Why the Government Shutdown Matters for ETF Investors When the U.S. federal government shuts down due to a lapse in funding, many agencies furlough staff, delay operations, and slow regulatory processes. While trading continues on major exchanges, ETFs can feel the effects indirectly through:    •    Delayed SEC approvals for new ETF launches or structural changes.    •    Data release delays that can affect market signals.    •    Sector-specific vulnerabilities, particularly for travel, defense, and gov ...

Core Insights - The article emphasizes the importance of identifying high-potential investment opportunities before they gain mainstream attention, focusing on asymmetric risk-reward scenarios [1] - The investment strategy is centered around a 4-5 year horizon, allowing for the absorption of market volatility while aiming for significant long-term returns through disciplined capital allocation [1] Investment Methodology - **Leadership & Management Analysis**: Focus on companies with proven track records in scaling, smart capital allocation, and insider ownership, alongside consistent revenue growth and credible guidance [1] - **Market Disruption & Competitive Positioning**: Target firms with strong technology moats, first-mover advantages, and network effects that facilitate exponential growth in high-growth industries [1] - **Financial Health & Risk Management**: Prioritize sustainable revenue growth, efficient cash flow, and strong balance sheets to ensure long-term survival while avoiding excessive dilution [1] - **Valuation & Asymmetric Risk/Reward**: Utilize revenue multiples compared to peers and DCF modeling to assess value, ensuring downside protection while maximizing upside potential [1] - **Portfolio Construction & Risk Control**: Maintain a diversified portfolio with core positions (50-70%), growth bets (20-40%), and speculative investments (5-10%) to balance risk and reward [1]

Core Insights - The article emphasizes the importance of identifying high-potential investment opportunities before they gain significant market traction, focusing on asymmetric risk-reward scenarios [1] Investment Methodology - The investment strategy involves identifying high-conviction opportunities through leadership and management analysis, market disruption and competitive positioning, financial health and risk management, valuation, and portfolio construction [1] - Leadership analysis includes evaluating proven track records in scaling businesses, smart capital allocation, insider ownership, consistent revenue growth, and credible guidance [1] - Market disruption focuses on companies with strong technology moats, first-mover advantages, and network effects that drive exponential growth [1] - Financial health is assessed through sustainable revenue growth, efficient cash flow, strong balance sheets, and avoiding excessive dilution [1] - Valuation is based on revenue multiples compared to peers, DCF modeling, and ensuring downside protection with significant upside potential [1] - Portfolio construction includes core positions (50-70%), growth bets (20-40%), and speculative investments (5-10%) [1]

Market Outlook - Bitcoin is on track to disrupt gold, targeting a $20 trillion market [1][2] - Bitcoin is expected to be used for international transactions, representing another multi-trillion dollar market [2] - Bitwise projects Bitcoin to potentially reach $1 million by 2029 [2] Supply and Demand Dynamics - Current Bitcoin production is 160 thousand per year, while ETFs are buying 500 thousand [3] - The imbalance between Bitcoin supply and ETF demand is expected to drive price increases [3]

Core Viewpoint - Oscar Health (NYSE: OSCR) has seen a 21% increase since the strong buy rating, outperforming the S&P 500's 4% growth, indicating significant market interest and potential [1] Company Analysis - Oscar Health's valuation multiple stands at approximately 0.45x revenues, significantly lower than its peers at 3.19x, suggesting considerable upside potential [1] - The company demonstrates a proven track record in scaling businesses, smart capital allocation, and insider ownership, which are critical for long-term success [1] - Consistent revenue growth and credible guidance are highlighted as key factors in Oscar's operational strategy [1] Market Positioning - Oscar Health benefits from a strong technology moat and first-mover advantage, which are essential for maintaining competitive positioning [1] - The company leverages network effects that drive exponential growth, particularly in high-growth industries [1] Financial Health - Oscar Health shows sustainable revenue growth with efficient cash flow management, indicating a robust financial health [1] - The company maintains a strong balance sheet and a long-term survival runway, which are vital for navigating market challenges [1] - Avoiding excessive dilution and financial weakness is a priority for the company, ensuring stability [1] Valuation and Risk/Reward - The analysis includes revenue multiples compared to peers and DCF modeling to assess valuation [1] - Institutional backing and market sentiment analysis are utilized to gauge the investment landscape [1] - The strategy emphasizes ensuring downside protection while capitalizing on significant upside potential [1] Portfolio Construction - The investment strategy includes core positions (50-70%) in high-confidence, stable plays, growth bets (20-40%) in high-risk, high-reward opportunities, and speculative investments (5-10%) in moonshot disruptors [1]

Core Insights - Amazon's stock has increased by 14% since the last coverage, slightly outperforming the broader market [1] - The company's investment strategy is focused on long-term growth, particularly through its AWS segment, which has a backlog of $195 billion, representing a 25% year-over-year increase [1] - Amazon's revenue stands at $123 billion, indicating strong financial performance [1] Leadership & Management Analysis - Amazon has a proven track record in scaling businesses effectively [1] - The company demonstrates smart capital allocation and has significant insider ownership [1] - Consistent revenue growth and credible guidance are hallmarks of Amazon's management approach [1] Market Disruption & Competitive Positioning - Amazon benefits from a strong technology moat and first-mover advantage in various sectors [1] - The company experiences network effects that contribute to exponential growth [1] - Amazon has achieved substantial market penetration in high-growth industries [1] Financial Health & Risk Management - The company shows sustainable revenue growth alongside efficient cash flow management [1] - Amazon maintains a strong balance sheet, providing a long-term survival runway [1] - The company avoids excessive dilution and financial weaknesses [1] Valuation & Asymmetric Risk/Reward - Amazon's revenue multiples are analyzed in comparison to peers, alongside DCF modeling [1] - The company enjoys institutional backing and favorable market sentiment [1] - Amazon ensures downside protection while offering significant upside potential [1] Portfolio Construction & Risk Control - Core positions in Amazon's portfolio account for 50-70%, focusing on high-confidence, stable plays [1] - Growth bets represent 20-40% of the portfolio, targeting high-risk, high-reward opportunities [1] - Speculative investments make up 5-10% of the portfolio, aimed at moonshot disruptors with massive potential [1]

Investment Strategy - The company focuses on identifying high-potential winners before they break out, emphasizing asymmetric opportunities with an upside potential of 2-3 times outweighing the downside risk [1] - The investment methodology includes leadership and management analysis, market disruption and competitive positioning, financial health and risk management, valuation and asymmetric risk/reward, and portfolio construction and risk control [1] Leadership & Management Analysis - Proven track record in scaling businesses is essential, along with smart capital allocation and insider ownership [1] - Consistent revenue growth and credible guidance are critical factors for evaluation [1] Market Disruption & Competitive Positioning - A strong technology moat and first-mover advantage are key competitive advantages [1] - Network effects that drive exponential growth and market penetration in high-growth industries are prioritized [1] Financial Health & Risk Management - Sustainable revenue growth with efficient cash flow is a focus area [1] - Maintaining a strong balance sheet and long-term survival runway is crucial [1] - Avoiding excessive dilution and financial weakness is emphasized [1] Valuation & Asymmetric Risk/Reward - Revenue multiples compared to peers and DCF modeling are used for valuation [1] - Institutional backing and market sentiment analysis are part of the evaluation process [1] - Ensuring downside protection while maximizing upside potential is a priority [1] Portfolio Construction & Risk Control - Core positions (50-70%) consist of high-confidence, stable plays [1] - Growth bets (20-40%) are allocated to high-risk, high-reward opportunities [1] - Speculative investments (5-10%) are made in moonshot disruptors with massive potential [1]

Financial Data and Key Metrics Changes - Consolidated Q4 revenue grew 4% on a reported basis and 2% on an organic constant currency basis, with full-year growth of 3% on both reported and constant currency bases [11] - Adjusted EBITDA increased by $3.1 million year over year but declined by $35.5 million for the full year [14] - Gross profit dollars grew year over year in Q4 despite a 110 basis points gross margin compression [15] Business Line Data and Key Metrics Changes - At Vista, organic constant currency revenue grew 4% for the quarter, driven by strength in promotional products, apparel, gifts, signage, packaging, and labels [12] - Revenue in the promotional products, apparel, and gifts category grew 18% for the full fiscal year, with variable gross profit in that category growing 27% [13] - Business cards declined 6% during Q4, reflecting a shift from legacy products to higher value elevated products [12][13] Market Data and Key Metrics Changes - Organic constant currency revenue growth in European markets was strong at 7% for Q4, while North America improved sequentially to 3% [12] - The total addressable market in Europe, North America, and Australia exceeds $100 billion annually, with over 60% still served by traditional suppliers [9] Company Strategy and Development Direction - The company is transitioning to product categories like packaging, promotional products, and apparel, which are expected to offset the maturation of legacy products [5][6] - Investments in manufacturing, new product introductions, and improved customer experience are aimed at capturing market opportunities [6][10] - The company aims to close the equity valuation gap through revenue and profit growth, rigorous capital allocation, and share repurchases [10] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges posed by the transition in product categories but remains optimistic about future growth in gross profit dollars and customer lifetime value [5][10] - Guidance for fiscal 2026 includes expected revenue growth of 5% to 6% and adjusted EBITDA of at least $450 million, factoring in startup costs and capital expenditures [19] Other Important Information - The company expects to achieve annualized savings of $14 million from cost reduction actions implemented in the latter half of fiscal 2025 [19] - Currency fluctuations had a $3.6 million benefit to adjusted EBITDA during the quarter, primarily due to the strengthening of the euro [15] Q&A Session Summary Question: FY '26 guidance implies free cash flow conversion of EBITDA at 31%. When should free cash flow conversion return to the 45% to 50% level? - Management expects the 45% to 50% conversion rate to be achievable in a normalized environment, but fiscal '26 will not reflect that due to higher CapEx and working capital fluctuations [21][26] Question: What is the go-forward revenue growth expectation for legacy and elevated products? - Management does not provide specific growth rates but anticipates continued decline in legacy products while expecting growth in elevated products [28][30] Question: Is the 2% to 3% FX adjusted growth rate expected for FY '26 the new steady state growth rate? - Management aspires to return to mid-single-digit growth rates over time, driven by execution in elevated products and high-value customers [36] Question: Has maintenance CapEx increased due to recent investments? - Maintenance CapEx has increased due to specific factors, but it is not solely a result of recent investments [39][42] Question: What is the risk that the informational product exemption ends? - There is some risk associated with the informational materials exclusion, but the company has a significant percentage of coverage under USMCA [50][52] Question: Do you think there was a pull forward in demand during Q4 due to tariffs? - Management has not seen indications of a pull forward in demand related to tariffs [54] Question: Can you explain the other income net line item and the impact of derivative contracts? - The company has an active currency hedging program that results in unrealized gains or losses, which can affect earnings but is expected to balance out over time [60][62]

Investment Strategy - The company focuses on spotting high-potential winners before they break out, emphasizing asymmetric opportunities with an upside potential of 2-3 times outweighing the downside risk [1] - The investment methodology includes identifying high-conviction opportunities through leadership and management analysis, market disruption and competitive positioning, financial health and risk management, valuation, and portfolio construction [1] Leadership & Management Analysis - Proven track record in scaling businesses is essential, along with smart capital allocation and insider ownership [1] - Consistent revenue growth and credible guidance are critical factors for evaluation [1] Market Disruption & Competitive Positioning - A strong technology moat and first-mover advantage are key competitive advantages [1] - Network effects that drive exponential growth and market penetration in high-growth industries are prioritized [1] Financial Health & Risk Management - Sustainable revenue growth with efficient cash flow is a focus area [1] - Maintaining a strong balance sheet and long-term survival runway is crucial, along with avoiding excessive dilution and financial weakness [1] Valuation & Asymmetric Risk/Reward - Revenue multiples compared to peers and DCF modeling are used for valuation [1] - Institutional backing and market sentiment analysis are considered to ensure downside protection with significant upside potential [1] Portfolio Construction & Risk Control - Core positions (50-70%) are allocated to high-confidence, stable plays [1] - Growth bets (20-40%) are high-risk, high-reward opportunities, while speculative investments (5-10%) are aimed at moonshot disruptors with massive potential [1]

Market Trend - Bitcoin is consolidating at $117K after a strong run-up [1] - The real estate market is valued at $400 trillion [1] Bitcoin & Real Estate - In 2017, a median-priced house in the US cost 24 BTC [1] - Currently, a median-priced house in the US costs only 4 BTC [1]