The Oddsmaker Weekly — June 16, 2026

Every bubble begins with a true story.

The internet changed the world.

Cloud computing changed the world.

Smartphones changed the world.

Artificial intelligence will almost certainly change the world.

The problem is that investors consistently confuse:

"This technology will be important"

with

"This stock is a good investment."

Those are not the same thing.

In fact, throughout market history, the most dangerous losses have often come from investors being directionally correct.

The railroads changed America.

Thousands of investors still lost fortunes.

The automobile transformed transportation.

Hundreds of auto companies went bankrupt.

The internet changed civilization.

Cisco lost 80%.

Intel lost 80%.

Microsoft went nowhere for a decade.

The technology won.

Many investors didn't.

That distinction sits at the center of this week's Oddsmaker rankings.

The market is increasingly willing to pay almost any price for future possibilities while simultaneously discounting businesses producing extraordinary cash flows today.

The spread between our Best 1% and Worst 1% reached 256 points this week, one of the widest readings we've observed this year.

Whenever spreads become this wide, investors should pay attention.

Markets are telling us something.

The question is whether we are listening.

Most investors think there is one stock market.

There isn't.

There are currently two.

The first market trades on narratives.

The second trades on cash flows.

The narrative market includes:

The cash-flow market includes:

The fascinating part is not that these businesses are different.

The fascinating part is that investors are assigning dramatically different valuation standards to each group.

One group must prove almost nothing.

The other group must prove everything.

That imbalance creates opportunity.

One of the oldest truths in markets is that investors eventually become too optimistic and too pessimistic.

The crowd never stops making this mistake.

The names change.

Human behavior doesn't.

This week, 76% of the Worst 1% stocks are Information Technology companies.

Not profitable software companies.

Not dominant franchises.

Speculative technology companies.

Crypto miners.

Quantum computing.

Lidar.

Space communications.

eVTOL aircraft.

Pre-profit AI infrastructure.

Meanwhile, 24% of the Best 1% stocks are Energy companies.

That isn't because energy suddenly became sexy.

It didn't.

Quite the opposite.

Energy appears because investors continue to dislike it despite improving economics.

History suggests some of the best investments emerge precisely when investors become emotionally exhausted by a sector.

Nobody wanted energy in 2020.

Nobody wanted banks in 2009.

Nobody wanted technology in 2002.

The market's greatest opportunities rarely emerge from excitement.

They emerge from neglect.

The most important factor driving this week's rankings isn't valuation.

It's revisions.

Across the Best 1% portfolio, earnings estimates continue moving higher.

Analysts are increasing forecasts.

Margins are improving.

Cash flows are strengthening.

Fundamentals are getting better.

Yet prices remain surprisingly disconnected from those improvements.

This is exactly the environment where quantitative investing performs best.

The market remains anchored to old perceptions while businesses evolve underneath.

Investors continue seeing yesterday's company.

The data sees tomorrow's company.

The difference between those two views is where alpha comes from.

Investors love stories.

Stories are memorable.

Stories are emotional.

Stories create excitement.

Cash-flow statements don't.

That's precisely why opportunities emerge.

Imagine two businesses.

Business A:

Business B:

Most investors know which business should be more valuable.

Yet every cycle, capital flows toward Business B.

Not because investors are irrational.

Because investors systematically overestimate exciting futures and underestimate boring realities.

The market's favorite stories often become its most dangerous investments.

The market's least exciting businesses often become its best investments.

One of the most common questions we receive is:

"Why are so many energy and shipping companies appearing in the rankings?"

The answer is simple.

Because they are cheap.

Not optically cheap.

Actually cheap.

Many of these businesses trade at valuation levels that imply permanent decline despite generating substantial free cash flow.

Imperial Petroleum.

Dorian LPG.

Frontline.

SM Energy.

Devon Energy.

Antero Resources.

These companies share several characteristics:

Historically that combination has produced excellent results.

The market is essentially saying:

"We don't trust these earnings."

The model is saying:

"The market is too pessimistic."

Those are very different conclusions.

Karooooo may be the single best representation of what The Oddsmaker is designed to find.

The market sees:

A South African vehicle tracking company.

The model sees:

A recurring-revenue software platform with 98% subscription revenue, founder ownership, strong returns on capital, expanding international growth, and significant valuation support.

This is a classic category error.

Investors are valuing a software business like a hardware business.

Those mistakes can persist for years.

Then suddenly disappear.

When they do, returns can be extraordinary.

Karooooo isn't interesting because it's cheap.

It's interesting because it combines:

Finding all four simultaneously is rare.

Finding them while the stock remains ignored is rarer still.

One criticism often leveled at quantitative investing is that it cannot recognize greatness.

Nvidia disproves that idea.

Nvidia remains one of the strongest businesses in the world.

The valuation is not cheap.

The model knows that.

Yet Nvidia still ranks highly because quality matters.

Returns on capital matter.

Free cash flow matters.

Business quality matters.

The lesson is important.

The goal is not to buy cheap stocks.

The goal is to buy businesses where price and value diverge.

Sometimes that means buying statistically cheap companies.

Sometimes it means buying extraordinary businesses at reasonable prices.

Nvidia falls into the latter category.

The short portfolio looks completely different.

But it communicates the same message.

The worst-ranked companies are overwhelmingly concentrated in speculative technology.

The common characteristics are remarkably consistent:

The market is valuing these businesses based on what investors hope they become.

The model values them based on what they are.

That difference explains almost every name in the short portfolio.

No group better represents speculative enthusiasm than quantum computing.

Rigetti.

Quantum Computing Inc.

D-Wave.

Investors may ultimately be correct about the technology.

The technology may change the world.

That still doesn't mean today's valuations make sense.

Many of these businesses generate minimal revenue.

Some trade at valuation levels normally reserved for dominant software franchises.

The market is effectively assuming success years before success arrives.

History suggests that is a dangerous assumption.

The most interesting insight this week isn't about individual companies.

It's about market structure.

Value is working.

Estimate revisions are working.

Momentum is still working.

Quality is not.

That combination is unusual.

It suggests investors remain willing to chase trends while simultaneously rotating toward cheaper assets.

Eventually one of those forces will break.

When it does, dispersion could widen further.

That is exactly the environment where stock selection matters most.

Markets rarely ring a bell.

They rarely announce turning points.

They simply create conditions.

This week's conditions are clear.

The market is paying extraordinary prices for future possibilities.

The market is discounting present realities.

One side of the market is selling dreams.

The other side is selling cash flows.

The Oddsmaker has no opinion about which stories are most exciting.

It only cares where expectations and reality diverge.

Today that divergence remains substantial.

And history suggests that is where the best opportunities emerge.

This sets up Part II naturally: "The Best 10 Opportunities In The Market Right Now", where you deep-dive IMPP, KARO, NEM, DELL, NVDA, LPG, CF, DVN, ADSK, and INTU as full institutional-quality investment cases.

The objective of The Oddsmaker is not to find good companies.

The objective is to find situations where the market's perception and reality have diverged furthest.

This week's top opportunities fall into three distinct categories:

Each represents a different path to excess returns.

If I could only own one stock from this week's rankings, Karooooo would likely be the first name I'd investigate.

Not because it's the cheapest.

Not because it's the fastest growing.

Because it combines attributes that almost never coexist:

Most companies get two or three of those.

Karooooo gets all six.

A South African vehicle tracking company.

A subscription software platform.

Nearly 98% recurring revenue.

Over 2.5 million subscribers.

Strong international expansion.

Growing presence in Southeast Asia.

The market is valuing KARO closer to an industrial company than a SaaS company.

That disconnect is the opportunity.

The market currently values KARO around software recession levels.

If investors eventually recognize the recurring revenue profile, valuation alone could create substantial upside.

The company continues adding subscribers at an impressive pace.

Every new customer increases recurring revenue.

Many institutions still cannot own or do not follow the stock.

That can change quickly.

Management sacrifices margins to drive growth and expansion.

If subscriber growth slows, the valuation argument weakens significantly.

This is exactly the kind of misunderstood compounder that creates multi-year winners.

The market is offering investors a fascinating proposition:

Would you like to buy a profitable shipping company for less than the value of its cash flows?

Most investors answer no.

That's why opportunities exist.

At roughly:

the company trades at a valuation normally reserved for businesses facing existential threats.

Yet the business remains profitable.

Because shipping has burned investors repeatedly.

The scars remain.

The market assumes every shipping company will eventually destroy shareholder value.

Perhaps it will.

But at current valuations investors are already pricing that outcome.

Among the cheapest stocks globally.

Cash provides enormous downside protection.

The stock doesn't need perfection.

It simply needs conditions to remain acceptable.

Shipping rates collapse.

The highest reward-to-risk profile in the market.

Most AI stocks trade at valuations requiring perfection.

Dell doesn't.

Dell has become one of the largest beneficiaries of AI infrastructure spending.

Yet investors continue valuing it as a low-growth hardware company.

AI servers.

Enterprise infrastructure.

Storage.

Networking.

Recurring corporate relationships.

And real cash flows.

AI buildout remains early.

Still attractive relative to growth.

Real earnings support the stock.

AI spending slows.

AI exposure without speculative valuation.

Gold remains one of the most misunderstood assets.

Investors either love it or hate it.

Few analyze it rationally.

Unlike gold itself, Newmont provides:

Even modest increases drive earnings.

Returns on capital continue improving.

Large investors trust Newmont.

Gold declines.

One of the cleanest hard-asset opportunities available.

Autodesk isn't exciting.

That's exactly the point.

Autodesk dominates engineering and design software.

Once customers adopt it, switching becomes expensive.

The moat is enormous.

Because the market stopped paying attention.

The business remains excellent.

The stock hasn't.

Deeply entrenched.

Predictable and durable.

Exceptional economics.

Growth slows.

A compounder temporarily on sale.

Nobody gets excited about tax software.

Investors should.

TurboTax.

QuickBooks.

Credit Karma.

Massive ecosystem.

Enormous switching costs.

Customers rarely leave.

Can raise prices consistently.

Exceptional profitability.

Expectations remain high.

One of the strongest business models ever built.

Investors love growth.

They ignore yield.

The company currently produces a free cash flow yield exceeding many entire sectors.

Extraordinary.

Global energy trade remains healthy.

Replacement costs rising.

Shipping cycle reverses.

Cash flow eventually wins.

CF is one of those businesses investors forget exists until food prices rise.

Modern agriculture cannot function without nitrogen fertilizer.

Demand remains durable.

Financial flexibility.

Still inexpensive.

Nitrogen pricing weakens.

The market underestimates durability.

Many energy companies generate cash.

Few return it intelligently.

Devon does.

The company combines:

Management rewards shareholders.

Remain supportive.

Fundamentals improving.

Oil declines.

A shareholder-friendly cash machine.

Most expensive stocks become dangerous.

Most market darlings disappoint.

Most momentum stocks eventually collapse.

Nvidia breaks those rules.

Because Nvidia isn't merely a stock.

It's arguably the best business in the world.

The company scores poorly only on valuation.

Everything else is elite.

Still dominant.

Competitors remain years behind.

Extraordinary profitability.

Expectations become impossible to satisfy.

The best business in the market can still be a good investment.

What is most striking about this list is what it does not contain.

No quantum computing.

No crypto miners.

No flying taxis.

No speculative moonshots.

Instead, the highest-ranked opportunities are:

History suggests those characteristics are far more predictive of long-term wealth creation than exciting narratives.

The market is currently rewarding stories.

The Oddsmaker continues rewarding economics.

And eventually, economics tends to win.

Part III should then become: "The 10 Most Dangerous Stocks In The Market" (NVTS, RGTI, AEHR, WULF, ASTS, AI, FCEL, HUT, CORZ, QBTS) and explain why investors consistently overpay for possibility.