RE: LeoThread 2025-12-28 11-42
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50% of IRA holdings were moved from $TSLA to $LMND
The IRA remains heavily weighted toward $TSLA, but for the first time in a long while the stock portfolio is no longer a single-stock position
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After re-engaging research on the company, it appears there's a massive misunderstanding of Lemonade's long-term potential
In the age of AI, AI-first companies like Lemonade and Tesla stand to capture outsized market share
The insurance market resembles the legacy auto market: slow, bloated, old-school. Lemonade is the disruptor
Lemonade is extremely lean compared to other players, and its leaders are tech-first. Tech-first leadership should see outsized gains versus incumbents in an AI era
As AI moves toward AGI, an AGI running an insurance company would be orders of magnitude more efficient than legacy insurers. Legacy firms are likely to be slow to adopt because of politics, preservationism, and lack of technical expertise
Global insurance is about $5 trillion per year (2025). Lemonade is roughly a $6 billion company. The largest insurer is about a $300 billion market cap (UnitedHealth); the next two are around $150 billion
An AI-first insurer will have an easier time diversifying risk over time, since the core function is assessing whether claims are legitimate and paying valid ones based on premiums.
Profit comes from accurately estimating the likelihood of things going wrong and charging fair rates for coverage
AI will be far better at building actuarial models from first principles and analyzing many data points for superior outcomes. Humans are limited by biological brains; AI is limited by compute, which is effectively scalable.
High-level actuarial talent is scarce
Because Lemonade was built on an AI-first premise, its operational leverage—keeping costs steady while scaling—should translate to strong earnings potential. As AI improves, expansion should be easier for Lemonade than for incumbents
A $6 billion valuation looks extremely low relative to long-term potential, and surviving the COVID shitshow provided invaluable experience and proof of resilience
The intended holding horizon for $LMND is 2030 at the earliest. NFA