Inside the Buy-Side No. 10

Calendar:

Episode drop
● $PLTR episode with Adam Parker — CEO and founder of Trivariate Research, and former Chief Equity Strategist at Morgan Stanley: Irrationally Overvalued — Could Historical Index Rebalance be the Catalyst to Break It?

You can access it on YouTube, Spotify, and Apple Podcasts.

In the pipeline:
🔜 $PLTR episode feedback
🔜 $TUSK: Deep value: 20% below cash, 60% below NAV, and pivoting to higher return industrials. We sit down with the CFO of Mammoth Energy Services, Mark Layton. Subscribe on YouTube for drop notifications.
🔜 A conversation with Jonathan Kasen: From Fidelity Portfolio Manager to building the See’s Candy of the northeast at Hilliards Chocolate

Education: 
🕵️‍♂️ Forensic Accounting 101 — One-day workshop on July 24 in NYC with a former Tiger Cub partner. Learn how to spot the accounting tricks management teams don’t want you to see. Register & get $100 off with the code “Doug”
🎓 Check out Aswath Damodaran at NYU Stern School of Business. His channel is a goldmine for all things corporate finance, valuation, and investment philosophy.

PLTR: Irrationally Overvalued — Could Historical Index Rebalance be the Catalyst to Break It?

This week we launched our 6^th episode. Adam Parker from Trivariate Research pitches, Host, Doug Garber on selling or shorting $PLTR ( ▲ 4.87% ) due to the unusually large potential impact from the Russell mid-cap index rebalance coming up and the high valuation.

After increasing over five fold over last year and reaching a market cap of over $300 billion, $PLTR ( ▲ 4.87% )  is slated to be removed from the Russell mid-cap index where it is over an 8% weight. Parker brings a sobering view of why $PLTR ( ▲ 4.87% )’s irrational valuation could crack on a significant index rebalance.

Pitch The PM's Variant View Investment Checklist:

1. What ACTION do I want the Portfolio Manager to take?

Sell or short $PLTR ( ▲ 4.87% ). Parker goes as far as calling Palantir "the single most overvalued stock" he's seen in his lengthy career. He believes the risk-reward for holding the stock is heavily skewed to the negative in the near term, especially with an upcoming index rebalancing on the horizon.

2. Do I UNDERSTAND this business?

Parker admits he isn’t a fundamental expert on Palantir’s operations but understands the key drivers of its valuation mainly government contracts, AI positioning, and retail enthusiasm. His analysis leans more on valuation metrics than on the nitty-gritty of Palantir's operations or business quality.

3. Is the stock available at a REASONABLE price today?

Not even close, according to Parker. He points out Palantir's "incredibly high enterprise value relative to its forecasted sales," estimating it at roughly 81x its projected FY25 revenue of $3.9B. The NTM P/E ratio is over 200x, and even looking out to FY26 or FY27, it's still sky-high at 185x and 140x respectively. Parker stresses that by any valuation metric, Palantir stands out as exceptionally expensive.

4. Why is this stock MIS-PRICED?

Several factors are at play: index fund mechanics are forcing mid-cap portfolio managers to buy significant chunks of the stock; this is compounded by strong retail investor momentum and FOMO. The hype surrounding AI and government contracts, coupled with a "very promotional CEO," has fueled extremely optimistic narratives about the company's potential. Lastly, there are unrealistic growth expectations that are unprecedented for a company of Palantir's size.  

5. What is the VARIANT VIEW vs the street?

While most investors are buying or holding due to momentum, index inclusion, or benchmark-related risk management, Parker’s view is rooted in historical data analysis. He argues that no company Palantir’s size has ever grown fast enough to justify such a lofty valuation. Even if Palantir meets or beats expectations, Parker believes the current stock price is disconnected from any realistic growth trajectory.

6. What is the EVIDENCE?

Parker’s evidence comes from historical analysis of valuation multiples, historical growth comparisons that show Palantir’s implied growth rate is historically unprecedented for a company of its size.

7. What are the CATALYSTS for the street to realize the view?

The big catalyst is the Russell rebalance scheduled for June 28. Palantir will move from the mid-cap to the large-cap index. This will likely trigger large-scale forced selling, especially from passive and mid-cap growth funds. In its new large-cap home, Palantir will be a much smaller fish, likely leading to an "excess supply" of shares and downward pressure on the stock price, especially in early July.

8. What is it WORTH if the bet is right?

Parker estimates a 50% downside within about a year if Palantir's valuation merely drops from "most expensive" to "second most expensive" stock. He warns the downside could be even greater if market sentiment turns negative or if Palantir misses earnings expectations.

9. What is the OTHER SIDE of the bet?

The stock could keep climbing due to continued retail inflows, AI enthusiasm, government contract momentum, or a broad market rally. Parker discusses $MSTR ( ▲ 2.63% ) and $APP ( ▲ 5.38% ) as possible hedges to isolate the negative impact of the PLTR index imbalance.

10. Is management ALIGNED with ownership?

Parker notes that CEO Alex Karp owns about $1B worth of stock, which shows some alignment. Peter Thiel is a major backer, and the company has top-tier institutional investors. Large passive managers like Vanguard and BlackRock own a significant portion. While Parker doesn't see any red flags here, he doesn't consider this a major factor in his short thesis for Palantir.

*Not Investment Advice. As of 6/18/25 I do not have a position. That could change. See full disclosures.

Watch the full discussion now!

The “GPU Whisperer”
AI, Data Centers, and Hydra Host’s Edge

Four key themes from the "GPU Whisperer," presented by Alpha Sense:

1. Winning cloud business models in the AI-GPU landscape

2. Hydra Host's role in optimizing GPU capacity monetization for data centers

3. Hyperscalers' silicon strategy: A defensive move with potential pitfalls

4. Nvidia's roadmap for maintaining market leadership

👇 Click the image below to access the webinar

Griffin’s Comment on Hit Rate and Resilience

Ken shared a great lesson on resilience and an investing mindset, and I broke it down in my latest post. Here’s a quick summary:

This game is about resilience, staying intellectually honest, knowing when to punt, and swinging big when the stars align. I shared how I was fortunate to be a top 5 analyst twice at Surveyor Capital, with a 54% hit rate. Think of it like running a casino. You just need to win slightly more than you lose and keep playing. In our world, that often means betting on earnings revisions, understanding what expectations really are beneath stale sell-side consensus, and reading positioning as carefully as the fundamentals. Magnitude matters. The goal is to see through the quarter and ask where you want to be afterward, with clear eyes about what the quarter taught you.

It’s also about slugging percentage. Are you hitting singles, doubles, or the occasional home run? Do your wins meaningfully outweigh your losses? And reps matter. Risk management and staying power are everything, knowing when to size up around earnings and when to reduce exposure to avoid macro noise. These days, I’m no longer forced to swing at every pitch like I was in Pod Shop Land. Now I’m patiently filling out my Buffett 20-slot punch card, waiting for the fat pitches where I can swing with conviction.

You can read the full post with this link. And you can watch the clip this post is drawn from here:

Reasons Top Hedge Fund Managers Get Paid Like Pro Athletes

Some color on the WSJ article highlighting Steve Cohen's Point 72 paying at least $50MM for Marshall Wace's TMT PM, Kevin Liu, earlier this year.

Here's why HF talent is getting pro athlete deals:

1) The Big 4 multi-managers have ample capital and not enough places to invest it that can move the needle. They are generally closed to new money with some returning capital (or profits) from time to time and replacing it with near-permanent capital (i.e. redemption limits per period). The low vol, uncorrelated product is in demand and there are new multi-managers popping up each year from top lieutenants that allocators are funding.

2) The Big 4 have roughly $200 billion of AUM. Levered that could be $1 trillion!

3) The owners or GP's are incentivized to maximize their AUM as they generally get 20% of the profits with operating costs (typically including team incentives of roughly 20%, PM acquisition costs, data, research, etc..) passed through to the LP's. It's good to be king.

4) There are very few PM's that are available that run a few billion and consistently generate say $100 MM. One big deal is as much Biz Dev work as a handful of smaller deals. Same thing the large public companies say in their M&A strategy.

5) Paying say $100 MM over 5 years or $20 MM a year for an expected $150 MM of PnL is a great deal for the GP and solid for the LP. The GP gets 20% of the profit pool or $24 MM in this case and has no direct cost. The LP — who the GP has a fiduciary duty to — pays $20 MM per year and gets 80% of the profit pool. At $150 MM in potential PnL less the team pay-out of 20% or $30 MM = $120 MM profit pool or $96 MM for the LP and $24 MM for the GP. Let's assume that is on $2000 MM GMV / $500 MM AUM = 19.2% return for the LP. Adding in the $20 MM buy-out fee to the LP's = $76 MM of net PnL or 15.2%. (These are general industry assumptions and do not represent any particular case. Each deal, like any large M&A deal, is nuanced with earn-outs, clawbacks, etc.)

6) The non-competes are getting longer: 12-18 months is the norm, and there was even legislation proposed to take that to four years in Florida. With longer non-competes then a team hiring period with Analysts potentially having 1 year sit-outs too, the time value of money is coming into play. i.e. a short (under 1 year) non-compete is a big advantage if you have one. I’ve had friends (at MM spin-off's) offered an extra 10 points of earn-out to sign an extra year of non-compete.

Updates to Pitch The PM Job Board

2 opportunities highlighted this week

• John O’Toole, a former PM and Partner at Wellington Management who is available with expertise in Metals & Mining, Energy, Green Tech

• A friend and former colleague with a very solid track coming out of Garden Leave this month looking for a Senior Energy Analyst and Senior Industrial Analyst to launch and scale with $1 Billion+ opportunity. DM me for an introduction.

📌 17 New Job Opportunities:
- LO: Analyst (Consumer Staples) – Causeway Capital
- LO: Associate (Consumer) – T. Rowe Price
- LO: Analyst (International Equities Growth) – Federated Hermes
- LO: Research Associate (TMT) – Neuberger Berman
- LO: Senior Associate (Private Credit / Alternatives) – New York Life OCIO
- HF: Associate PM (Equities / Quant) – Man Group
- HF: Analyst (Med-tech) – L/S Equity Fund
- HF: Analyst (India TMT / IT Services) – Balyasny Asset Management
- HF: Short Analyst (ESG / Generalist) – Sunlight Partners
- HF: Quantamental Analyst (Generalist / Quantamental) – Engineers Gate
- HF: Sector Specialist (Financials EqRV) – Carlson Capital
- SS: Research Associate (Small/Mid Cap Generalist) – B. Riley Securities
- SS: Research Associate (Generalist / TMT / Financials) – Citi
- SS: Research Associate (Energy, E&P) – RBC Capital Markets

🔍6 New Job Seekers:
- 7 yrs L/S (Cyclicals), 7 yrs SS (Cyclicals), 2 yrs Corporate IR
- 2 yrs LO (Generalist), concentrated $8B single manager
- 7 yrs SS (FinTech, Financials, Consumer, Crypto)
- 20+ yrs Energy Finance: 10 yrs SS Analyst, 13+ yrs Corp Strat/IR/CFO (M&A, CapMkts), CFA
- Undergrad '25 – Seeking Full Time, Background in Financial Modeling and Equity Research
- Undergrad '26 – Seeking Internship/Full Time, Background in Finance and Econ

🚨 We're launching a dedicated Job Board Newsletter!
If you’re hiring, job hunting, or just want to stay plugged into the market, this is your go-to resource.
Get Regular Updates here.

Check out the most recent Job Board post with a comprehensive list of opportunities and candidates by clicking the image below!

About Us

Pitch The PM is the Professional Investor's Podcast that provides a deep-dive into a stock's investment case using the Variant View Investment Checklist. It is an open exploration of the research process in real time using high-conviction ideas from top PM’s and Analysts. Join the journey as Doug fills out his Buffett advised, 20-slot lifetime punch card. We learn and laugh together. 

The Variant View Investment Checklist is the process that combines:

• A decade of experience managing $1B at Citadel & Millennium, 

• Studying the great investors like Buffett, Munger, Lynch & Greenblatt, 

• and the latest AI tools to improve idea velocity, accuracy and conviction.

Westport Alpha Group is a family office consortium of like minded finance professionals. Individuals may engage in Special Purpose Vehicle’s (SPV’s), Separately Managed Accounts (SMA’s) or act as an Independent Sponsor for a private company or in a public company take-private. This is not a solicitation to sell/buy any security or engage in any services. This is not an attempt to form a group.

Pitch The PM is hosted by Doug Garber, a former Citadel Analyst and Millennium Senior Portfolio Manager. Doug was initially trained at Citadel by a former SAC/Point 72 Analyst who worked directly for Steve Cohen before becoming a PM at Citadel. Doug was ranked as a top five analyst while at Citadel’s Surveyor Capital and was the only one to receive that designation twice during his tenure. He managed a multi-sector, multi-strategy team at Millennium under Katahdin Capital. Prior to his buy-side career, Doug worked in sell-side equity research honing modeling and primary research skills. Doug is currently the CIO and DoR at the Westport Alpha Group.

Doug graduated from Tulane University with a BSM and Master of Finance. He was selected to participate in the Darwin Fenner Student Managed Endowment Fund that utilized quantitative factors to outperform its benchmark and be an Investment Research Manager in the Burkenroad Reports “Stocks Under Rocks” equity research program. Doug has a passion for iterating on the investment process and a quirky sense of humor. He lives in Westport, CT with his wife, Lexi, and three kids. When he is not reading a 10-K, you can find him coaching youth soccer, inverted on his yoga mat or on an eFoil looking for Zuck.

Disclaimer

Past performance is not indicative of future results. Neither Pitch The PM nor its author (s) guarantee any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment discussed in this material or on the show. Strategies or investments discussed may fluctuate in price or value. Investors may get back less than invested. Investments or strategies mentioned on this website or on the show may not be suitable for you. This material does not take into account your particular investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. You must make an independent decision regarding investments or strategies mentioned on this letter, on the website or on the show. Before acting on information on this website, in this letter or on the show, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.

The author (s) of this report may have positions in the securities discussed. The positions may change at a future date and neither Pitch The PM nor any authors are under any obligation to update you. The information may not be accurate and you should do your own research.

This is for educational purposes only. This is not investment advice. Please contact your financial advisor to see what is suitable for you. Please see disclosures at PitchThePM.com