Howard Lutnick has backed a challenger to CME Group's futures business for several years, and Nick Healy puts its market share at about 1%.
Most stock pitches argue that a company is about to do something new. Healy's argument for Intercontinental Exchange is the opposite: that nothing new can be done to it, because liquidity gathers where liquidity already is.
"Over the past few years, Howard Lutnick has backed a company called FMX that has attempted to attack CME. And despite all the hype, despite all the funding, it has around 1% market share, which in my books is a failure and really supports the quality of futures exchanges."
Healy and Doug Isles both covered aerospace and defense as analysts before they ran money, which is why the most technical exchange of the episode is about a French jet-engine maker rather than about a bank.
I listened to the full episode so you can skip it.
Here are the 4 calls that matter.
👤 Guests: Nick Healy, Portfolio Manager at Wilson Asset Management, who covered aerospace and defense as an analyst before joining the firm; and Doug Isles, Portfolio Manager at GCQ Funds Management, also a former aerospace analyst
🎙️ Host: Ally Selby, who presents Buy or Sell for Equity Mates and is marketing and distribution lead at Minotaur Capital
📰 Published: 10 September 2026 on YouTube (Buy or Sell)
🔴 YouTube | 🟣 Apple Podcasts | ⏱️ 10 min
Key Takeaways
A well-funded attack on a futures exchange has produced about 1% market share in several years
Healy treats that as proof of the moat rather than as evidence that the incumbent is complacent
Isles will not buy Intercontinental Exchange at all, and owns CME Group instead as the purer version of the same idea
Visa's protection is the three-sided network, not the payment technology, which has already changed four times
Almost 5 billion cards, 14,500 issuing banks and about 170 million merchants, on Isles's figures
The risk to Visa is that the market falls in love with it and pays a Costco multiple
Isles says that is not today: it is trading at a smaller premium to the market than usual
Safran trades at a significant discount to GE, and the two companies share a 50/50 engine joint venture
Healy calls that one of the biggest misunderstandings in the market, and still would not buy it at the current price
The two managers read the same FICO facts in opposite directions
Healy sees a regulator inviting competition because FICO took too much price; Isles sees pricing power the market has already written off
1. Why Exchanges Win by Default
Selby opened on Healy's highest-conviction pick, Intercontinental Exchange, and noted that the share price is down around 9% over the last 12 months. Healy's case does not start with the share price. It starts with the structure of the business.
ICE is a futures exchange that also sells mortgage technology and data services
Liquidity is the moat, and it compounds on itself. "The exchange with the most liquidity tends to offer the tightest spreads and so any newcomer to the market tends to trade at the largest exchange. You get these winner take all dynamics." — Nick Healy
The proof Healy reaches for is a well-funded attack that went nowhere. Howard Lutnick has backed FMX for several years to take on CME, another futures exchange focused more on interest rates, and Healy puts the result at about 1% market share
He does not treat that as a comment on FMX. He treats it as a measurement of how hard the category is to enter
The second argument is that ICE is paid by uncertainty rather than hurt by it. It runs a large energy trading complex, and with the Strait of Hormuz closed there is a great deal for its customers to hedge
Healy credits ICE's founder and chief executive, Jeff Sprecher, with having built a business that works across environments rather than one tuned to a single set of conditions
Isles would not buy it — but he would buy the category. "I'm going to have to say sell, Nick, I'm afraid. But we like the space." GCQ owns CME Group instead: derivatives, interest rates, equity indices and its own energy indices
His objection is that ICE bolts a mortgage-technology business and a data business onto the exchange. CME, in his description, is the pure version of the same investment
2. Visa Is a Network, Not Tech
Selby put Isles's own pick to him, with a piece of the show's own framing attached: Visa is up 10% over the last year, and Equity Mates co-founder Ren calls it one of the best stocks in the world. Isles took the compliment and then explained why the company fits GCQ's mandate.
GCQ is looking for monopolies and duopolies, and Visa is the larger half of one. The firm also owns Mastercard, in smaller size
The competitive advantage is the network, and Isles rates network effects the best kind a company can have. He calls Visa "the ultimate in network effect"
The technology has already been replaced repeatedly without touching the franchise. "This started off as a cardboard card. We had the knuckle duster. We had swipes. We had tap." Visa began in the 1950s and has been running for more than 70 years
This is the answer to the question of whether artificial intelligence threatens the business. Isles's view is that it does not, because the thing being defended was never the technology
The scale of the three-sided network is the argument. "I think there's almost 5 billion cards in existence. There are 14 and a half thousand banks issuing cards. There's about 170 million merchants where Visa is made available. So it's a three-sided network. It's consumers, it's merchants, and it's the issuing banks."
What the shareholder is actually buying is global consumption, plus three growth layers on top of it: the shift from cash to digital payments, cross-border volume from travel, which earns more, and e-commerce
On the valuation, Isles argues the premium is smaller than usual rather than absent. A company like this should trade above the market, he says, and right now the gap is narrower than normal — which is what leads him to expect it to "grind out double digit returns into the future"
Healy agrees, and owns it. He visited the company in San Francisco in March, and says the opportunity in value-added services is enormous
What would flip either of them
Isles's sell trigger is affection, not disruption. "So, currently the Visa is exceptionally attractive, but it's always possible for a company like this to start trading like a Costco or another fantastic company that's just at far too high a price." Asked whether that is today, he said it is not
Healy has traded around the pair before. He said his firm was trimming Mastercard around February, because it had held up better than a lot of companies the market thought were squarely exposed to AI, and has been adding back since
His reason for staying is replacement cost rather than momentum: he does not think the network these two have built could realistically be rebuilt by anyone
3. Safran at a Discount to GE
The format then changed. Each manager was shown the other's top 20 holdings on screen and asked to name one he would sell. Isles went first, and picked the position where his own history gives him the strongest opinion.
Isles's sell is Safran, and the objection is price rather than quality. "I used to be an aerospace analyst back in the day, and I think, you know, the engine businesses are fantastic businesses, but when I look at the price, I really struggle with Safran today. So, I'm going to recommend that you sell Safran."
Healy turned out to have the same background. "Funnily enough, I have that in common with Doug. I was also an aerospace and defense analyst, prior to joining Wilson." He rates engine makers among the best places to sit in the aerospace and defense supply chain
His bull case is a relative-value argument the market keeps ignoring. Safran trades at a significant discount to GE; Healy thinks investors crowd into GE because it is American and better liked; and the two companies run the CFM engine business as a 50/50 joint venture, so a large part of what one owns the other owns too
He calls that one of the biggest misunderstandings in the market
Even so, he is not buying it here. "Safran's not a cheap company, but in the 20s PE it's it's still very attractively priced for the growth and the quality that you get." He had it on a watch list and looked for an entry point when the Iran situation broke, and it never got cheap enough
Isles, having just called it a sell, said his own firm had been buying into the same weakness. "Yeah, funnily enough, we added during the uncertainty in the Middle East."
4. FICO Took Too Much Price
Healy's pick from GCQ's list is the one place the two of them genuinely do not agree, and both have done the work.
Healy's objection is regulatory, and it follows from pricing. FICO supplies the mortgage scores American consumers are assessed on, and Healy says its moat has historically been very strong. "The challenge I'm sure Doug can predict with FICO is they've taken a lot of price in their core scores business over the past few years."
His account of the sequence: the regulator was initially unsure who had taken the price, FICO pointed at the credit bureaus, and everybody tried to avoid the blame
The approval of VantageScore is what he reads as the verdict. In his view it shows the regulator now understands where the price increases came from and wants more competition in mortgage credit scoring. A company that may have taken too much price is a red flag for him whatever the quality of the business
Isles has owned it, sold it and bought it back, and has been calling around the industry. "The vantage score is public. People are aware of it, but it's kind of like another example we know of it. You know, S&P and Moody's when you go for a credit score or credit rating for a bond, both of them have 100% market share."
The analogy is the point: a second approved supplier does not, on its own, take share from an embedded standard
His conclusion runs the other way from Healy's. "We don't see a situation where FICO loses share. We think the FICO credit score is embedded in the system. And the more work we do on it and the more we talk to players in the industry, we actually think they still have some pricing power available to them."
He also thinks the market is only looking at the mortgage business. FICO has other lines — he singles out auto, where he says the company is not exploiting the pricing power it has — and on that basis he expects it to surprise to the upside
Bonus Insights
The show's format is built to produce disagreement, and here it produced two. Each guest pitches a highest-conviction name, the other rules buy or sell on it, and then each is handed the other's top 20 and asked for a sell. Selby closed by saying she loved the disagreement
Both managers came out of aerospace research, which is why a French engine maker drew the most detailed exchange of the episode and why both of them reached for the CFM joint venture unprompted
The two firms are hunting the same kind of business from different angles. GCQ screens for monopolies and duopolies; WAM's holdings here — an exchange, a payments network, an engine maker inside a duopoly joint venture — are the same structure under a different label, which is why the disagreements are about price rather than about quality
The episode's actual conclusion is that these two managers agree almost entirely on what a good business looks like — a network or an exchange that gets stronger as it gets bigger — and disagree only on whether a regulator can take price away from one.
Products, Companies & Tools Mentioned
Intercontinental Exchange (Healy's highest-conviction pick: a futures exchange with mortgage technology and data attached, down about 9% over 12 months, which he says benefits from the uncertainty around the Strait of Hormuz)
CME Group (The futures exchange Isles owns instead — interest rates, equity indices, its own energy indices — which he calls a purer play than ICE)
FMX (The Howard Lutnick-backed challenger to CME. Healy puts its share at about 1% after several years and a lot of funding, and calls that a failure)
Visa and Mastercard (The payments duopoly. GCQ owns both, Visa in larger size; Healy's fund owns Visa too and he rates the value-added services opportunity as enormous)
Safran (Isles's sell call off WAM's list on price; Healy's discount-to-GE argument, and a name he watched for an entry point during the Iran situation without getting one)
GE Aerospace and CFM International (The comparison Healy says the market misreads: investors crowd into GE, which runs CFM as a 50/50 joint venture with Safran)
FICO (The episode's one real disagreement. Healy sees a company that took too much price in mortgage credit scoring; Isles sees an embedded standard with pricing power still unused in auto)
VantageScore (The newly approved competitor in credit scoring. Healy reads the approval as the regulator inviting competition; Isles reads it as a known quantity that changes nothing)
S&P Global and Moody's (Isles's analogy for an embedded standard — both have 100% share of bond ratings because issuers use both)
Costco (Isles's shorthand for the risk in a great business: the market falls in love with it and the price stops making sense)
Wilson Asset Management and GCQ Funds Management (The two firms, and the two portfolios each guest was asked to attack)
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