I won't be moving from my desk tonight:

Dougie Kass

Taking a long trading rental at 605PM:

• SPY $651.60
• QQQ $583.93

% Gainers

% Losers

Closing Breadth

Sectors

% Movers

Nasdaq 100 Heat Map

Dougie Kass

So you all understand. I will not respond to ad hominem attacks. I won't take the bait. I am trying to help subs and will not be distracted by haters. Thanks.

"What doesn't kill us makes us stronger."

- Friedrich Nietzsche

Thanks for reading my Diary today.

Tomorrow I promise to be in my perch for the full day

Don't watch FIN TV tonight.

Stay safe.

Following up to both my last two points from this morning's More Tales From Nvidia: The Earnings Call (Issue #152!) — new points in boldface:

* The depreciation issue has been terribly misconstrued. An assets economic value and depreciable life are not the same as the lifespan for which it can be used to do something (like heat your home). Look at the value of a new car over time. Cars are not in the same league as data center chips and equipment. If there was ever a case for massively accelerated depreciation (with a not far out endpoint either), this industry is it. Nvidia is on one-year product cycles for a reason. Retail may not understand the difference, professionals should. Yet even they are falling back on this non-sensical argument that this stuff should be straight-lined over far too long period of time. 

NVDA and investment professionals are making the straight line over a lengthy period of time argument, just because it is still in service. I meant to excerpt this from their transcript. Not how it works, not even close:

* Imagine if accounting rules were different and investments that had the following characteristics were accounted for as a cost of sales, like a volume discount or distributor kickback: significant $ invested, small fraction of company acquired, said company makes meaningful purchases back from you, investment is minimally dilutive (free money), the investment can be classified as high risk/speculative, and the investment is made at a stratospheric valuation. This accounting rule, would in fact be quite reasonable. Ask yourself this question, if things were accounted for in this manner and this became a cost of sales, do you think NVDA would be making all of these “investments”?

The more I think about it, the more I believe I am right. These “investments” are really just crafty forms of price discounting, where the price discount is moved out of the P&L. Someone needs to rebuild the NVDA earnings reports, and move the “investment” dollars into cost of sales. Just for fun, I asked ChatGPT to do this. You can only imagine. I would have better luck going back and forth with a third grader.

I covered my  (JOET)  short at $40.65.

 I sold my trading long rental in the indices:

*  (SPY)  $657.32

*  (QQQ)  $591.20

From 25 minutes ago:

Long Rental in Indices

Trading long rental in indices:

(SPY) $654.92

(QQQ) $588.90

Position: Long SPY (S), QQQ (S)

By Doug Kass Nov 20, 2025 2:07 PM EST

Housekeeping item.

I have covered my  (MSTR)  at $173.76.

I have warned about this BS for months:

Things that make me say hmmm...

* What? OpenAI's auditor, Fontanello, Duffield & Otake, has 11-50 employees and revenue under $5 million.

This, from JustDario:

That is the entirety of OpenAI's auditor's website!:

* Nvidia concentration of sales — nearly 2/3 of the company's sales came from four customers.

Trading long rental in indices:

(SPY)  $654.92

(QQQ)  $588.90

I expect to be in a tradable oversold in the next few days as the oscillator grows more negative...

I'm buying back the PepsiCo  (PEP)  at $145 vs. what I sold a few days ago higher.

I'm adding to Kimberly-Clark  (KMB) .

Long trading rentals:

*  (PLTR)  $157.32

*  (HOOD)  $108.01

There is nothing like being out of the office during one of the most dramatic reversals in months.

I will be returning in about 30 minutes.

Upside:

-MNDR +65% (signs agreement to acquire two AI optimized data centers located in Malaysia for up to $120M)

-PACS +55% (earnings, guidance)

-MAGN +37% (earnings, guidance)

-CRNC +29% (earnings, guidance)

-EXAS +18% (to be acquired by Abbott at $105/shr in $21B cash deal)

-ODD +18% (earnings, guidance)

-CIFR +13% (signs Additional 56 MW, 10-Year AI Hosting Agreement with Fluidstack; files to sell offering of $333M of 7.125% Senior Secured Notes due 2030)

-CRWV +9.5% (higher in sympathy with NVDA; comments from Wells Fargo TMT Summit presentation)

-DPRO +7.0% (secures Strategic International Military Order for Commander 3XL Drone Systems)

-RKLB +5.4% (to launch its next Electron mission is scheduled to take place from Rocket Lab Launch Complex 1 in New Zealand)

-NVDA +5.2% (earnings, guidance)

-TEN +3.9% (earnings)

-AMD +3.7% (higher in sympathy with NVDA)

-GOOGL +3.3% (announces the opening of AI infrastructure engineering center in Taiwan)

-WMT +3.2% (earnings, guidance)

-AGIO +2.8% (Leerink Partners Raised AGIO to Outperform from Market Perform, price target: $34)

-J +2.6% (earnings, guidance)

-WMG +2.3% (earnings)

-MRNA +2.0% (affirms FY25 guidance; secures $1.5B five-year credit facility from Ares Management)

Downside:

-BBWI -17% (earnings, guidance)

-VZLA -13% (prices $250M 5.0%convertible senior notes offering)

-AEON -5.7% (first closing of PIPE resulted in ~$1.79M in proceeds; FDA BPD Type 2a meeting now scheduled for January 21, 2026 (prior Nov 19, 2025))

-NTES -3.0% (earnings, color)

-PANW -2.8% (earnings, guidance)

-ATKR -2.4% (earnings, guidance; expands scope of strategic alternatives review to maximize shareholder value and enters into Cooperation Agreement with Irenic Capital Management)

Treasury Auction:

11 a.m.: Treasury announces a 3 and 6 month bill auction;

11 a.m.: Treasury announces a 6 and 52-Week Bill Auction;

11:30 a.m.: Treasury hosts a $110B 4 and $95B 8 Week Bill Auction;

1 p.m.: Treasury hosts a $19B 10-Year Tips Auction

Fed Speakers

8:50 a.m.: Fed Bank of Cleveland President Hammack (Non-Voter) delivers opening remarks at the Federal Reserve Bank of Cleveland Financial Stability Conference (Audience questions expected);

9:30 a.m.: Fed Board Governor Barr (Voter) participates in "Artificial Intelligence" discussion before the FinRegLab AI Symposium 2025, Washington, DC (No text. Q&A from moderator. No Webcast);

11 a.m.: Fed Board Governor Cook (voter) participates in a moderated discussion about financial stability at the Psaros Center for Financial Markets and Policy, Washington, DC;

12:40 p.m.: Fed Bank of Chicago President Goolsbee (Voter) speaks at the CFA Society of Indianapolis 2025 Annual Lunch & New Charterholder Ceremony (Livestream available. Embargoed text TBD);

1:15 p.m.: Federal Reserve Board of Governors Meeting: Periodic Supervisory Update;

4:30 p.m.: Fed Bank of Philadelphia President Paulson (Voter in 2026) speaks about the economic outlook at the Federal Reserve Bank of Philadelphia's Field Meeting Capstone, Pennsylvania;

6:00 p.m.: Fed Bank of Chicago President Goolsbee (Voter) Television Appearance -- PBS NewsHour;

6:15 p.m.: Fed Board Governor Miran (FOMC Voter, Dovish Dissenter) participates in discussion before the American Investment Council General Counsel Day, NYC ( No text. Q&A from moderator. Livestreamavailable)

Economic Calendar for the Week

I just got off of the Nvidia  (NVDA)  call.

The share price has responded quite well to the results and guidance.

However, revenue, earnings and guidance were below a lot of the whispers, even with receivables growing by $5.58 billion sequentially, but retail and algos will do their thing. What was interesting to me: 

* The company basically told us they are going to make another investment into OpenAI (and numerous others), after just sticking $6.6 billion into the thing. I guess that will be from NVDA circular investment fund 3. Here is a prediction, it will be a fair bit bigger than the $10 billion they just dumped into Anthropic, and they will give OpenAI a big step up in valuation for no reason from an investment perspective. The company receiving the money, when they do this, given the absurd valuations ascribed to these investments, takes almost nothing in the way of a dilution hit. It therefore is effectively free money that for all intents and purposes becomes earmarked to buy NVDA products one way or another (money is fungible). My two cents, this should be cost of sales. At any rate, $1 billion, $6.6 billion, $10 billion, well keep trend-lining this out — we are going to need a bigger boat. 

* All their commentary about China sales being zero. Well technically yes, I guess, but for all practical purposes I believe that one as far as I can throw a grand piano. Looks like they re-classified rev rec again, although there are theoretical ways other than this for their product to get into China too:

* There was not a single question from the “analysts” about Google TPUs and numerous other things that should matter. 

* Some interesting comments about gross margin percentages next year, which probably are in part related to the above issue. I wonder how price negotiations happen when your customers are related parties? I feel like I was just at a used car lot listening to that thing, I need to go shower now.

Two other noteworthy comments: 

* The depreciation issue has been terribly misconstrued. An assets economic value and depreciable life are not the same as the lifespan for which it can be used to do something (like heat your home). Look at the value of a new car over time. Cars are not in the same league as data center chips and equipment. If there was ever a case for massively accelerated depreciation (with a not far out endpoint either), this industry is it. NVDA is on one-year product cycles for a reason. Retail may not understand the difference, professionals should. Yet even they are falling back on this non-sensical argument that this stuff should be straight-lined over far too long period of time. 

* Imagine if accounting rules were different and investments that had the following characteristics were accounted for as a cost of sales, like a volume discount or distributor kickback: significant $ invested, small fraction of company acquired, said company makes meaningful purchases back from you, investment is minimally dilutive (free money), the investment can be classified as high risk/speculative, and the investment is made at a stratospheric valuation. This accounting rule, would in fact be quite reasonable. Ask yourself this question, if things were accounted for in this manner and this became a cost of sales, do you think NVDA would be making all of these “investments”?

Bonus — Here are some great links:

Two Risk Gauges, One Big Decision

Expecting New High

The Costco Breakdown

An Update on Flows

I will be out between 10 AM and 12:30 PM at two separate meetings with company managements.

Wolf Street howls about dropping condominium prices. 

The S&P Short Range Oscillator has moved deeper into an oversold at -2.77% vs. -0.80%.