Welcome to Nofinity

Introduction

Mario Lochner reviews the week's events: After a massive AI crash (dead cat bounce?) and Leopold Aschenbrenner's hedge fund near-disaster (forced fire sale to Citadel), he asks whether stocks are now truly cheap. He himself bought on Thursday – four positions.

Winners and Losers of the Week

• Winners: Microsoft (+16 %, best day since 2008), Amazon (strong cloud numbers), Coca-Cola (new all-time high), Garmin, Chipotle, Lam Research, Seagate, Fortinet.
• Losers: Mercedes (-26 % profit, China -30 %), WiFer (AI cooling disappoints), Meta (weaker cash flow), Adidas (soaring advertising costs), Apple (services revenue misses), SK Hynix (despite record profits -10 % due to broad AI sell-off).

Bear Arguments

• Dead Cat Bounce: The recovery is only a dead cat; the next crash is imminent.
• China Threat: CXMT IPO +470 %, ASML threatened by Chinese DUV systems, Deepseek & Co.
• Rising Rates: Three Fed members already advocate a rate hike, bond markets signal inflation, CDS spreads of Big Tech rise.
• Debt Financing: AI investments are increasingly funded with debt (Amazon bond only 1.6x oversubscribed).

Bull Arguments

• Hyperscaler growth intact: Azure +43 %, Google Cloud +82 %, AWS +37 % – demand exceeds supply.
• Amazon's Investment Cycle: Two phases – first building data centers (no revenue for 2 years), then servers (break-even after 3 years). Most capacity is already under long-term contracts (5+ years).
• Morgan Stanley's ROIC Forecast: Own infrastructure + GPU leasing = 31 %, AI model provider with own infrastructure = 46 %, leased computing power = 25 %. Whoever owns the infrastructure will print money.
• Microsoft Copilot: 30 million paying users (+50 % in 3 months), order backlog $678 billion, cash flow $19.6 billion.
• Market Breadth: More stocks in the S&P 500 are participating – technically healthy.

Mario's Purchases

He bought four AI satellites on Thursday morning (July 30):

• Onto Innovation ($193.05)
• Cleanspark
• Marvel
• SK Hynix

Rationale: Retail investors sold individual stocks at the highest pace since COVID; leverage was massively reduced (JP Morgan: 55 % of April–May buildup eliminated). The momentum crash was one of the worst in 20 years – much steam released. No guarantee, but historically good odds.

Conclusion & Outlook

• Pack Ratio (valuation relative to expected earnings): S&P 500 as cheap as it hasn't been since 1995.
• Investment Ideas: Stick to your theses – don't chase new fads every week (e.g., China hype). Hyperscalers (Microsoft, Amazon, Alphabet) remain long-term anchors.
• Beware of volatility: leverage and momentum amplified recent moves. Strategic buying (e.g., with the guide 'SOS – How Pros Buy the Dip') is recommended.

Tip: Comment whether you expect a dead cat bounce or are already optimistic again.

Product Overview

The tested Nitro Brew is a portable, nitrogen-infused cold brew concentrate in single-use cartridges. Each capsule holds 20 ml (0.7 oz) and costs about $4 per cup (cheaper with subscription).

Ingredients & Discrepancy

• Calories: 15 per capsule – higher than typical black coffee.
• Ingredients per packaging: Coffee extract, ascorbic acid, potassium carbonate, mixed tocopherols (vitamin E), artificial flavors, sodium L-ascorbate, nitrogen.
• Contradiction with website: The site claims no artificial flavors, while the packaging clearly states them. The website image even shows garbled (possibly AI-generated) text that doesn't mention artificial flavors.

Preparation & Taste Test

• Preparation: Twist open, press down to release into 5 oz (148 ml) of water/milk – creates a foamy nitro effect. The ejection is quite vigorous but visually appealing.
• Flavor: Very dark, bitter, chocolatey – typical of dark roasts. When drunk black, it has a slight sourness (common for concentrates). Best with 4 oz (118 ml) water or oat milk for a rounder texture. The artificial flavor is noticeable to trained palates – an intense "capital-C coffee" taste.

Criticism

• Sustainability: Cartridges are not recyclable (no info on packaging). Even if recyclable, the effort to disassemble them on the go is unrealistic – they usually end up in the trash.
• Transparency: The mismatch between website and packaging regarding artificial flavors is misleading.

Verdict & Comparison

• Pros: High convenience (no refrigeration, TSA-friendly), fun nitro effect, decent for quick latte solutions.
• Cons: Mediocre taste, plastic waste, confusing labeling.
• Comparison: Similar to premium instant coffee packs or Cometeer (higher price but more sustainable and quality-focused).
• Best use case: Travel or camping rather than daily consumption.

Tone: Informative, honest, slightly critical – the reviewer enjoys the gimmick but remains objective about the flaws.

Comparison: Lamborghini Temerario vs. Porsche 911 Turbo S

In this video, the hosts compare the new Lamborghini Temerario with the Porsche 911 Turbo S. Two different approaches: the Lambo as a supercar, the Porsche as a sports car. Both are all-wheel drive and newly electrified.

Exterior Design

• Porsche 911 Turbo S: Classic yet refined design; appears slightly bulky but elegant.
• Lamborghini Temerario: Extravagant and aggressive, but criticized for overdone details and the exposed rear tire that kicks up stones.

Interior

• Temerario: Offers a hypercar-like ambiance, borrowed from the Revuelto; many carbon-fiber options, but expensive (e.g., floor mats for £450).
• 911 Turbo S: Ergonomically perfect, but loss of Porsche tradition (no twist start, no analog tachometer) and a cheaper interior.

Engine and Hybrid System

• Temerario: 4.0-liter V8 biturbo with three electric motors (two front, one in gearbox), 900 hp, but clunky hybrid integration.
• 911 Turbo S: 3.8-liter six-cylinder boxer with electrically assisted turbochargers and one electric motor in the gearbox, 700 hp; feels more electric.

Practicality

• 911 Turbo S: Large front trunk, tiny rear seats for emergencies, 400 km range and fuel-efficient (approx. 8.3 l/100 km).
• Temerario: Small trunk, no rear seats, only approx. 480 km range and higher consumption (approx. 9.8 l/100 km).

Driving Experience

• 911 Turbo S: Masterfully refined, supremely confident in any weather, instant power delivery – a joy to drive.
• Temerario: Nervous driving feel with tension between front and rear axles, less confidence-inspiring on wet roads.

Conclusion

• Porsche 911 Turbo S wins in almost every category (driving pleasure, practicality, price).
• Lamborghini Temerario impresses with spectacular design and hypercar interior, but not as a whole package. Potentially better if the hybrid complexity is reduced.

Summary of Nintendo Analysis (Value Investing Perspective)

The video creator analyzes Nintendo from a strict value investing standpoint. He emphasizes that despite strong brands (Mario, Zelda, Pokémon) and a solid balance sheet (no debt, lots of cash), the stock is currently too expensive to offer a real margin of safety.

Risk Analysis

• Cyclical Business: Nintendo is heavily dependent on console cycles (Switch 2). The stock is already 50% down from its peak, but the risk remains high.
• Valuation Errors: Many analysts (e.g., on Seeking Alpha) incorrectly report a P/E ratio of 5 because they fail to convert ADR shares (5 ADR = 1 Japanese share) properly. The real P/E is ~21, rising to ~30 next year.
• Currency Risk: Revenues in Yen are much lower in USD terms due to the weak yen.

Business Model and Moat

• Strong Brands: Mario, Zelda, Pokémon – loved across generations. However: "A moat can change – that's the nature of the industry."
• Financial Strength: $11 billion cash, no debt, solid operating cash flows. But dividend yield is low (~2%).
• Switch 2 Cycle: The new console brings a temporary revenue boost, but margins are shrinking (higher memory costs, pricing pressure).

Valuation and Conclusion

• No Hidden Value: The current price already reflects expected earnings from the Switch 2 cycle. There is no margin of safety.
• Speculation vs. Investment: The stock could rise short-term (as it did 12 months ago), but for value investors, substance is lacking. "Too risky for value investing, despite everything looking good."

Conclusion: Nintendo is a fantastic company with a strong moat, but the stock is not cheap enough for a disciplined value approach. Investors should be cautious and wait for a better entry price (e.g., near cash value).

Market Chaos in South Korea and AI Stocks

• The South Korean stock market (KOPSI) crashed 40% in July after surging 200–300%. This led to mass liquidations: an estimated 320,000 to 500,000 accounts (approx. 3.4% of South Korea's adult population) were wiped out.
• The trigger was the heavy use of leveraged single-stock ETFs on memory stocks (e.g., SK Hynix, Samsung), which made up over 50% of the market—a stark reminder of crypto market risks.

The AI Trade Unwinds

• Leopold Aschenbrenner, a 24-year-old AI whiz hedge fund manager, was forced to sell his entire public stock book after over-leveraging (allegedly 4x). His fund had previously grown from under $1B to $20B.
• Citadel (Ken Griffin) bought his portfolio, sparking speculation that this marks a bottom for AI stocks. The affected stocks rebounded sharply.
• This may signal a broader repricing of the AI value chain. Three scenarios are discussed:
  1. VR Scenario: AI fails to gain adoption.
  2. Railroad Scenario: Fundamental technology, but financial over-speculation leads to a bust.
  3. Airline Scenario: AI succeeds massively, but companies (OpenAI, Anthropic) fail to capture profits—value lies elsewhere.
• Current AI revenues are only $150B per year, while required CapEx is $2.5 trillion—a massive gap.

Crypto Shows Relative Strength

• Despite stock market chaos, crypto held steady: Bitcoin (+11%) and Ethereum (+22%) in July, while the Nasdaq fell 10%.
• The ETH/BTC ratio broke a four-year downtrend, hinting at a potential reversal.
• Uniswap (UNI) surged 37% to a yearly high, signaling a healthy Ethereum ecosystem.

Fed Policy Under Kevin Warsh

• At his first FOMC meeting, the committee voted 9-3 to keep rates unchanged (3.5–3.75%). Three members favored a hike.
• Warsh emphasized the 2% inflation target and left rate hikes on the table if inflation persists.
• Instead of rate hikes, the Fed is relying on Quantitative Tightening (QT) via balance sheet reduction. The 10-year yield hit 4.7%, the 30-year 5.2%—the highest in 19 years.
• This drains liquidity, pressuring risk assets like tech and crypto. If something “breaks,” the Fed may be forced to ease, benefiting crypto long-term.

Macro Outlook: Global Liquidity as a Crypto Catalyst

• Michael Howell (Global Liquidity Index) shows: A 1% rise in global liquidity historically leads to an 11% rise in crypto—4x the effect on gold.
• Global liquidity is currently declining, but when the Fed eventually capitulates, crypto could benefit disproportionately.

Regulatory Developments

• The Clarity Act (regulatory clarity for crypto) appears stalled. The probability of passage dropped from 40% to 26% (per Polymarket).
• SEC Chair Paul Atkins signaled he could provide clarity via regulation if Congress fails to act.

Ethereum Turns 11

• Ethereum launched on July 30, 2015. Its initial price of $0.33 has grown to nearly $2,000.
• A new Ethereum Foundation board member, Pasquale Caverzaschio (pseudonym), was elected. He is a privacy and security expert and part of the Seal 911 emergency response team.
• This is the first new board position alongside Vitalik Buterin and Aya Miyaguchi, marking a significant step in Ethereum governance.

Other News

• Robinhood reported Q2 earnings: Revenue of $1.3B (+32% YoY), but crypto revenue fell 38% to just 7.6% of total revenue. Its own blockchain (Robinhood Chain) generated $3.1M in fees in its first month.
• New York City published a database of names and addresses of property owners with homes valued over $1M—a mass doxxing condemned by Uniswap founder Hayden Adams.
• Balaji Srinivasan renounced his US citizenship and became a Singaporean citizen—a prime example of the “right to exit.”

Cyclical Analysis at the End of July

• The speaker analyzes historical Bitcoin price patterns in so-called "midterm years" (e.g., 2014, 2018, 2022) and compares them to the current situation in 2026.
• July has often been a relief month after a sharp drop in June. Statistically, July in midterm cycles has frequently shown positive returns (2026: +10.5%, 2022: +20%, 2018: +38%).

Parallels to Past Bear Markets

• The overlay of year-to-date returns for 2026 and 2018 shows striking similarities.
• In 2018, the July relief was followed by a renewed weakness as early as August. In 2022, the next downturn only began in mid-August.
• Reaching the bear market resistance band or the 200-day moving average is uncertain – neither was reached after the June low in 2022, while 2018 did reach the resistance band.

Macro Outlook: Bond Market as a Trigger

• A key indicator is the rise in the 10-year US bond yield – in previous cycles (2023, 2022, 2018), rising yields coincided with falling Bitcoin prices.
• The yield is showing an upward trend again, which could point to a correction in the latter part of Q3.

Seasonal Patterns and Trading Advice

• Historically, August and September have often been negative in midterm years (2022: -15% in August, 2018: negative in August/September).
• The likelihood of a renewed weakness phase within the next two to three weeks is high.
• The speaker recommends not trying to time the exact bottom, but instead using a dollar-cost averaging (DCA) strategy.
• A cyclical bottom is expected around November 2026.

Conclusion/Call to Action

• Reminder of the ITC conference (November 20–22 in Miami) with a price increase coming soon.
• Call to subscribe to the channel.