The Ledger
Every statement that passed quotation and attribution checks. Mix any filter with any other: certainty 1/5, debate potential 5/5, or both at once.
why aren't all 44 resolved? a statement only gets an assessment when the public record can support or contradict it. opinions and what-ifs never can, and 0 checkable ones are still open, waiting for their date. predictions held up or didn't; assertions are supported or contradicted. on every card: ▮▮▮▮▮ certainty · ▮▮▮▮▮ debate potential. speakers are clickable
Scilipoti: The AI Ecosystem Relies on Circular Financing Involving Nvidia
“NVIDIA invests in OpenAI, and NVIDIA is a supplier of chips to OpenAI. So it's all circular, what's going on here.”
Scilipoti: EBITDA Is the Mother of All Disastrous Financial Measures
“EBITDA is the mother of all disastrous measures.”
Scilipoti: In Raging Bull Markets, Experience and Knowledge Become Handicaps
“During raging bull markets, knowledge is superfluous, and experience is a handicap. Because if you have the benefit of knowing what happened in all the other blowups, you know how painful it could be. But if you've never experienced it, and every time somethin…”
Scilipoti: Vendor-Financed AI Chip Bubble Is Highly Vulnerable to Collapse
“But if this is happening over hundreds of transactions, where it's making investments like this, in its own customers, then what ends up happening if all of a sudden it runs out of the ability to get cash or the customers end up having problems selling service…”
Scilipoti: Apple's Debt-Funded Share Buybacks Pose a Major Financial Risk
“And I look at Apple, and this is what concerns me. Revenues are growing. Minimal. And yet, it generates meaningful cash because it has a brand. People are still willing to pay eight, 2000 dollars for a new phone. There's a lot of competitors, and I'm not sure …”
Scilipoti: AI will completely replace entry-level junior financial analysts
“The bottom level of being an analyst, the junior analyst is, is going to be replaced by an AI. The one that said, find me all the references of, you know, where the company capitalized costs. That the AI can do.”
Scilipoti: Arthur Andersen was scapegoated for systemic accounting flaws
“It became a scapegoat for everything wrong with accounting at the time, and look, change needed to happen.”
Scilipoti: AI Will Replace Junior Financial Analysts Completely
“The bottom level of being an analyst, the junior analyst is, is going to be replaced by an AI.”
Scilipoti: AI Automation Destroys the Financial Analyst Training Ground
“If that junior person doesn't learn, doesn't get on the in on the ground floor, they'll never learn to be able to make all those connections.”
Scilipoti: Equity markets have entered a period of extreme euphoria
“I think we're in what seems to be, you know, and I hate calling things bubbles, but I think we're in a period of extreme euphoria”
Scilipoti: Private equity blindly piles into companies Nvidia invests in
“If you see that my name as a key investor and a leader in this industry is making an investment in this company, well, then what does everybody else do? Warren Buffett tells you he's buying something. What does everybody do? They go buy it. Well, if NVIDIA is …”
Scilipoti: Veritas Was the Only Sell Rating on Valeant in 2012–2013
“We wrote about Valiant. We said sell Valiant, ok? We're the only sell on, on Valiant in 20 12, 2013. The company didn't blow up until 2015, ok?”
Scilipoti: Valeant Manipulated Accounting and Ran Fraudulent Pharmacy Network
“If you look deeper, they were just manipulating the accounting and changing the pricing on, on drugs and creating a fraudulent network of online pharmacies.”
Scilipoti: CPP and US pension funds should invest domestically
“I think CPP should do the same. CPP should be encouraged to invest in Canada. The U.S. Pension plan should buy U.S. Companies. Encouraged to do that.”
Scilipoti: Acquisition costs are not one-time expenses for serial acquirers
“If making acquisitions is part of my business model, there are no longer one-time costs.”
Scilipoti: Stock Options Must Be Accounted for as an Operating Expense
“I think stock options should be an expense. And if they're not an expense, I borrow from Buffett and even the chair of the accounting has said things like this, that, that if it's not an expense, then what is it?”
Scilipoti: Boards must represent broad stakeholders, not just calculated shareholder value
“The role of the board is to embrace the position of and the viewpoint of the shareholder, and or the stakeholder, I, we always, always focus on the shareholder, but stakeholders, stakeholders, employees customers, the communities the company works in, the comp…”
Scilipoti: Passive Index Investing Is Essentially Automated Momentum Investing
“The danger I think we're having of the index investing, passive investing, is that in essence, all that is, is momentum investing, because it's a, you're buying an index, which is market cap weighted, So the money that you're investing is going to the largest …”
Scilipoti: Stock buybacks signal a lack of high-return business investments
“So to me, it's a point that says I have no other investments in my business that That would generate a return higher than my cost of capital, and so I'm going out and buying my stock, and I think that is very risky.”
Scilipoti: If markets had superior information, earnings news would not move stock prices
“If we had better information, then you know what? Stock prices on news would hardly move. Everybody would already have known.”
Scilipoti: AI information is useless without prior domain expertise and direction
“The AI makes me get to the answer perhaps more quickly, but it's my, if I don't already know where I want to go, then AI just gives me information. But that information doesn't help my decision if I didn't start with where I want to get to.”
Scilipoti: Arthur Andersen was cleared on appeal after already collapsing
“And so it was found in the courts upon appeal that Arthur Anderson was not guilty, but that was way after the fact because Arthur Anderson was already was brought to its knees and it was over.”
Scilipoti: Audits face structural conflicts due to client-paid compensation models
“And the challenge is time, because you have to do this quickly. Pressures on costs. And essentially, think about it this way. It's like, I tell you, look, I just prepared my report card. I got an A. I now hand it to you and say, look, it's an A. And if you say…”
Scilipoti: Investors Must Master Financial Fundamentals Before Relying on AI
“You need to learn it without the calculator, and then you can use the calculator, which is the same with AI. You need to understand how the financial statements are prepared, understand the linkages, developmental models, so that when the AI gives you informat…”
Scilipoti: AI Cannot Link Historical Patterns Without Directed Human Mental Models
“And I think that's something that the AI can't quite do, unless you tell it where to look, because it doesn't know the link to it that I'm thinking about. But if I can make the initial stage, it can help me get there quicker. And more accurately, but if I don'…”
Scilipoti: Financial market risk is highest when the cost of risk is priced low
“And I think right now, the reason why I think we're in a very high risk situation is because the cost of the risk is priced very low. And that's when the risk is highest.”
Scilipoti: US high-yield bond spreads are near historic tightest levels
“Well, that's the tightest, near the tightest it's ever been, which means that investors are willing to lend money to non-investment grade companies at a spread over what a government bond is at a rate which is the tightest it's been practically in history.”
Scilipoti: Small-Cap and Mid-Cap Earnings Are Flat Outside Mega-Caps
“But what instead I know is I'm looking at the underlying companies, and except for some of the Mag-Seven that are growing their earnings, the smaller and mid-caps are not.”
Scilipoti: Operating cash flow must include vendor-financed long-term customer receivables
“The ratio needs to be adapted to the company, the life cycle, the industry, the business model. If the company's selling things at a long-term receivable for over a period of extending beyond one operating cycle, but it's part of its normal operations, that sh…”
Scilipoti: The primary investing rule is avoiding catastrophic, embarrassing losses
“My number one rule is avoid embarrassing loss. You want to avoid the loss of a company potentially blowing up. If the company might, you know, if it looks like it's a little bit expensive and it might potentially go down five percent or something or 10% or 20,…”
Scilipoti: Investors should adopt a "verify then trust" posture toward management
“Another rule is don't trust management. I'm sure there's many management teams and I run my, you know, we're a operating business private company. And it's not that they, that, you know, you shouldn't trust anything they say, but again, it's a mindset. Everyth…”
Scilipoti: Read financial statement footnotes before looking at the statements themselves
“You have to read the notes to the financial statements first before you actually read the statements. The notes to the financial statements tell you how the company modified the accounting because it made accounting choices. We decided to account for this, the…”
Scilipoti: Money management fees are a fraction of what they were a decade ago
“The money management fees today are a fraction of what they were Even a decade ago.”
Scilipoti: Corporate fraud begins gradually under stakeholder pressure to meet targets
“Companies don't start out as being crooked. They have to convince someone to buy a product, ok, or a service. So money comes in to the company in some fashion or time, and then gets converted into something that adds value. The problem becomes outside stakehol…”
Scilipoti: Compensation rewarding acquisitions over organic growth is problematic
“If the company's incentives aren't linked to that, so if they're not tied to, you know, cost control, if they're not tied to driving revenues from an organic standpoint, not just from acquisitions if they're not, you know, if they're tied, if they're driven by…”
Scilipoti: Lowering bonus targets when management misses goals undermines governance
“Did a company say, you know, we're going to pay management on X performance metric. If they hit it, they get a hundred percent. If they don't, they get some graduated scale. Well, then management doesn't hit it and they change the metric and management still g…”
Scilipoti: S&P 493 Shows Zero Earnings Growth Versus Magnificent Seven
“And so if you look at the earnings expectations of the sloppy four 93 for this year is virtually no growth. But if you look at the growth of the mag seven, it continues to go higher.”
Scilipoti: Mega-Cap Earnings Deceleration Would Trigger a Protracted Downturn
“If you look at what I think could make this one be a longer one, if it, if something were to occur, is it comes from earnings slowing down. And earnings growth slowing down, that would be something that would take longer to repair, especially when a lot of the…”
Scilipoti: Buffett's operating cash flow frees him from fund manager benchmark constraints
“Buffett has built a business that generates cash. So he has operating businesses, Geico, Prudalum, etc. These generate cash. He takes that cash and invests it when he wants to invest it. In the way that he wants to invest it. You know, the average portfolio ma…”
Scilipoti: Retail investor share of total investment is at an all-time high
“And today the retail investor as a component of total investment is the largest it's ever been.”
Scilipoti: Pre-Enron rules allowed contingent debt hidden in footnotes only
“And at the time the accounting rules were such that this, these numbers were not included on the liabilities. They were just in the notes.”
Scilipoti: Cisco never regained dot-com peak valuation despite much higher earnings
“Cisco still exists today, but has never traded at its historical valuation. And yet it's a multiples bigger than it was back then by earnings and by revenue.”