October 2026 Random Ramblings

<p>Starbucks and Chipotle might be the merger with the fewest synergies two companies in the same industry could possibly have: different supply chains, different kitchens, you can't even put them under one roof. The only synergy is one man. Brian Niccol ran Chipotle and now runs Starbucks, so the deal only makes sense if you think he is uniquely talented enough that both brands are worth more under him. I start with a brain teaser on SOLS (Solstice Advanced Materials): management announces a merger investors hate, the stock drops 20%, and then they call it off. Is that a management team willing to listen, or one whose capital allocation you can't trust anymore?</p><p>From there, state of the markets: the indices are up double digits, yet most of my friends are borderline despondent. Everything outside tech and energy is roughly flat on the year and the Russell 2000 is down about 8% since June 30th. I also revisit the old "the Russell is a broken index because it kicks out its winners" argument, and why that same feature helped it dodge SMCI's collapse and this year's AI peak.</p><p>Then unexpected competition. FICO pushed pricing and got a regulatory crackdown, IMAX locked up Dune 3 and Disney answered with Infinity Vision, and micro dramas (Quibi, just seven years early) are going after Netflix's screen time. I close on Oura pulling its IPO at a $15 billion valuation, the AI data premium on its wearables, and which businesses get a one-time AI windfall, with home builders like Lennar as my value investor answer.</p><p>The New York Times piece on micro dramas: <a href="https://www.nytimes.com/2026/10/06/magazine/microdramas-tv-shows-hollywood-entertainment.html">https://www.nytimes.com/2026/10/06/magazine/microdramas-tv-shows-hollywood-entertainment.html</a></p><p>This episode is sponsored by Trata: <a href="https://www.trata.com" rel="ugc noopener noreferrer" target="_blank">https://www.trata.com</a>. Trata takes anonymized calls where two buy-siders talk through a stock they're long or short, the opportunity, the risks and where the street is wrong, and lets you read the transcript. Whenever I start on a new company, my Claude agent's first step is pulling the Trata transcripts that mention it.</p><p>Chapters:</p><p>(00:00) What I'm rambling about this month</p><p>(03:36) Sponsor: Trata</p><p>(04:41) M&amp;A brain teaser: SOLS calls off its merger</p><p>(08:48) Starbucks and Chipotle: a merger with zero synergies</p><p>(11:21) The only synergy is Brian