I wanted to apologize for the “warning message” Gmail had above the last send. Switching newsletter platforms and immediately sending to 40,000 people led to me being flagged as suspicious. Beehiiv is working on remedying this as we speak. If you’re seeing this and got that same warning email, please mark it as safe. Thank you.

I deposited a chunk of funds worth about 3% of total holdings today. These deposits are likely going to remain frequent going forward. Those funds were added to:

Duolingo reasoning is simple. It continues to lead software in revenue and profit growth (including GAAP profitability). It continues to successfully expand into more categories. It continues to lead the pack on GenAI educational innovation to fend off that competitive threat. I’m confident that real-time language translators don’t replace the desire or need to learn a language — just like calculators didn’t mean the end of learning arithmetic. It continues to flawlessly execute. It now trades for about 40× 2024 earnings with a 50% EPS CAGR expected for the next two years. Yes please.

Lululemon is now at convincing 10 year lows for forward earnings multiple. I think the profit estimates are safe. I think as comps ease, it restocks needed inventory and macro brightens, this thing will magically turn around. I like to buy the best players in sectors when those sectors are hated. Consumer discretionary is hated.

DraftKings & Zscaler are the continuation of planned new position build-outs.

Shopify channel checks are convincingly positive. I think its large enterprise momentum paired with high return marketing opportunities will yield profit upside over the next several quarters. While it would be inappropriate to call this cheap, a 1.75x PEG ratio for a name like this one is more compelling than it usually is… and elite companies with endless runways, strong growth and strong market share gains will not be traditionally cheap.

One more note. I’m extremely impressed with Spotify’s performance over the last year. It has slashed costs, aggressively hiked prices, maintained very low churn and delivered continued strong revenue compounding. The result has been an incredible profit inflection similar to what we’ve seen with Airbnb, Uber and Shopify in recent memory. Still, its PEG ratio is now over 2X and I don’t think it’s prudent to chase here. I will be watching this one very closely for a more compelling entry. Consider this a new watch list item alongside Cava, Chipotle Sweetgreen, Coupang, Mercado Libre, Revolve and Nike.