u/thenelston

Author's macro-adjusted residual framework ranks NDAQ cheap (low-20s percentile) and includes it in the recommended portfolio with about 22.3% weight as a cheaper, diversified infrastructure name. The mechanism is that NDAQ remains fundamentally tied to trading and market structure while offering diversified data/analytics exposure. Main stated risk is that its mixed business model makes single-denominator value conclusions fragile, and it screens less cheap on an EV/EBITDA basis.

Author's framework screens SCHW as cheap after macro adjustment (low-20s residual percentile) and calls it the most attractive broker-side expression of secular trading-volume growth. He assigns it roughly 32.8% weight in the risk-scaled portfolio, behind ICE but ahead of NDAQ. Main stated risk is idiosyncratic rate and balance-sheet risk that exchanges do not have.

Author's 24-month rolling macro-adjusted residual framework ranks ICE as the cheapest financial-plumbing name, near the 10th percentile with a strongly negative residual, and he assigns it the largest risk-scaled weight (~44.9%) in a long-only portfolio. The mechanism is entry discipline: buying exchanges whose multiples have compressed relative to macro drivers rather than chasing names where growth is already priced in. Main stated risk is that the hedged version of the backtest is much weaker, implying part of the realized performance is equity premia/timing rather than pure market-neutral alpha.