High Conviction Concentrated Growth Investing, Fallacy Alarm

Fallacy Alarm

High Conviction Concentrated Growth Investing

High conviction concentrated growth investing. Blends single stock, macro and thematic research into powerful long and short ideas. I am convinced that a robust and comprehensive investment process requires macro and micro considerations. And it requires a deep understanding what you are looking for and what you are invested in. Digitization has changed the dynamics both how businesses operate and how investors compete for returns. Ideas can scale much faster and fail much faster than before. The biggest value creation happens before it can be spotted in financial statements. As a result, my approach can be best summarized as high conviction, high concentration growth investing, embedded into a macro framework built on the realization that our current demographic set-up, monetary paradigm and innovation cycle will likely deliver a strong decade for nominal and real returns of productive assets.

Equity Bottom-Up

Oracle Corporation supplies software for enterprise information management. The Company offers databases and relational servers, application development and decision support tools, and enterprise business applications. Oracle's software runs on network computers, personal digital assistants, set-top devices, PCs, workstations, minicomputers, mainframes, and massively parallel computers.

<ul><li>Oracle is on a mission to rival the Big Three cloud providers and its cloud ambitions are part of a theme that will determine GDP growth in the US and globally as a whole.</li><li>They are guiding for a 10x revenue increase in cloud computing in just four years which would transform Oracle Cloud from a nobody with 3% market share to a leading player with a business larger than AWS is today.</li><li>Most importantly, this guidance is based on contracted revenue, i.e. revenue that their customers (most importantly OpenAI) basically only can get out by declaring bankruptcy.</li></ul>

Oracle is on a mission to rival the Big Three cloud providers and its cloud ambitions are part of a theme that will determine GDP growth in the US and globally as a whole.They are guiding for a 10x revenue increase in cloud computing in just four years which would transform Oracle Cloud from a nobody with 3% market share to a leading player with a business larger than AWS is today.Most importantly, this guidance is based on contracted revenue, i.e. revenue that their customers (most importantly OpenAI) basically only can get out by declaring bankruptcy.

Meta Platforms Inc. operates as a social technology company. The Company builds applications and technologies that help people connect, find communities, and grow businesses. meta Platform is also involved in advertisements, augmented and virtual reality.

<ul><li>We won’t be generation heads-down forever. Handsets are impractical as our primary device to interact with information technology.</li><li>When we use them, we lose touch to the real world. Headsets are the obvious next step to allow for a more integrated experience.</li><li>Meta has been betting on the handset-to-headset transition for more than a decade. And they have been doing so with courage and determination.</li></ul>

We won’t be generation heads-down forever. Handsets are impractical as our primary device to interact with information technology.When we use them, we lose touch to the real world. Headsets are the obvious next step to allow for a more integrated experience.Meta has been betting on the handset-to-headset transition for more than a decade. And they have been doing so with courage and determination.

Anthropic, PBC operates as an AI safety and research company. The Company builds reliable, interpretable, and steerable AI systems. Anthropic serves customers in the United States.

<ul><li>Anthropic is a reckless and entitled AI start-up, symbolic of a tech industry that is completely out of control and drunk on its own success.</li><li>A judge in California just ruled that they can use copyrighted data without permission to train their models.</li><li>This allows them to make money of other people’s works without compensating them adequately.</li></ul>

Anthropic is a reckless and entitled AI start-up, symbolic of a tech industry that is completely out of control and drunk on its own success.A judge in California just ruled that they can use copyrighted data without permission to train their models.This allows them to make money of other people’s works without compensating them adequately.

UnitedHealth Group Incorporated owns and manages organized health systems in the United States and internationally.  The Company provides employers products and resources to plan and administer employee benefit programs.  UnitedHealth also serves the health needs of older Americans, provides specialized care services, and provides health care information and research to providers and payers.

<ul><li>Much of UnitedHealth’s business is just freeriding the US healthcare system.</li><li>To some extent it could even be called parasitic. 40% of its revenues come from government programs.</li><li>The most important one is Medicare Advantage (MA), which was originally designed to lower costs through the use of private carriers and their competition.</li></ul>

Much of UnitedHealth’s business is just freeriding the US healthcare system.To some extent it could even be called parasitic. 40% of its revenues come from government programs.The most important one is Medicare Advantage (MA), which was originally designed to lower costs through the use of private carriers and their competition.

<ul><li>The commercialization of general purpose humanoid robots could be the most disruptive innovation that the next few decades have in store for us.</li><li>It would be a new computing platform that would by far surpass everything that we have seen in personal and mobile computing.</li><li>AI would be liberated from cyberspace to real space. Instead of shifting bits and bytes around, it would be moving physical objects.</li></ul>

The commercialization of general purpose humanoid robots could be the most disruptive innovation that the next few decades have in store for us.It would be a new computing platform that would by far surpass everything that we have seen in personal and mobile computing.AI would be liberated from cyberspace to real space. Instead of shifting bits and bytes around, it would be moving physical objects.

If I Wanted to Bet on Humanoids, I'd Buy Meta.

High conviction concentrated growth investing. Blends single stock, macro and thematic research into powerful long and short ideas.

I am convinced that a robust and comprehensive investment process requires macro and micro considerations. And it requires a deep understanding what you are looking for and what you are invested in. Digitization has changed the dynamics both how businesses operate and how investors compete for returns. Ideas can scale much faster and fail much faster than before. The biggest value creation happens before it can be spotted in financial statements.

As a result, my approach can be best summarized as high conviction, high concentration growth investing, embedded into a macro framework built on the realization that our current demographic set-up, monetary paradigm and innovation cycle will likely deliver a strong decade for nominal and real returns of productive assets.