Patient Capital Management is a Baltimore asset manager founded in 2020 by Samantha McLemore, CFA — Bill Miller's long-time co-manager (working together since 2002, running the flagship Opportunity Equity strategy since 2014). Continuing the Miller-school contrarian tradition, it practices "time arbitrage": exploiting behavioral mispricing to concentrate in controversial growth names (tech, healthcare, Bitcoin-related) at deep discounts to intrinsic value. Its site preserves Bill Miller's complete 1995-2022 market letters, alongside ongoing quarterly letters and webinars.
In its Q3 2026 webinar, Patient Capital founder Samantha McLemore stated that the firm remains bullish on the long-term bull market despite negative sentiment around AI. She argued that pessimism is constructive as it keeps valuations in check. She significantly increased holdings in QXO (down from $28 to $10, she believes acquired assets are worth $26/share) and Precigen (she believes the first drug indication is worth $11/share, stock above $6). She also added to Chime (she believes target above $50) and Bitcoin (position ~3%).
At a Glance Patient Capital stated during its Q3 2026 webcast that, despite significant market noise (such as CoreWeave's unsecured yield reaching 15% and a Korean Neocloud IPO falling 32% on its first day), the firm maintains a bullish stance, believing the current bull market cycle will persist. I
Here is the English translation of the provided Chinese investment research notes, following all specified rules.
In the opening section of the webinar for the third quarter of 2026, Founder and Chief Investment Officer Samantha McLemore articulated the firm's core views on the current market environment. Despite negative noise surrounding the AI sector (such as Coreweave's surging yields and poor performance from some Neocloud IPOs), Patient Capital maintains a bullish stance, believing the current secular bull market is not over. She noted that rising interest rates are pressuring highly leveraged companies, but this has not shaken the robust underlying demand in AI. The pervasive market pessimism (e.g., hedge fund net long/short exposure at a 5-year low) is actually helping to suppress valuations, creating a constructive backdrop for the market. Citing technical analyst Rich Ross, she believes the market is poised for a year-end rally and emphasized AI's status as the core theme of this century.
Samantha McLemore stated the core view at the outset: the firm remains bullish and believes the current secular bull market is continuing. She acknowledged that the market is filled with significant noise, particularly in AI and Neocloud, citing Coreweave's unsecured bond yield reaching 15%, a Korean Neocloud company's IPO falling 32% on its first day, and Firmus withdrawing its IPO. These negative headlines are making the market nervous.
However, she argued this is more likely a buying opportunity, albeit one requiring careful stock selection. She pointed out that rising interest rates are pressuring companies with high leverage and those spending beyond their cash generation, but this is not due to fundamental business issues in AI. She emphasized that despite concerns over price declines and open-source models gaining share, demand growth in AI is enormous, and at the company level, they still see rapid revenue growth and strong incremental profitability. She believes what truly matters is the potential returns these companies can achieve, which currently appear quite robust.
McLemore argued that the intermittent fear and pessimism in the market since the launch of ChatGPT in late 2022 have actually been beneficial. She believes this sentiment has suppressed valuations, preventing them from becoming overheated. Furthermore, anything that slows supply growth while demand remains strong is constructive for the underlying economics.
She cited specific data to illustrate the market's degree of pessimism: hedge fund net long/short exposure is at a 5-year low, which is particularly striking given the market's poor performance in 2022. She believes this pessimism, combined with valuation corrections, creates a very constructive market backdrop.
McLemore referenced the views of Rich Ross, a technical analyst at Evercore ISI. Ross published a report that day stating, "Let's rotate into cyclical stocks." He believes the thesis for the S&P 500 (SPYs) and Nasdaq 100 (QQQs) to rally to new all-time highs by year-end remains valid, led by a rotation into cyclicals, semiconductors, banks, and bond proxies. He expects the dollar to face resistance and the 10-year Treasury yield to fall below 5%, which would support AI, the core theme of this century, as the semiconductor sector enters its best-performing month of the year (average gain of 6%) and is currently oversold and at support levels.
McLemore stated that if this scenario unfolds, the market could see a significant rally. She added that the firm would watch for negative signals in consumer spending (70% of the market) and AI (the foundational support for this bull market) as reasons to turn bearish, but has not seen any signs of trouble yet.
McLemore reiterated Patient Capital's investment philosophy. She believes the only sustainable advantage in the market is a behavioral advantage. Maintaining patience and a long-term perspective, especially in the current environment of high single-stock volatility, is a significant edge during periods of extreme fear and greed. She emphasized that what drives stock prices is the gap between fundamentals and market expectations. Their job is to find investment opportunities where there is a significant divergence between the fundamentals implied by the market and what they believe to be reasonable.
McLemore noted that the most remarkable aspect of the current market is exceptionally strong earnings growth. For 2026, S&P 500 earnings growth is expected to be 32%, significantly higher than the 17% estimate at the beginning of the year, representing a 15-percentage-point upward revision over six months. She believes this is the real force driving the market.
Despite strong market performance, it has not fully kept pace with earnings growth. As of the end of September, the S&P 500's forward P/E ratio was 19x, in line with the 10-year average and slightly below the 5-year average (19.9x). She believes this valuation level is quite constructive as long as earnings can continue to grow.
McLemore acknowledged the massive scale of capital expenditure in AI, which has raised concerns about historical "boom-bust" cycles. She believes that while the entire system may not generate adequate returns on capital, certain segments will be in a more favorable position. Currently, due to a shortage of computing power, most AI-related areas are generating good returns in the near term. The key lies in how supply and demand dynamics will evolve and whether these returns are sustainable.
She presented relevant data: the current AI capex boom, at 3.6% of GDP, has surpassed the historical railroad construction boom (slightly over 2%). For the hyperscale cloud providers, their 2026 capital expenditure is expected to reach $800 billion, potentially hitting $1.1 trillion next year. The good news is that these companies' operating cash flow is growing in tandem with capex, aiding their financing capacity. She mentioned that Amazon CEO Andy Jassy stated in a recent meeting that the company's capacity is sold out through the end of 2028, demonstrating extremely strong demand.
McLemore provided updates on several holdings:
McLemore believes that market corrections of 5% or 10% are common and, unless there is a fundamental change in the business environment, these corrections would be buying opportunities. She thinks the market's ultimate end might resemble the late 1990s or early 1970s, ending when valuations reach extreme levels. She noted that a significant rise in long-term interest rates to 6.5% would pose a serious problem for the market. She believes the current risk of a recession is low, but attention should be paid to geopolitical risks (e.g., China-Taiwan issues) and the narrowness of the market (only a few stocks driving gains).
| Position | Guest View or Explicit Action | Key Rationale & Data |
|---|---|---|
| Precigen | Significantly increased position; believes significant upside remains | Largest contributor; first drug indication valued at $11, current price above $6; pipeline asset valued at $8 |
| Norwegian Cruise Line | Hold and observe; sees potential for acquisition | Fundamentals disappointing, but new CEO is excellent; industry capacity constrained; high leverage is a risk |
| QXO | Significantly increased position (more than doubled); sees a tremendous opportunity | Stock corrected from $28 to $10.46; acquired assets alone worth $26/share, target price $40/share; hedge against AI holdings |
| Chime | Increased position; sees significant potential | Service cost of $12 vs. $45 for large banks; brand awareness surpasses Bank of America; target price above $50 |
| Meta | Increased position via options | Stock fell sharply on AI spending concerns, providing free option value |
| Adobe | New buy; sees extremely low expectations | 12% free cash flow yield; market has priced in a halt to growth, but the company is still growing |
| Biogen | Hold; optimistic about pipeline | Five Phase 3 assets with upcoming data readouts; Alzheimer's drug has upside potential |
| UnitedHealth (UNH) | Hold; optimistic about earnings improvement | Stock price at $419; expects it could rise above $600 over the next few years |
| Bitcoin | Increased position; allocation ~3%, aiming for 4% | Price rebounded from $59,000 to $82,000-$83,000; viewed as digital gold with long-term upside |
1. "Pessimism is Constructive" : Samantha McLemore believes that persistent fear and pessimism in the market help suppress valuations and prevent overheating. Hedge fund net long/short exposure at a 5-year low is itself a bullish signal, as it implies the market has already priced in a significant amount of negative expectations.
2. "Fundamentals vs. Expectations" : This is the core investment framework for Patient Capital. Stock prices are driven by the gap between a company's actual fundamental performance and the expectations already "priced in" by the market. Finding companies where market expectations are extremely low (reflected in low valuations) but fundamentals remain solid is the essence of value investing.
3. "Shared Economies of Scale" : Borrowing Nick Sleep's concept, McLemore points out that companies like Chime derive a cost advantage from scale, which they pass back to customers through lower prices or higher value, creating a growth flywheel. This model is key to generating long-term excess returns.
4. "Patience Creates Opportunity, But the Process is Painful" : Using QXO as an example, McLemore illustrated the practical difficulty of "patience" in value investing. A stock falling from $28 to $10, a decline of over 60%, is painful, but this pain is precisely what creates the opportunity to buy a high-quality asset at a very low price. She noted that Brad Jacobs' previous companies all experienced similar drawdowns before achieving nearly 40% compound annual growth.