Ideas Dinner (Pro and Institutional Members) – July 21, 2026

Welcome everybody to our Long Ideas Dinner Meeting. These are some of our very best events and product services. This meeting is a great service to everybody on the professional membership. We have some really great ideas, all-time great stock pick ideas that have come out of this, and just great discussions. around how to use our models, how to get the most out of the website, how to use reverse DCF, some of the really sophisticated, more complex stuff. We do a great job of deep diving in this setting. So glad to have you here. So yeah, Kent was emailing me earlier this week about the PayPal takeover. And Kent, I think you wanted to get a sense of whether or not This was a good deal for PayPal, and I think I've got to take a look. From Wall Street favor to unwilling merger, Tarbick. What's to expect from PayPal? By the way, anyone else who got questions, put them in. Kent emailed me last week. I wanted wanting us to do a little bit of a deeper dive on PayPal and this proposed merger takeover. A fifty-three billion dollar offer to be taken private by rival. Upstart rival Stripe. Okay. And buyout shop Advent. That's $60 a share. So is that enough? The stock's at $56. And I think the one easy way to look at this is let's look at— let's do a little bit of breakdown on the no-growth value of PayPal. I'm going to look at the economic book value section. So the no-growth value PayPal these days is $67 a share. And what did they say they wanted to offer? $60? Yeah, that's a substantial discount. I guess the answer is to whether or not that's a good deal is what you think about the growth prospects for PayPal. And I don't know enough about the space for sure to speak to intelligently. PayPal has been pretty ubiquitous for a long time. I guess Apple Pay on phones is doing well. You can pay on Venmo. It's a pretty cool tool. But I know, I get the sense in some meetings I've been in recently with some other technology firms that payments are going to be one of those things of the past, kind of like stock trading in the past, like the old 48 Hours, the Eddie Murphy movie, I'm blanking, when they're writing the tickets, like how that used to be and how they used to be floor traders. In the same way that those are going away, Trading Places, come on, how could I forget that movie? It's one of my favorites. But in the same way that sort of non-electronic trading has gone away, I feel like, man, what's that difference between a stock trade and a financial transaction? They're both financial transactions, but sending money, sending payments, the price of trades has gone too close to zero for, in a lot of places, stock trades. And I just don't know that they're going forever. If we're going to be forever in a world where people make money charging you to transfer your money to someone else, is it fair? Right? Because if I just give them $5 here in person, I don't have to pay. I could mail them a check, don't have to pay anything. Could do an ACH payment. I don't think those cost anything. So why am I paying someone for the privilege of Having access to my money. We know there's float involved in the— and sometimes like with banks, like that's the biggest ripoff. A big wire transfer, biggest ripoff. Both parties get charged a fee and they take a couple of days. I know in our CRM system and sales system, we issue a refund and it sometimes takes up to 2 weeks to show up on the credit card statement. So thinking about PayPal, they're going to a business that eventually has zero Margins? I don't know. Maybe the no growth value or maybe $60 is a good deal. Stock price is $56, a little bit of a discount to that already. So yeah, I think it leaves in your existential sort of thoughts on what's going to happen to payments in the payment space. Is it going to go to zero? I think it's fair to say that it would. I typed PayPal into the ratings page, hit ratings breakdown. I scroll down to the economic book value section. And we can see here economic book values, $54, $37, $42, $49, $64, up to $67 a share. They're offering $60. The stock's at $56. $56 a share implies about a permanent 15% decline in profits from here. I'd say $60 a share is probably about a 10% decline in profits. And if you believe that the payments base long-term is not going to be one where fees are charged for transferring my money from one person into another, then maybe $60 a share is a good deal, especially when the stock's at $56. I think it makes sense to consider, to think about the world in a way where they're just really not that much. They're just more and more. You got, you got Zelle. There's so many ways to pay. And so I think that Yeah, I don't know any any other thoughts on that. All right, let's talk about another long idea we we put out here recently because I'm wondering what I'm missing. Valero, another refiner. So these refining stories are really attractive. So we looked at H.F. Sinclair, Dino, Par Pacific. These are some of the few U.S. crude refiners. Left in the world. And the number of refineries has been going down for a long time. The amount of capital required to build a refinery is so large, we don't think anybody's going to build anymore. But as long as gasoline demand, fossil fuel energy demand isn't falling through the floor the way sort of the boo birds, the greenwashers have been saying, then these stocks are cheap. And I just wonder if we're missing anything. In fact, I think when we wrote this, it was $298. That price implied, that price implied a 40% decline in profits. So jet fuel, diesel fuel demand for both of those is still going through the roof. It's high and strong. Gasoline softening, but it's not going to go negative anytime before 2030 according to the EIA. Rising demand for jet and diesel fuel. Those are still going strong. The International Energy Association projects jet and diesel fuel to grow through 2030. Jet fuel won't peak until the late 2030s. And just because it peaks doesn't mean it's just falling off a cliff. It just— these things kind of move like they're not in terms of demand. Another thing to keep in mind is that as we continue to see the rest of the world matriculate into the, the undeveloped or underdeveloped into the developed world. Those folks need cheap fossil fuels in order to climb the economic ladder. People that are living in huts with dirt floors are not thinking about how they're going to buy a Tesla or use alternative greener forms of fuel. They're going to do whatever they need to do to get food on the table. They're going to take the lowest cost energy. And by the way, That's good for the world, that we help raise the rest of the people, the less prosperous people. It's good for the world for them to do that in the cheapest way possible. It's the ultimate let them have their cake sort of diss of people to be like, oh no, you should have to pay more for fuel and energy and cost of living than we did when we became rich, because we've decided that those things we did were not good. And anymore. Not for you. Good for me. Make me rich. Not for you. It's kind of silly. So that's going to keep a demand for oil and gas for a long time. And by the way, how many of the— a lot of these electric charging stations, what's fueling those most of the time? Not most of the time, but a significant amount of the time. Anybody know? Where are they getting their electricity? Coal. From diesel generators. So anyway, I want to talk about this long idea. Can anybody poke any holes in this for me? What are we missing? Dino's been a good stock for us for a while. I think it was on the focus list and off and back on. It got cheap. Yeah, refineries been shrinking a lot for just the last 6 years and then beyond that since the '80s. Any comments on Valero? What am I missing here? You guys all agree because it looks like a really strong long idea to us. Same is true for Dino. Why don't we put these into a portfolio? Call it US ODE. And let's go take a look at these guys. VLO, DINO. P-A-R-R. Very attractive. 0.6. 0.6. Dino, maybe people were— oh, Ryan Mitz. I posted on Circle about that. Let me go check out Circle. Do you remember which one it was? See here. Posted about the EV power. Oh, you mean about how so many of the electric vehicle charging stations? Yeah. Ryan, fair point. I may have gotten that from you. But I think I've heard from a couple of spots, a couple folks before. That, yeah, they're the big diesel generators back there powering these electric charging stations. And so it's all just, we really, those of us, those folks who like to want to virtue signal are maybe not quite as virtuous as they think. Ryan said climate will unravel. Say more about that. Do you mean the climate is going to implode and we're gonna have one of those movies situations with like tidal waves and major storms flooding New York, or that everyone's going to realize, hey, the climate's really not that big a deal. Everybody else feel free to jump in the chat there. So yeah, Ryan agrees with the Valero thing. He's heading to his computer maybe. I guess he's on his phone. Yeah. Any other thoughts on Valero or Dino or Par Pacific? Yeah, this stock's had a good run. When did we publish on this one? Profits for the Long Haul. Yeah, it was back in May, end of May. So right around in here, bam, gone up. I don't know sometimes how big our institutional following is, but sometimes I see stocks we publish and it happens pretty fast. I wouldn't be surprised if there are some big funds who are following us and Acting pretty significantly on these long ideas, because these long ideas are—I think we do good work here. And obviously, look, we're friends. You guys know me. Most of you guys have known me for a long time, and you know I'm open. You see some holes in anything, any of these reports, please let us know. I appreciate those a great deal. I want to know when we're wrong, and because we really try to do a ton of diligence, we really try to dig hard into. Okay, what's wrong with this story? We spend as much time— I tell my guys, listen, we need to be— we need to know the bear case as well or better than all of the bears. Because if we don't, it's like driving a car without headlights. It's, oh, I just love my long idea. Everything's going to be fine. I'm not thinking about what the bad things are. No, you need to think more about the bad things. And most of the time, if you do have a really good idea, when you lean in to the bear case or On the opposite side, if it's a danger zone and we lean into the bull case, it makes your idea stronger when you can speak to all those things. Oh, this is what they're thinking? Let me tell you why that's not the case. And it often makes us think, help us really fortify our thesis and say, here's what's going to happen. And here I think we got a comment about CapEx on Valero. And we talk a little bit about that because they are growing and look, their utilization rates are great. I don't know if they need any CapEx. They're operating at pretty much maximum efficiency and expected to in the future. Yeah. They don't need to lift a finger. They don't need to. And they're also in that great position where they get this special— they can acquire cheap feedstock that's not getting pinched by the global issues and sell the refined product at an elevated price. Supply constraints, same, rising demand, investing in renewables. So they've got some renewable capabilities that are going to allow them to have growth even outside of traditional Crude oil refining. Yeah. Thanks, Ryan, for sharing that stuff. Yeah, that's what I thought you meant about it will all unravel. I'm pretty sure that you mentioned that. Yeah. By the way, anyone who doesn't read Ryan's posts on the community, you are missing out. This guy is one of the most— we think we do good work, right? Ryan has made a lot of posts, but they're like the diligence behind it is second to none. This one, we, I think, I don't remember seeing this one. This was great. AI showed off a DCF analysis of Uber. His DCF analysis led to an implied valuation of $9,000. Yeah. Yeah, Ryan, it's pretty funny, man. We are always singing from the same, or reading from the same playbook, singing from the same page. Because yeah, the AI stuff is confident idiot. Yeah, it's amazing. It's amazing. I find this with a lot of our clients. Once you've been behind the curtain and once you've been a part of new constructs and how things really work. You really start to notice the facade, the falsity, the propaganda, and so many other parts of the business because you've seen how it works. For example, just talking about this, like how it's good, how we show in our reverse DCF analysis the past cash flows and the future cash flows. This is a great example with Valero here. Right. So here's notepad in the past. Here's what the current price implies. Permanent decline. And this, a great point that Kyle made here is we put this in here around, yeah. So IA projects refined product demand will be 2% higher, even though profits will be 40% lower. So demand, by the time it generates the cash flows here to justify 292%, will be higher, not lower. So these charts are great, folks. In fact, I just had a meeting with another— with a prospect actually today. We go, why don't we do this with PayPal? PayPal's not as much fun. Let's do it with— we'll do it with CCJ, this uranium company. So I did a reverse DCF with this prospect today. And it was really interesting because when you looked at the implied future profit growth for this uranium company— and by the way, we all know what's happened with uranium companies— this one has been down recently, but it's up huge in the last few years, and it's gotten expensive. 8.0 price-to-economic book value. That's more than Nvidia and Apple combined. Right, so it's expensive. And the interesting thing here is when, when I had to create this optimistic scenario for this uranium company, you really had to put in some pretty wild results, folks. Let me show you what I mean. So consensus has these numbers. I had to double consensus for the most part. And push that out to 10 years. Let's just see what happens. We drop to 20, and then margins better than they've ever been. Tax rate stays the same. Capital utilization super low. Ryan, where you been, man? I missed you. You guys better get it. You got to be reading some of his comments here. Reverse DCS provide what a financial advisor provides to many investors: emotional support and reasoning. Yes. This is the bedrock. This is why I always say, look, fundamentals don't need to be 100% of what you do, but they shouldn't be zero. And as long as it's not zero, then if you're looking at fundamentals, you got to make sure the numbers are right, my friends. Right? So, here's our optimistic. I tweaked it a little bit. 20, I knocked it down a few percent. But the huge improvement implied. And the cool thing we do, I don't know if you guys know about this, on the institutional side, you scroll down here and you can do before-after for revenue and free cash flow. So look, revenue in the past, right? It's gone up a little bit. This is pretty significant. That's what it looks like when you do a 22% CAGR for 13 years. That's a long time CAGRing. I encourage you to run some little DCFs on your own and say, hey, if I put $1,000 into this company and it CAGR'd at 22% for 13 years, how would I look? You're going to be like, okay, that's a big number. And here's what happens with NOPAT. And it's, it's, you got to keep in mind scale here. You're talking about $7 billion compared to $500 million. This is crazy town. That's what's priced in. So my, my buddy, my prospect was like, yeah, uranium. I'm like, yeah, but maybe it's stocks don't always keep going up, but maybe it's reached its limit here. Show the old 30-second clip from Kyle explaining the DCF, but no one knows what a stock price implies. Man, I don't know which one you're talking about. Why I'm not in NVIDIA. Oh yeah, man, we've got, we got a ton of reverse DCFs on NVIDIA. There's a section in the community, folks, if you don't know about it. How do I go back to that? Reverse DCF case studies. If you guys are not familiar with this section of the blog, you need to, and you care about reverse DCFs. Case studies, just you love it. Yeah, you're right. Nobody knows what a stock price implies. Nobody's doing this work. You know why? You know why this is suppressed research? Like new constructs. When we go to see a big firm, a millennium big firm in India or whatever, like big hedge funds, they've got all these research people and they're crunching data and they're fixing the numbers. And they don't need a rating service because they got their own. That's good. It's all good, right? These people are terrified of us because we've done it and we've done it better. And it's not based on FactSet data, it's based on our own better data, proprietary data, better. And then we've got better models. They haven't built a reverse DCF model like ours, not even close. And Wall Street doesn't want this to be out there. Most of the big funds are populated or employ people who don't want new constructs to exist. When we were talking to Thomson Reuters back Back in the late 2005, 6, 7, 8, 9, their people were terrified of us. The senior people were like, yes, we need to do this deal. Why don't you meet with our guy who runs operations in India? I remember that guy and he was like, yeah, David, yeah, don't visit India because I might have to kill you. They don't want people to know. They don't want there to be a technology that's going to destroy their job. This guy was running 2,000 people in India. He's a big operation. They're pulling out data. I could do it with 20. Better, faster, plus footnotes, way better taxonomy, ontology, all that. People know what they're doing. Anyway, that's why what New Constructs is special for you guys that are in here, especially if you've been for a long time. You got something no one else has. It gives you a big advantage. So this reverse DCF case studies, did I put that in here? Yeah. I don't know about the one Kyle did. Oh, he's been in scraping hell fighting bots. Okay. I'll look for your testing. We've been, I think you were a beta customer a long time ago, so we'll be happy to hear what you say about FinCENs. I will tell you that FinCENs is, it's only as good as Gemini, so we can't, I, I, trust me, man. I, I beat on the Google people a lot on FinCENs. And I, I, they were like, I gave them all these golden prompts. You know what a golden prompt is? It is a prompt. that has a very specific one version of the truth answer. So I'd say, hey, here, I get probably, I don't know, 250, 500. Here's a prompt. Here's what the answer should be. So the AI doesn't really have to do any work. And then we gave it a bunch of sort of variations on that where we also supplied the SQL query or the machine database lookup that would give the answer. Again, another kind of golden prompt. Hey, we don't need AI to reason. We just needed to do what our website would do, but in the form of answering a question. And that would work 3 out of 5 days. It would work 1 day and I'd say, yeah, this is great. Let's move on to the next thing. And they'd say, okay, go test this. And I'd be like, all right. Yeah. I'd go test it and it wasn't working. And then the stuff that worked yesterday didn't work either. And I'd say, what the heck is going on here, guys? I can't keep pushing the same rock up the hill. This is not fair. I'm doing all this work. I'm giving you 100 golden prompts. We're teaching the machine how to teach itself. This should be a no-brainer. And they finally came back after a few weeks and said, oh yeah, the guys back in the lab that control the underlying AI, they made some changes and that screwed up our code and they didn't tell us about that. And by the way, that's gonna keep happening and keep happening. All right. But it's never going to work as built. Oh, I think I remember you saying something like that. I'll be interested to take a look at it because our stuff is really pretty simple in Gemini. We uploaded a bunch of our data to them, tons of it, basically all the answers. And we said, all we want FinCEN to do is be able to look this stuff up just like this and do it in the form of a question like, which companies have the highest ROIC and lowest gap? In the materials sector. And it's just supposed to do that. But, and it's only on New Constructs data. So we're not out there searching the internet to get answers to anything. It's exclusively on New Constructs data. So there's no hallucinating. Though, yeah, that's exactly right. We are all deterministic. There is no RAG or inference in New Constructs and Finsight's AI. Not needed. All the answers are there. Maybe there are a few questions you can ask that are, you can maybe get it to infer, but that's pushing it to the limit. Not really into that. Okay. I don't know how you see the logs, but hey, you're a smart guy. All right. Any other questions? We're up against 30 minutes here. Email me anytime, folks. Happy to talk. Kent, thanks for the question about PayPal. I hope I gave you a good answer there. If you guys have any objections or concerns about Valero, please let me know. Same is true with other long ideas. We've got a— I don't know if you guys— hope everybody saw the SpaceX IPO report and the work we did about that and being added to the indices and how being added to an index is typically a bad thing. We crushed it on that one. Dino, we crushed it on. I don't know if you guys paid attention to Crocs. That's done really well. Long idea. Anyway, I appreciate you guys. I love these meetings. These are the highlight of my month. We might have to make these twice a month. If you guys know any other pro members, tell them to show up because every single pro member should be on this thing. This is like one of the best things we do. All right. Thanks, y'all. See ya.