SHOWNOTES
A fast-paced tour through this week’s Exhibits A–C (U.S. finances, natural gas, oil), a history of Broadcom’s rise from spinoff to $1.7T giant, timely healthcare shifts (FDA fast paths, DTP), and quick hits on Tesla, Apple, NVIDIA/AMD, and Netflix’s cash engine.
[00:00] Intro (—)
Mike, Jason, and Hunt set up the week’s Cash Flow Memo themes across energy, technology, and healthcare, and point listeners to the memo and exhibits.
[00:00:20] Disclaimer (—)
Standard “not investment advice” reminder; do your own work.
[00:00:30] Exhibit C — Oil: weak prices & market share math
Geopolitical progress around the Gaza ceasefire reduces risk premia; Saudi policy tilts toward market share. Brent/WTI near ~$58 with a flat curve; oversupply could flip to contango. Hunt argues ~$50 oil isn’t sustainable versus decline curves, but normalization could take 12–18 months.
[00:02:41] Exhibit B — U.S. Natural Gas: resilient supply, watch LNG/power
Dry gas output hangs around ~106 (bcf/d context), supported by associated gas from the Permian. Power demand forecasts for 2026+ warrant caution; LNG and power market news are key swing variables for the strip.
[00:03:15] Exhibit A — U.S. Government Finances: deficit outlook improves
Deficit projections improve by roughly $400B amid talk of a full-year continuing resolution and tariff revenue changes. Rates path matters: FY26 interest cost modeled at ~3.5% of debt, with short-tenor Treasury financing potentially nudging the 10-year toward the low-3s. Policy mechanics (reconciliation/50 votes) and program trade-offs feature prominently.
[00:07:31] Company Deep Dive — Broadcom (AVGO): from HP roots to $1.7T (p.2)
Tracing lineage: HP components → Agilent (1999) → Avago (KKR/Silver Lake, 2005) → 2016 merger with Broadcom. Under Hock Tan, a disciplined M&A engine shifted mix toward software (CA Technologies, Symantec assets, VMware) while staying fabless in semis. AI data-center networking reignites hardware; the challenge now is finding needle-moving deals at $1.7T EV.
[00:16:12] Healthcare — FDA’s “super-accelerated” reviews
Nine first-wave reviews target serious unmet needs with 1–2 month timelines. A Regeneron gene therapy for genetic deafness shows 9/12 children regaining hearing—access could follow quickly if approved.
[00:17:06] Healthcare — Pharma goes DTP (direct-to-patient)
Genentech pilots direct sales for Rx flu therapies, fulfilled via Cost Plus Drug and Amazon Pharmacy. Same-day door delivery hints at a broader channel shift that compresses middlemen and meets patient convenience.
[00:17:58] Healthcare — TrumpRx adds IVF meds (Merck), 80% discount
Big list-to-cash gaps spotlight PBM spreads. If cash-pay platforms set a visible reference price, pressure escalates for Medicare/commercial plans to converge—potentially a snowball toward lower net drug pricing.
[00:19:06] Next Week Teaser: Blockchain
A candid, critical take is coming—why blockchain hasn’t worked (yet) and where it might.
[00:19:23] Future of American Healthcare: thought experiment
Could a Republican plan converge with parts of the Sanders wing on Medicare-for-all optionality and MFN pricing? The aim: bend U.S. healthcare from ~18–19% of GDP toward peer levels (~10–11%).
[00:20:48] Page 1 — Tesla earnings tonight (p.1)
Strong Q3 deliveries frame expectations; watch auto margins and the energy segment’s contribution to cash flow.
[00:21:26] Page 1 — Apple iPhone 17 traction (p.1)
OS progress lands well; iPhone “Air” China launch timing noted. Device is thinner/lighter yet larger-screened—appeal vs pocket-fit tradeoffs.
[00:22:31] Page 3 — NVIDIA vs. China: demand still outruns supply (p.3)
China restrictions damp direct sales, but global demand stays well above constrained supply. Data/workloads are portable; enforcement challenges suggest indirect access routes may persist.
[00:24:06] Page 3 — AMD’s OpenAI lane (p.3)
OpenAI’s announced 26GW data-center ambition stresses GPU supply and spurs hedging. NVIDIA sells at the rack level (networking + liquid cooling); AMD is building toward comparable systems—OpenAI may shoulder more integration to diversify.
[00:25:52] Page 4 — Netflix: the cash-flow franchise flywheel (p.4)
FCF ~$11B vs Disney’s ~$14B; reporting pivots underscore cash generation. A hit kids IP (“K-Pop Demon Hunters”) hints at a scalable franchise strategy—portfolio bets create room for outsized wins while maintaining margin discipline.
[00:29:15] Wrap-up & What’s Next
Back next week with blockchain and, soon after, a TSMC history session. Thanks for listening—share the memo and subscribe for the weekly cash-flow lens.
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