Sunday, September 13, 2026

Kalshi is seeking approval to launch the first regulated perpetual futures tied to single stocks, roughly 60 of them on large companies and ETFs. Coinbase has filed paperwork to do the same. Perps let traders bet around the clock with heavy leverage and no expiration date, a product that already exploded overseas on crypto venues like Hyperliquid. This is the next step in a race to sell retail ever more exotic ways to gamble on stocks.

For the platforms this is a genuine growth engine, adding a high-margin, high-volume product on top of prediction markets and crypto. The read is that the exchanges and infrastructure win here, while the traders using 24-hour leverage on a single stock mostly lose.

The broader signal is about the market itself. When the hot new product is unlimited leverage with no expiry on Nvidia, late-cycle speculation is running hot, which is worth remembering when sizing risk elsewhere.

A structural tailwind for the exchanges (Kalshi, Coinbase) building exotic retail trading, and a red flag for froth.

Bending Spoons, a debt-funded Milan serial acquirer of fading software (AOL, Evernote, Vimeo), went public in July and now carries a $28bn value, about 14 times revenue and over 100 times earnings. Management steers investors to adjusted figures that add back amortization, which is the very cost of the acquired customer bases wearing away. On that adjusted basis 2025 net income was $402mn; on a real basis it was a loss.

The tell is net revenue retention below 100%, meaning last year's subscribers are worth less this year. Evernote's revenue rose 30% since 2022 even as its user count fell 48%, growth bought entirely through price hikes on a shrinking base. That is a melting ice cube dressed up as a growth story, the same trick Valeant ran with drug patents a decade ago.

When a company built on buying declining assets asks you to ignore the cost of those assets declining, the honest question is what is left once the price hikes run out. This is a name to avoid outright, or to treat as a short candidate rather than a compounder.

Avoid, or fade: the adjusted numbers hide melting assets, the classic roll-up warning sign.

Barron's screened for financially strong companies that can double earnings by the end of the decade, trade at sensible valuations, and have next to nothing to do with artificial intelligence. The eight names span sectors: Royal Caribbean, BioMarin, Eli Lilly, Five Below, Smurfit Westrock, Charles Schwab, Planet Fitness and Take-Two. The case does not depend on AI failing. It rests on the danger of a portfolio drifting into one crowded theme.

The individual stories are concrete. Eli Lilly's free cash flow could climb from just under $10bn to over $50bn by 2030 as GLP-1 coverage widens. Charles Schwab just posted 21% revenue growth and a 42% jump in earnings as the drag from "cash sorting" fades. Take-Two has the next Grand Theft Auto launching in November after years of paid-up development. Several, like Planet Fitness (down 54%) and Smurfit Westrock, are cheap because of fixable, self-inflicted stumbles rather than broken models.

Treat these as a menu of candidates rather than a ready-made portfolio, a way to add ballast that does not rise and fall with the AI trade. The shared risk is a genuine economic slowdown, since a few of these lean on the discretionary consumer.

A ready diversifier for an AI-heavy portfolio: buy quality compounders trading at reasonable multiples.

With Brent above $100 on the Iran war, the smart way to capture it is to own the companies handing back the most cash rather than to guess where oil settles. Barron's highlights large caps like Targa, EOG, Cheniere, Chevron, ConocoPhillips and Exxon, whose dividends plus buybacks lift total shareholder yield to 6.3%, more than double the S&P 500. The large-cap group trades at 16.5 times earnings against the market's 19.5. The oil curve implies prices stay above prewar levels until 2031.

The deeper-value angle is Canadian oil sands. Fund manager Cole Smead argues the space is still underowned after a generational low in 2020, and now consolidates and returns capital through buybacks rather than chasing growth. He values companies on reserve life and enterprise value per flowing barrel: Strathcona has one of the longest reserve lives in the industry at 47 years, and Cenovus around 28. As production rises into 2027, each added barrel is worth far more than it costs to bring online.

The obvious risk is symmetric with the thesis: if the Strait of Hormuz calms and oil falls back toward the $60s, the near-term earnings tailwind fades. The cushion is that these stocks never priced in $100 oil. The cash is being returned now regardless.

Own the energy names returning the most cash: high total-yield majors and deeply undervalued Canadian oil sands.

European companies grew earnings 16% year on year in the second quarter, the strongest in three years. Yet the Euro Stoxx 600 is up only 7.9% against the S&P's 11.9%, and trades at 16 times forward earnings versus 20 for the US. KKR's Henry McVey sees a structural shift as Europe emerges from negative rates and Germany unleashes nearly a trillion euros of military and infrastructure spending. Investors crowded into US AI are barely positioned here.

Financials are the core of the trade, with three times the index weight they carry in the US and most of their profit tied to net interest margins that rise with rates. There is a concrete catalyst too: prompted by the Draghi competitiveness report, a wave of cross-border bank mergers is starting, led by UniCredit's move on Commerzbank and Bawag's all-cash deal for Ireland's Permanent TSB, with roll-ups that push returns on equity toward 20%. Beyond banks, managers favor scarcity brands like Hermès and Ferrari and the mining-equipment makers Sandvik and Weir that sell the picks for the copper build-out.

A broad way in is the iShares MSCI Europe Financials ETF; the stock pickers add DNB Bank, Bankinter, Hermès and Ferrari. The risk is politics: French and German elections this autumn and an unresolved Iran war could inject volatility before the value is realized.

Diversify away from US AI names into European banks, luxury and industrials, where value and a real catalyst meet.

The smartest capital on Wall Street is chasing the same unglamorous asset: insurance. Insurers are giant, complex pools of premium capital. To a private-equity firm that is permanent capital that does not need to be raised fund by fund. Apollo built a powerhouse around annuity writer Athene. KKR, Brookfield and Third Point have all bought insurers. Bill Ackman just acquired specialty insurer Vantage to build his own Berkshire, and Brookfield wants to grow its property-casualty arm more than tenfold.

The mechanism is the "Bermuda Triangle": annuities funded into higher-yielding private credit, backstopped by offshore reinsurance, which lets these firms pay top rates and still earn a spread. Done well it is a durable earnings machine; done badly it is a web of opaque, affiliated deals. Mark Walter's Guggenheim and TWG are under federal investigation over loans that allegedly should have been classified as affiliated, a reminder that complexity cuts both ways.

The read is to favor the disciplined, transparent operators, Apollo, Brookfield, and the Berkshire-style names Markel and Fairfax, and to treat any insurer whose structure you cannot explain simply as a warning rather than an opportunity.

Own the disciplined compounders (Apollo/Athene, Brookfield, Markel); steer clear of the opaque, over-engineered ones.

Walmart had its worst day in nearly five years after its August report, and it is still down on the year. Yet the quarter was better than the reaction suggested: the company beat and raised full-year guidance, kept gaining market share, expanded margins and funded $3bn of buybacks. US comparable sales did slow to 2.6% into a plush multiple that left no room for disappointment. That reset now leaves the shares near 33 times earnings versus a five-year average of 35.

The bull case is the mix shift. Walmart's high-margin businesses, Walmart+ membership and advertising, are compounding fast, exactly the tech-retailer model it laid out a decade ago. It is also using its tariff refunds to cut prices, which should drive traffic and share gains. Analysts see a path to $132, roughly 25% higher. The stock also has a long record of holding up in downturns, gaining 18% in 2008 while the market fell 38%.

The near-term drag is real: the energy spike squeezes Walmart's lower-income shoppers and raises its own costs, so the revival may take a few quarters to show up.

Buy the selloff: a dominant, defensive retailer with fast-growing high-margin ad and membership income.

The traditional job of long Treasuries, to cushion a stock portfolio, has quietly stopped working: long-dated Treasuries are underwater over ten years. Bank of America warns they no longer diversify the way they used to. With the ten-year near 5% and US debt past $40 trillion against a $2.1 trillion deficit, the risk is that fiscal pressure keeps long yields high rather than letting them fall in a crisis.

Rather than reach for the longest Treasuries, the case is to spread the safer sleeve of a portfolio across categories that pay more and behave differently. Emerging-market government bonds yield about 6.2% and double as a currency hedge. Fallen-angel bonds, recently downgraded to junk, have historically outperformed and yield 6.8%. AAA-rated CLOs add yield with a clean crisis record. BofA notes that since 1945 a mix of stocks and commodities beat stocks and bonds by over a point a year. Commodity funds have made 53% this year as oil surged.

None of these are a full substitute for cash-like safety, so size them as add-ons. But with the government running large deficits into a high-rate world, a single long-Treasury bet is the position most exposed to being wrong.

Replace long-bond ballast with a mix of emerging-market debt, fallen angels, AAA CLOs and commodities.

Shares of DraftKings and FanDuel-parent Flutter have been hammered, down 31% and 53% this year, on fears that prediction markets like Kalshi and Polymarket will eat their lunch. But the setup into the NFL season is more balanced than the prices imply. Analysts expect $35bn wagered on football through traditional sportsbooks, with prediction markets taking in roughly the same, so the pie is growing fast rather than simply being split.

The overlooked positive is regulation. The NFL refuses to partner with prediction markets and has barred them from advertising during broadcasts, an uneven playing field that favors the established, licensed sportsbooks. Meanwhile the operators are spending up to $400mn on customer acquisition this half, which pressures near-term margins but entrenches their position.

This is a genuine value setup after a brutal derating, but it comes with a binary risk that belongs front of mind: New Jersey has asked the Supreme Court to rule on the legality of prediction-market sports contracts. A decision as soon as June 2027 could reshape the entire industry.

A contrarian bet on the sportsbooks, with a hard stop: the Supreme Court could still blow up the industry.

Atlanta Braves Holdings is one of only two ways to buy a US pro sports team on the public market, and looks inexpensive even after a 25% gain this year. The market values it at $3.2bn, but recent baseball sales imply the team alone could be worth $6.5bn at ten times revenue. Adding roughly $1.25bn of real estate and subtracting debt, the stock could be worth over $100 a share. Sports franchises are valued on scarcity, and their prices keep climbing.

The discount is mostly about timing rather than the quality of the asset. Baseball faces a possible owner lockout. Its TV deal is smaller than football's. Control rests with 85-year-old John Malone, who is shareholder-friendly but in no hurry to sell. He may be waiting for a favorable resolution of the players' union talks before putting the "always open" store on the market.

This is a patient, margin-of-safety holding rather than a catalyst trade: you are buying a one-of-a-kind asset well below private-market value and waiting for a sale that Malone controls the timing of.

A cheap, low-risk way to own the rising value of pro sports teams, if you can wait for a sale.

Morgan Stanley's real assets team argues US industrial property has moved past a cyclical recovery into a structural growth cycle. Net absorption over the last year topped 260 million square feet, running twice the pace of a year earlier, while new construction starts have fallen 60% from their Covid-era peak. Demand is rising into a disciplined, shrinking supply pipeline, which is the classic setup for rising rents.

What is new is where the demand comes from. Three structural drivers have replaced consumer logistics: suppliers feeding the data-center build-out (hyperscaler capex is heading toward $1 trillion in 2027), tenants adopting warehouse automation, and reshored advanced manufacturing plus defense. In Dallas, data-center-adjacent tenants took 30% of leasing since late 2024; in greater Los Angeles, aerospace and defense leasing in the first half ran 140% above 2024. This demand is long-lived and no longer tracks GDP or retail sales the way old warehouse demand did.

The opportunity is the gap: equities tied to these megatrends compounded at 50% a year over three years while industrial property values stayed roughly flat, so the physical real estate that houses them has not repriced. Because performance is very uneven by market, this is a selective, stock-picking call on logistics and data-center-adjacent industrial names rather than the sector as a whole.

Buy US industrial real estate and logistics REITs; the property has lagged the megatrends it now serves.