Investing
This exists on my website for 4 reasons:
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The hand organizes the mind. Especially public facing writing.
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A window into my decision making and prognostication.
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I invest in businesses similar to how I operate them, and visa versa.
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Many lessons learned in investing apply broadly to living, and visa versa.
The Scoreboard
One of my favorite things about investing is there's an objective, omnipresent scoreboard.
Here's mine, using SPY as the benchmark portfolio compared to the stock's I've purchased. If I were less polite, I'd include the $s for ease of analysis. But decorum is the better part of valor when showcasing personal capital, so we're looking at rate of return only.
Things I've Shared
Broad Predictions
These are predictions about the future of the world that underpin and inform what I choose to invest in. They are the practical distillation of my hypothesis and concepts.
01
The future will be better than the past and the optimists will continue to be correct.
I invest only to share in a success, not profit from the lack of - over the long term.
02
Electronic technology will be more pervasive in the future than it is now.
Example areas: Semiconductors, computing infrastructure, electrification.
03
Humans will be more connected and interconnected in the future than now.
Example areas: Communication infrastructure, social networks, semiconductors.
04
Data will be more abundant, valuable, and pervasive in the future than now.
Example areas: Computing infrastructure, software platforms, semiconductors.
05
Humans will consume more energy at a lower marginal cost in the future than now.
Example areas: Uranium, electrification, computing.
Core Concepts
Approaches
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This is how I operationalize the predictions and concepts.
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Phrased differently, these are the things I look for in an investing opportunity.
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The more of these it aligns to, the better.
Picks and Shovels
If there's a gold rush, what do you invest in? Gold? Mining? Distribution? Jewelry?
The picks and shovels. Ask Levi Strauss how that worked out.
Durable Returns
Many of my influences are value based investors. I look for durable return sources. To be durable, one must persist over a long period of time.
I'm not running a VC, not yet. I want cash flows I can model and predict.
Sources of Power
Which is a better asset to own, the code for a LLM or the servers required to run the code? A desktop app or OS?
I say servers and OS. I want to own the asset with more leverage.
Adaptability
An immutable law of nature is the more adaptable species is advantaged. Change is constant and the rate of change is accelerating.
Adaptability underwrites holding assets for the long term.
Willingness to be Wrong
I'm a contrarian at heart. Capital markets have few winners and many losers.
Minority membership is required to access to asymmetric returns.
Potential
Predicting the future is an inherently creative and error prone process. Is there enough upside the winners pay for the losers?
Capital market returns generally follow power law distributions.
Influences, Teachers, Mentors
These are the folks who have played an outsized role in shaping my investing philosophy and style. I owe much of my knowledge to their tutelage, in this arena and in life.
Brad Warner
Yeah, this is my dad. He balances an intuitive, cowboy style with a defense is the best offense strategy.
Always operate from a position of strength and optionality. Trust yourself and your process, act with caution and conviction. It's only money after all.
Craig Shaver
Went to HS with my dad, I grew up 3 houses away from Craig. He was a mentor until I came of age, then my financial advisor until I turned 30. A disciple of Buffet and Munger.
The 8th wonder of the world is compounding, let your winners ride, doing less is often doing more. Money is a means to an end, figure out what that end is.
Jeff Bezos
I spent 6 formative years at Amazon. Jeff is one of the greatest capital allocators in history. I couldn't help but to learn a thing or two.
Asymmetric bets, thinking in probabilities, inevitable futures, and willingness to be wrong come to mind.
Investment firm I usually concur with. They think about the world and world of investing similarly to me.
Complex adaptive systems, optionality and resilience, broad predictions, and of course - the world of Semiconductors.
Famous investor, business thinker, consultant, and strategy maven. Introduced the world to the concept of powers in a business strategy.
How to frame and dissect power sources, platform model analysis, execution trumps ideas and you need both to be legendary.
Listen, Read, Learn
This is a collection of content I've found tremendously helpful, interesting, or formative in my personal journey. Without further ado, the greatest hits!
Complexity Investing - NZS Capital
We believe that the economy and the stock market are best understood as biological systems: specifically, complex adaptive systems. Complex systems have unpredictable outcomes; therefore, as investors, we focus on companies that are adaptable, long-term focused, innovative, possess long-duration growth, and maximize non-zero-sum outcomes.
Our whitepaper published in 2014, Complexity Investing, describes this process in detail and can be downloaded here.
A condensed version of the paper is also available here.