What Couch Investor said in this video:
- Recession RiskneutralThe host argues that Ray Dalio's warning of a US debt crisis within three years should be taken with a grain of salt; past deadlines have passed without a crisis, and while the US debt problem is real, nobody knows when or what will happen.Source
- ValuationneutralThe host disagrees that AI-linked mega caps are very expensive; not every AI-linked mega cap is very expensive, except when focusing only on price-to-free-cash-flow.Source
- OtherneutralAlthough credit spreads are widening and rising yields have narrowed the cushion, earnings are still growing, not shrinking; a narrow cushion is not a vanished one, so it is not the end of the world.Source
- AI Capexneutrallong-termHeavy AI capex is not automatically wasted money; most large AI spenders fund capex from existing operating cash flow rather than new debt, and as long as return on invested capital stays above the cost of capital, it makes sense to keep spending.Source
- AMZNneutrallong-termAmazon's return on invested capital rose into 2024, dipped through the capex ramp, and should be improving from 2027 onwards.Source
- GOOGLneutrallong-termAlphabet's return on invested capital was already super high and should still hold close to 30%.Source
- MSFTneutrallong-termMicrosoft's incremental return on invested capital should be about 23 in 2027 and should rebound towards 60% by 2030; Microsoft is also the only one of these companies expected to remain free-cash-flow positive.Source