The Joseph Carlson Show This Perfect Stock Is Down 50%
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Mar 25, 2026 They dig into a once‑loved stock that has plunged over 50% and why investors turned away. Discussion covers competitive threats, pricing fights, and political scrutiny around credit scoring. They also examine an ambitious $9 trillion market cap target from a major tech company. The segment ends with a comical fail about a dancing robot gone wrong.
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FICO As The Financially Perfect Franchise
- FICO was once the archetype of a perfect, capital-efficient franchise with strong pricing power and network effects.
- Joseph Carlson cites Devkantasarya's thesis showing rising revenue, expanding operating margins, shrinking shares outstanding, and minimal capex making it ideal.
Moat Is Network Not Algorithm
- The core moat is FICO's network effect and brand, not superior predictive accuracy of its scoring model.
- Carlson notes score coefficients plateaued near 0.70 and older FICO versions remain widely used, emphasizing embeddedness.
Regulation Fueled FICO's Embeddedness
- FICO's market dominance grew partly because regulators mandated its use for conforming mortgages, not purely free-market adoption.
- Carlson argues that government mandates helped FICO embed into lender workflows before price increases.