Chance Finucane — A Market Reversal Is Inevitable

Airbnb runs the home-rental marketplace. Finucane calls it a high-quality business but wouldn't touch it at its IPO — instead he watched it patiently for four or five years after it went public in 2020 near $145.

Only when the price fell to a little above $120 and the valuation looked reasonable did Oxbow buy, expecting to hold it for years. It's a live example of his "never chase the IPO, wait for the price you want" rule.

IDEXX makes veterinary diagnostic products (tests and instruments for animal clinics). He describes it as an "industrial-style" business: it sells niche products that are essential to its customers but only a small slice of their total costs.

That combination — you must have it, but it's cheap relative to everything else you spend — gives IDEXX reliability and pricing power. It's a recent addition to the growth portfolio: a steady, high-quality compounder bought instead of chasing AI stocks.

McKesson is one of the three giant companies that distribute prescription drugs from manufacturers to pharmacies across the country. It's a low-margin, high-volume logistics business.

The new angle: it's a beneficiary of the GLP-1 weight-loss-drug boom (Ozempic-type medicines), because it handles distributing those blockbuster drugs. A recent add that gives Oxbow healthcare exposure without paying AI-trade prices.

U.S. Bancorp is a large regional bank. Finucane calls it "probably the biggest, highest quality of the super regional banks" — the tier just below the megabanks.

It's a recent add that gives the portfolio financial-sector exposure at a reasonable valuation, part of rotating into unloved sectors (industrials, healthcare, financials) rather than the crowded AI names.

Northern Oil & Gas owns minority ("non-operated") stakes in oil and gas wells run by other companies, collecting its share of the production. It's a recent high-income-portfolio addition.

The reason for buying now: oil fell back below $70–$80 a barrel after spiking during the Iran war, so Oxbow is rebuilding the energy exposure it trimmed at the highs — buying the pullback at their target level.

Kimbell Royalty Partners owns royalty interests in oil and gas land — it collects a cut of the revenue from wells drilled on acreage it owns, without paying the drilling costs itself. That makes it a high-income, lower-risk way to own energy.

Like Northern Oil, it's a recent high-income add as Oxbow rebuilds energy exposure into the post-spike pullback in oil prices.

Fortinet is a cybersecurity company. In January its shares were cheap because investors lumped cybersecurity in with software names they feared AI would disrupt, so Oxbow bought at a little over 20× free cash flow (a reasonable price).

Six months later the market flipped and decided cybersecurity is an AI beneficiary (more AI means more security needed), and the stock doubled to over 40× free cash flow — near its highest valuation in 6–7 years. So Finucane cut the position in half: take the quick double, take your original money back off the table, and keep only a small stake. He still likes the business long-term — the sale is about valuation discipline, not a sour view.

Boeing is the aircraft maker. Finucane doesn't own the stock here — he uses it to illustrate the "opportunistic 10%" sleeve of the portfolio. A couple of years ago Boeing issued a convertible preferred: a bond-like security paying a fixed yield that can later be swapped into the common shares.

With the common stock beaten down, buying the convertible preferred let Oxbow collect a good yield while they waited, with the option to convert into the stock if it recovered — a "buy low, get paid to wait, hopefully convert higher" special situation.

Micron makes memory chips (DRAM). Finucane avoids it because the business is too cyclical — it lost money in 2022 and is now earning near Apple-level profits, showing how violently its earnings swing, and it lacks a durable competitive moat.

His killer argument uses a bullish analyst's own forecast: that analyst sees earnings per share hitting $250 in 2028 (on a doubled 90% gross margin) but then collapsing to $50 by 2030 as the memory cycle turns. Micron normally trades at about 8× earnings, so $50 × 8 ≈ $400 a share — versus a recent peak near $1,200. That's a two-thirds fall as the base case, using the optimist's numbers. Not a game he'll play.

SpaceX is Elon Musk's rocket and satellite company; it recently went (or is going) public. On its first trading day it was valued at about 79 times its past year's sales — or 58 times next year's expected revenue even giving it credit for growth. For comparison, Google IPO'd at 8.5 times revenue.

Oxbow's rule: pay at most ~10× revenue for a genuinely great grower. At 20–70×, every optimistic assumption is already priced in. It's already down ~12% from its first-day close, and history says hot mega-IPOs usually halve within their first year — so there's no rush, just watch and wait.

OpenAI (maker of ChatGPT) is one of the three giant private AI companies drawing enormous investor interest. Finucane groups it with SpaceX and Anthropic as trading at "20 to 70 times revenue" — far above the ~8.5× at which Google went public.

He also flags it as a source of accounting distortion: the big tech companies that own stakes in OpenAI book one-time paper gains on those stakes, which flatters their reported earnings even though it isn't real operating profit. His conclusion on the stock itself: pass — all the good news is already in the price.

Anthropic (maker of the Claude AI models) is the third of the mega private AI names. Same verdict as OpenAI and SpaceX: at 20–70 times revenue, it's a pass for a value-focused buyer.

He adds an interesting demand risk: even big customers like Microsoft are starting to route work to cheaper Chinese AI models that do about 90% of the job "at a fraction of what Anthropic or OpenAI might charge" — pressure on the frontier labs' economics that the valuations don't reflect.