Sources of Stock Ideas
How we systematically generate the next stock to analyze. Updated April 2026.
With ~5,500 publicly-traded US stocks (and many more globally), we cannot analyze them all. We need a deliberate process for choosing which ones to look at next. These are the five sources we use, ranked roughly by priority.
1AGI Thesis BeneficiariesHighest Priority
Anything that benefits from our core AGI worldview. AGI is the single biggest economic shift in our lifetime — companies positioned to capture value from it should be our first lens.
What qualifies
- Compute infrastructure — GPUs, custom AI chips, networking, packaging (NVDA, AVGO, AMD, TSM, MU, SK Hynix)
- Power for compute — Nuclear (CEG, CCJ, LEU), gas (EQT, LNG), grid equipment (GEV, ETN), behind-the-meter (BE)
- Physical bottlenecks AGI cannot replicate — Mining (FCX, MP, copper, rare earths), real estate near data centers, irreplaceable physical assets
- Companies AGI directly enables — AI software platforms with data moats, robotics enablers
- Companies AGI threatens (for shorting or avoiding) — IT services (INFY, ACN, CTSH), staffing, legacy SaaS that AGI commoditizes
What to do
Whenever an AGI-related news event happens (new model release, hyperscaler capex announcement, nuclear restart, chip export rules), check who benefits and add them to the analysis queue. Maintain a running list of AGI infrastructure layers and ensure we have coverage of each.
Example: When NVIDIA disclosed B200 needs 8 HBM stacks vs H100's 5, that immediately made HBM capacity the binding constraint — leading us to MU and SK Hynix.
2Deep Value & Asymmetric CyclicalsPark-Capital-Safely
Stocks where the downside is structurally limited (trading well below tangible book, sitting on cash, no debt) but optionality exists for a 10x. These are "park money here, hope something good happens" bets.
What qualifies
- Trading below tangible book with positive cash flow and clean balance sheet
- Cash > market cap with a real (not pre-revenue) operating business
- Cyclicals at trough where we have conviction the cycle is about to turn (memory at $30/share, oil at $40, homebuilders during housing crash)
- Special situations — spin-offs, post-bankruptcy emergences, activist targets, buyout candidates
- Net-net or sum-of-parts plays where the parts are worth more than the whole
What to do
Run periodic screens: price-to-tangible-book < 1.0x, price-to-cash < 1.5x, EV/sales < 0.5x. Then filter for businesses that aren't structurally broken (revenue not collapsing, no fraud red flags). The Round 1 universe screen ($50M-$5B) surfaced AER, ECPG, NEN as examples.
Example: AerCap (AER) trading at 0.86x book value while being the world's largest aircraft lessor with 21% ROE. Aircraft are physical assets that hold value. The trough is bounded.
3Superinvestor HoldingsHigh Priority
Track the portfolios of investors whose judgment we respect. Their best ideas often outperform the market and we can leverage their research for free.
The four investors we follow actively
Leopold Aschenbrenner
Situational Awareness Investments. AGI-pilled, 13F published quarterly. Top: BE, CRWV, INTC.
Ted Weschler
Berkshire portfolio manager. Private portfolio is what we want — separate from BRK 13F.
Mohnish Pabrai
Pabrai Wagons Fund. Concentrated value investor, copies Buffett style.
Li Lu
Himalaya Capital. Munger's protégé. Concentrated, long-term, often China-focused.
What to do
Each quarter when 13Fs are released (45 days after quarter-end), pull these portfolios. Look for: (1) new positions, (2) significantly added positions, (3) any holding where price hasn't run up much from their estimated cost basis. Cross-reference with our existing analysis.
Example: Leopold's $1.7B BE position validates the behind-the-meter data center power thesis. Without that signal we wouldn't have prioritized Bloom Energy.
4News-Driven Movers (Up)Active Monitoring
Stocks that have moved up on news. The market reacted to something — investigate whether the catalyst is structural and could sustain, or whether it's a one-time pop. Catching a structural trend early can mean buying before the full repricing.
What qualifies
- Stocks up 20%+ in a week or month on company-specific news (not market beta)
- Sector-wide moves driven by industry data (e.g., memory prices spiking)
- Earnings beats that signal a structural inflection (margin expansion, new product traction)
- Regulatory changes that benefit a specific group of companies
- New customer wins or contract announcements that change the trajectory
What to do
Daily/weekly scan of biggest movers in our universe. For each significant mover, ask: "Is this a one-time pop or the start of something structural?" If structural, prioritize for analysis. Speed matters — entering after the first 30% move is often still very early in a multi-year trend.
Example: When DRAM spot prices spiked 65% QoQ and SK Hynix hit 72% operating margins, that wasn't a one-quarter event — it was the start of a multi-year HBM-driven supercycle. Investigating in real time would have meant catching the first leg of the move.
5Crashed Stocks (Periodic Scan)Periodic
Periodically scan for stocks that have dropped significantly. The most asymmetric bets often come from temporarily distressed quality businesses. Mr. Market hates uncertainty — when good companies face temporary problems, the stock overshoots to the downside.
What qualifies
- Stocks down 30%+ in the last month
- Stocks down 50%+ in the last 6 months
- Quality companies that crashed on guidance cuts (vs structural deterioration)
- Sectors in the doghouse (recently: office REITs, life science REITs, education stocks)
- Stocks that hit 52-week lows where the business is fundamentally intact
What to do
Monthly scan: filter our universe for stocks down >30% in the last month. For each, determine: "Is the business broken, or just the stock?" If just the stock, this is the entry point. If the business is broken (revenue collapsing, secular decline, fraud), pass. The hardest discipline is distinguishing temporary pain from terminal decline.
Example: ARE (Alexandria Real Estate) crashed 79% from peak as life science labs went into oversupply. But AI drug discovery actually increases wet lab demand — the crash created the entry point for a structural growth story.
Summary — Priority Order
- AGI Thesis — Highest priority. Whenever AGI-related news happens, check who benefits.
- Deep Value & Asymmetric Cyclicals — Park capital safely. Periodic screens.
- Superinvestor Holdings — Track Leopold, Weschler (private), Pabrai, Li Lu. Quarterly 13F refresh.
- News-Driven Movers (Up) — Active monitoring. Distinguish one-time pops from structural inflections.
- Crashed Stocks — Monthly scan for quality businesses with temporary problems.
This document is the source of truth for stock idea generation. Update as the framework evolves.