not create, risk it did not bear—while threatening those who can leave for daring to do so.

Entrepreneurs don’t owe California their wealth.

California owes its wealth to entrepreneurs.

Everything else is moralizing expropriation dressed up as gratitude.

I recommend watching “The Founder” this weekend. A great story about Ray Kroc and the origin of McDonalds.

Here is a special Non-consensus investing interview with the producer of that movie who himself is an entrepreneur.

The Opportunity In Geopolitical Tensions

Last weekend, Trump’s comments on Greenland made headlines, and this week, his focus has shifted back to Iran. 

On Friday, he said an American “armada” is heading toward the Middle East and that the U.S. is closely monitoring Iran’s activities.

Will we see an escalation? It’s hard to say. My guess is ‘Yes.’

But, one thing is clear. 

Geopolitical tensions are rising. And, countries are responding by ramping up defense spending. 

Global military expenditures surged by 9% last year—the steepest increase in over three decades. 

This rise in defense spending is directed toward military autonomy and AI. 

Nations are aiming to develop intelligent systems that operate independently.

Anthony Antognoli, executive officer of the U.S. Coast Guard, explained: “Our vision is to use robotics and autonomous systems as the foundation for Coast Guard missions.” 

He added, “It is impossible to carry out defense missions with humans and patrol cutters alone.”

These increased defense budgets are creating significant demand for defense tech companies. 

Venture capital has taken notice. In 2025, defense tech venture investments more than doubled compared to 2024, and this momentum is likely to carry forward as demand keeps increasing.

The bulk of this funding is concentrated in large, late-stage rounds focused on autonomy-driven defense firms. 

Companies like Anduril and its peer group are benefitting from these financing rounds. 

Those financings are only available to sophisticated private markets investors.

Lumida Ventures is also focused on investing in this category. We have had a string of investments across CoreWeave, Kraken, and Brad Jacobs QXO, and Canva.

Do reach out now if you want to be in the flow of our next deal.

If you are an accredited investor or qualified purchaser, sign up here to receive communications about our private deals.

Macro

Economic Growth Is Accelerating

This week’s data releases highlight an economy running hot. 

Markets oscillate between fears of growth slow down and fear of running hot.

We’re in the latter camp. And, you can see it in commodity prices and a 10-year and 30-year yields that are creeping up.

The GDPNow model tracks real GDP growth at 5.4% for Q4-2025, a clear step up from an already solid 3.8% in Q2 and 4.4% in Q3. 

Corporate profits continue climbing to record levels in line with GDP, and cash flows remain at all-time highs.

The higher profitability and cash flows are translating into increased investments in tech and people. 

You can see this in the latest labor market data.

Unemployment insurance claims are continuing to trend lower.

• Initial claims came in below 200K for two weeks straight.  

• Continuing claims have also dipped to 1.85M compared to 1.88M last year.

Companies are firing less, and the unemployed are finding it easier to get in new roles.

This is a significant development from last year. 

There are two reasons behind this. 

Companies have gained more confidence in the economy, and the air of economic uncertainty is clear now. 

Corporates are more comfortable with new investments, and bringing on new employees. 

We saw this in our bank’s earnings analysis last week, where corporate deals are expected to be at record levels in 2026. You can read it here. 

Secondly, companies are also still working through AI’s practical boundaries – they are starting to realize it’s transformative for many processes but not yet a complete substitute in others.

As a result, they’re gearing up to hire more workers to capture booming demand. 

It’s funny how we had recession fears until a few months ago.

The Reality Behind Slowing Wage Growth

Another talking point around this week’s releases was the flattening disposable income graph. 

With spending picking up, a flat income chart meant consumers were using their savings to fund their expenses.

News headlines directed it to worsening affordability and weakening consumers, but with PCE generally in line with estimates, the argument didn’t have legs to stand on. 

But, here’s what the graph doesn’t tell you.   

A part of the decline in wage growth is driven by Baby Boomers retiring. 

They are often highly paid due to their experience, and are now exiting the workforce in waves.

This pulls down overall wage growth and disposable income figures. That keeps a lid on inflation, too.

However, this doesn’t mean they aren’t spending. 

With over $85 trillion in net worth across the generation, they’re spending it.

Retail sales have come in stronger consistently, with red book retail sales rising 5.5% YoY in Jan. 

You can also see it in rising demand for luxury and affluent services. 

We covered Carnival Corp’s earnings in a recent newsletter, where Geoffrey T. Martin (CEO, CCL) said “Demand for cruise lines is proving far more resilient than traditional macro indicators would suggest.”

He also pointed to improved bookings at higher prices, suggesting more future demand. Read it here. 

Overall, the economy is running hot. 

Shifting Away From The US

On the global front, countries are stepping back from over-reliance on US dynamics amid ongoing tariff uncertainties. 

A standout example is Canada’s recent deal with China, and Trump’s response.

The trade deal allows up to 49,000 Chinese vehicle imports annually at just a 6.1% tariff—a sharp cut from the 100% duties they aligned with the US in 2024. 

In exchange, China reduces barriers on Canadian goods like canola (tariffs dropping to about 15% from 84%), seafood, and peas, while adding visa-free travel for Canadians. 

This move isn’t happening in a vacuum.

It’s emblematic of a worldwide trade realignment. 

The EU is advancing pacts with South America, Mexico, Australia, and India.

Mexico is renewing ties with Canada. 

Regions like ASEAN and India are forging new agreements too. 

The common thread? 

Countries are now pivoting to reduce vulnerabilities, reorient supply chains and diversify partnerships away from US-centric models.

This shift also reflects in equity markets.

International markets like South Korea, Japan, Singapore, and Brazil have outperformed SPY in the last 1 year. 

Each week, we find ourselves increasing our equity allocations.

This shift started with the 10-year bond.

US10Y used to be investors’ preferred flight to safety, but in the last 1 year, yields haven’t moved much despite global uncertainties.

We saw the opposite recently, when TLT fall by 1% after Trump’s comments on Greenland.

Now, Gold has become the popular ‘safe haven’ – you can see it in its price moves around any geopolitical headline. 

We see this diversification from US markets and into international equity markets continuing in the near term. 

I discussed the reasons behind it in Lumida’s Non-consensus investing podcast. Watch here. 

Around 30% of Lumida’s exposure now is in international stocks. We discussed some of our picks a few weeks earlier. Read here. 

DAVOS: REALPOLITIK IS BACK

Few days back, I wrote Carney was the big winner from Davos. 

He positioned himself as a deal maker and the leader of the Free World (ex-US). 

His intellectual ability is ahead of Macron and other EU leaders. 

His storytelling skills and re-framing of the ‘Workers of the World Unite’ story displayed a skill we just have not seen in global leadership. 

And, interestingly, Trump would agree agree with most points in this speech:

1) Multilateral institutions such as the WTO have failed

2) Supply chains are points of vulnerability

3) There are risks to ‘extreme global integration’

4) You cannot rely on one party for defense or energy

However, it seems like Carney flew too close to the sun.  

Now, Canada is unfortunately staring down the barrel of 100% tariffs from its largest trading partner…  

…or the consolation prize: a China EV deal in a world where consumers still prefer internal combustion engines.  

Here’s the rub.  

Carney is a gifted orator, but he overplayed his hand.  

Tariffs are taxes on people. Full stop. They land on households and businesses—not on abstractions called “countries.”  

Carney didn’t have to tax his own people. That’s the deal. A quiet deal.

There was no need to shout from the mountaintops a ‘deal with China’.

Trade happens between individuals and firms, not governments. 

Governments don’t create trade—they constrain it, distort it, or weaponize it.

Carney poked his hegemon neighbor in the eye at Davos.  

Carney chose a highly visible move over a prudent one.  

Ultimately, he let his ego get in the way instead of advancing the interests of his people. 

And that brings us to history.  

In the late 1930s, prior to Pearl Harbor, the U.S. didn’t stop Japan with speeches or appeals to shared values.

FDR cut off oil, steel, and trade.  

The  best oratory in the world can’t match military or economic coercion.  

This is the point of FDR’s, ‘Speak softly and carry a big stick?”  

In realpolitik, when push comes to shove, high-minded oratory doesn’t compete raw force —  whether through trade, capital flows, or threat of force.  

That’s not ideology. That’s reality.  

We are living in an age of realpolitik.   

(Was there any era in human history where we were not?)  

Canada’s neighbor is the world’s dominant hegemon.  

Did Carney seriously believe there would be no consequences?  

Now, If you are the hegemon—and you see the world forming trade alliances designed to exclude you —what do you do?

There is only one rational response:  

You respond swiftly.  

You move hard.  

You take the marbles while you still have advantage on the board.  

How does this play out?  

The United States is far more important in terms of trade, cultural ties, and capital flows than China.  

Trump wins this contest.

Carney overplayed his hand.

(Long-time readers now, we believe in the virtues of free trade and markets. I am not a fan of Americans paying taxes on Canadian imports. I’d like to see more trade between the US, Canada, and Mexico. I’m simply reading how I expect things to unfold. That’s our job.)

Markets

Software Is The New Restaurants

Last week, we wrote how software was approaching a major bottom and that we expected the turn to happen within about 2-5 business days.

The tape played out on Wednesday – IGV created a hammer, indicating buying pressure, and then, had two consecutive green days. 

Interestingly, IGV’s current chart coincides with prior instances of strong recoveries. 

IGV’s bounce after a decline below 200-DMA with RSI under 30 has followed solid recovery in all instances since 2017. 

See this chart. H/T Seth Golden

The recovery in IGV is backed by solid fundamentals.

SAAS names, like Hubspot have double-digit revenue growth, expanding user base and consistent cash generation. 

The recent downturn has also bought them to better valuations.

Speaking of Hubspot:

(1) Lumida signed a contract with them last month

(2) I expect Google or Microsoft will seek to acquire them. Google tried before but failed under the Biden FTC. Google’s stock price is high, and SaaS valuations are low.

I could see Mag 7 names go on an M&A spree.

Moreover, the narrative around ‘AI is eating SAAS’ is fading. 

Large companies are not ripping out their incumbent SaaS vendors to rebuild everything internally. 

Instead, they’re leaning harder into existing platforms for AI add-ons and functionality. This shows up in increasing retention rates and improved revenue per user across major SAAS providers. 

This tweet from Obsidian Capital sums it up.

We increased our exposure in software on Wednesday by adding to Salesforce (CRM), Hubspot (HUBS), Adobe (ADBE), and Duolingo (DUOL).

We did sell Atlassian (TEAM). We noticed their Share Based Compensation was excessively high. That doesn’t mean the stock won’t rally anyway, it probably does with the broader peer group.

We talked about them in our last newsletter. View here. 

The Gains Were Due For Meta 

Another recovery we saw this week was Meta. 

The chart looks fairly similar to IGV – trading below its 200DMA and RSI touching 30. 

Meta’s recovery began on Wednesday after it announced the plan to roll out ads on Threads.

Threads has become the fastest Meta platform to gain 100 million active users – it has outperformed most social platforms. 

Published numbers show active users on threads are now outpacing X – Threads has around 141.5M active daily users compared to ~125M on X.

The monetization plan is well timed. This is likely to act as a significant tailwind to Meta’s revenue, and will also give the stock a breather before earnings. 

Overall, Meta is one of the most exciting businesses worldwide – it has a user base exceeding 3 billion, generates some of the strongest margins in large-cap tech, with operating margins north of 40%.

It has a history of producing consistent revenue and earnings growth with reliable cash flows.

The growth engine is advertising, and AI is making it more powerful. 

Management disclosed that the annualized run-rate of its AI-powered advertising stack has surpassed $60 billion (30% of 2025 revenue).

Recommendation systems across Facebook, Instagram, and Threads are improving engagement, driving more time spent and better ad performance. 

Meta is still significantly underpriced in the Mag-7 land with a P/E NTM of 22.5x and revenue growth north of 20%. It is also one of Lumida’s 2026 picks. You can read our thesis here. 

Meta is set to report on Wednesday – optimistic reports on capex returns can send the stock soaring, but any misses on revenue, earnings, or capex guidance will hurt the sentiment.

The Bubble Around OpenAI

OpenAI is chasing a $50B funding round from Middle East investors at a valuation of $830B. 

They have previously raised $40Bn from Softbank last year, and if this $50Bn raise completes, that’s 90% of what they were aiming for in this round. 

The capital infusion is good news for semis, and keeps SMH moving. It has had a good run since Nov lows.

However, the fundamentals supporting OpenAI’s valuation remain questionable, particularly given its aggressive revenue projections. 

Sam Altman has suggested the company could reach $100 billion in annual revenue by 2027—an extraordinary leap from current levels of $13 billion annualized in late 2025.

This is only possible if they see lightning-fast monetization across early-stage products – not to forget they are competing in a market with Google and Meta. 

Google and Meta have durable cash flows, profits, and ecosystems that make adoption seamless – their AI models slot right into existing product suites.

For instance, Google users can use Gemini within Docs, Sheets, Gmail and other google products – users don’t have inertia in using already integrated AI.

Add to it, OpenAI’s weakening position in the competitive landscape. 

See this tweet from Jason. 

Note: Lumida recently switched the LLM that powers its Charting AI from OpenAI to Google Gemini’s Flash. We cut our costs by 50%. It took a few days to transition.

You can’t be sleeping well at night if you’re Sam Altman.

Simply put, OpenAI can’t command pricing power in an industry where competition is as good as them, or even better.

Moreover, OpenAI also sees headwinds in converting free users to premium models.

Users look at AI models as ‘web search’ – they don’t feel excited about paying for something as simple as a search. So, the pricing models used to project the $100M might not work. 

We are already seeing the signs. 

I predicted it back in Dec. 

With competition intensifying, and users’ preference for free AI models, OpenAI’s road to $100M revenue isn’t going to be easy. 

In my opinion, the bubble is in OpenAI’s $830Bn valuation. 

When will it burst?

Probably, when OpenAI launches its IPO.

Latin America’s Connectivity King

We extended our international exposure by adding América Móvil (NYSE: AMX) to our portfolio on Friday.

América Móvil is a dominant wireless and broadband services provider across Mexico, Brazil, Colombia, and beyond.

It serves over three hundred millions subscribers in Latin American markets, and projects consistent subscriber growth due to growing digital demand.

The company has maintained its market leadership for years, and recent quarters show the business is accelerating.

Management is delivering solid returns with strong postpaid subscriber gains (especially in Brazil), improving revenue trends, and expanding EBITDA margins even as they invest heavily in 5G networks.

Mexico remains the crown jewel in AMX’s portfolio, with leadership in coverage and quality that keeps customers upgrading to higher-value plans.

The shift from prepaid to postpaid is bringing better economics and stickier relationships.

What stands out is the cash flow story.

Free cash flow has surged recently, giving the company room to reward shareholders through consistent dividends and buybacks while steadily reducing debt.

The balance sheet looks healthier with lower debt, and improved cashflows. Management stays disciplined—focusing on network upgrades and selective opportunities rather than overpaying for growth.

The stock started a downtrend after hitting its all-time high of $23.7 in late November (its rally had a gain of 72% post-April Lows).

But, the stock seems to have capitulated now, with recent price moves indicating the recovery is real.

AMX trades like a reliable compounder that’s finally getting recognition as macro conditions stabilize in key markets.

The bear case is real but contained:

Currency swings in the region can create short-term noise on reported numbers, and any slowdown in economic activity could pressure the prepaid base or delay upgrades.

Debt levels, while improving, still require careful management, and occasional one-time items (like litigation) can pop up.

Yet the moat is wide—spectrum assets, scale, and market leadership make it hard for competitors to dislodge.

In a world hungry for steady cash generation and emerging-market exposure, AMX offers both without the hype.

Why chase crowded U.S. trades when you can own a proven cash machine riding structural tailwinds in accelerating geographies?

Lumida Curations

AI-Powered Fighter Jets are Revolutionizing Air Combat

AI-driven fighter jets eliminate the need for human pilots, enabling them to take on high-risk maneuvers to protect more valuable targets.

View Curation

The Future of Money Movement: Zero-Cost Transactions

Circle CEO explains how advancements in technology could reduce the cost of moving and storing money to zero, much like the evolution of data transfer and software publishing.

View Curation

Elon Musk on Aging: A Solvable Problem

Elon Musk believes aging is a problem that can be solved, suggesting that a synchronizing clock exists in our cells and that we could eventually discover ways to extend and even reverse aging.

View Curation

Meme

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