Stephen Ferringtion also known as @SFarringtonBKC on Twitter, he delivers a cyclical approach and bottom-up approach for investing and write about it on his substack Unemployed Value Degen. A former financial advisor at Merrill Lynch turned academic, Steven eventually realized that his ten years in blue-collar labor provided a good framework to participate in the stock markets.
We sat down with him to discuss why he’s turning over rocks in the 2026 small-cap market, his macro takes on the Trump economy, and why the next big trade might be hiding in your local IHOP.
The Blue-Collar Advantage in an Academic World
Steven’s path to the “Unemployed” title wasn’t linear. “I went back to college at 30 with the confidence of an adult who had already climbed a career path,” he explains. “I was exposed to academic theories, but I never had to become a true believer. My greatest advantage is not being tainted by the ‘statistics are the answer’ crisis currently paralyzing economics.”
For Steven, the market is less about dual causality and more about the “Peter Lynch” method: turning over 100 rocks to find the 10 that are mispriced.
Finding Value in “Degenerate” Situations
The name of his Substack, Unemployed Value Degen, highlights a specific irony: the best value is often found in “degenerate” or distressed situations.
“If a company is cheap, it’s because it has problems,” Steven says. “The trick is distinguishing between cyclical problems that will vanish in 18 months, and intractable problems like obsolescence. I’m looking for companies with ‘fixable’ problems a CEO transition, a spinoff sell-off, or a temporary cyclical trough.”
AI Losers and Industrial Winners
As we move into 2026, the market is obsessed with AI. While many are chasing “AI winners,” Steven sees a massive rotation into what Josh Brown calls HALO: Heavy Asset, Low Obsolescence.
“People are fleeing from AI fears into things like consumer staples and industrials,” Steven notes. “But the real story is the ‘thawing’ of the middle-class economy. We’ve seen three years of rising real wages, record-breaking holiday spending, and now, interest rate cuts. When the overnight rate drops, the home equity that the American middle class has been sitting on the most wealth they’ve ever had and its going to explode.”
Why He Likes Dine Brands (DIN)
One of the most fascinating “rocks” Steven has turned over recently is Dine Brands, the parent company of Applebee’s and IHOP. The story involves a former IHOP waitress turned CEO who was betrayed by a boss at Applebee’s and essentially engineered a merger just to fire him.
“It was merged for revenge, but they accidentally stumbled onto an incredible business model,” Steven laughs. “By putting an IHOP and an Applebee’s in the same square footage, you have a restaurant that is busy all day. You double the revenue and triple the profits on the same rent.”
With a 6,000 dollar tax rebate for seniors in the new tax bill and a blue-collar workforce making 200k dollars in the Permian Basin, Steven sees these mid-tier restaurants as “free money laying on the ground.”
“The Economy Is Going to Rip People’s Faces Off”
Despite the media “doomerism,” Steven is incredibly bullish on the second half of 2026. He points to several catalysts:
100% Accelerated Depreciation: A massive under-the-radar win for companies buying equipment.
Tariff Certainty: The paralysis of 2025 is over; business knows the rules now.
Fractional Reserve Re-levering: As Scott Bessent deregulates and loan growth starts, the multiplier effect will shock the “late-cycle” doomers.
“It gets back to Adam Smith,” Steven concludes. “Tolerable justice, easy taxes, and people will do the rest. The American economy is ready to go.”
If you want to Stephen’s work and deep dives into the “Price is Wrong” series, subscribe to Unemployed Value Degen.
Thanks for reading and listening to this episode, thank you Stephen for the opportunity to talk with you and offer a different perspective to the economy!
See you soon,
Lukas, Pixel Research
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Disclaimer
This is not financial advice as Pixel Research content is not meant to be a substitute for financial advice. Since we don’t offer financial advice, the material provided shouldn’t be interpreted as tailored investment advice. It is crucial to carry out in-depth research and, if required, speak with a licensed financial expert before making any financial decisions.
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