Articles
The OpenAI Keynote by Stratechery
As usual, Stratechery is always ahead of the curve. I am surprise that the Open AI event didn’t catch more people attention as it is introducing a new platform that is possibly similar or bigger than IOS/Android.
There is alot of interesting application and use cases. For example, you can easily create your “2nd self“ by uploading all your knowledge with GPT or companies can create anything on the Open Ai platform. If any of you are interested, you can watch the original video uploaded in Youtube.
Competitive Advantage & Capital Allocation by Dorsey Asset Management
There is no surprises that it is coming from one of the former director from Morningstar- Pat Dorsey. From my research on Morningstar, it is well known that the founder is a big fan of Warren Buffett and the culture that is being instilled to them will be long lasting.
It summarizes all the key points on how company creates moat and protect it at all costs. This serves as a good reminder to all the higher quality investors.
• Intangible Assets (Brands, Patents, Licenses)
• Switching Costs
• Network Effects
• Cost Advantages
Podcast/interviews
How to Craft a Winning Investment Process and Spot World-Class Companies by Tegus
I believe that most people has no idea who is this guy - Reece Duca. The moment i finished listening to the interview, i knew that i have to share with my fellow subscribers. His track record easily will make him one of the few top investors in the world.
Kevin G has covered it well on why IGSB is so successful and i have extracted some of his thoughts as follows:
“I highlighted these five things IGSB did differently that contributed to their success:
1) They’re based in Santa Barbara, which, while is hardly the finance hub that New York is, or the tech hub that Silicon Valley is, has allowed them to stay grounded and maintain an independent viewpoint (similar to why/how Warren Buffett is based on Omaha).
2) They have a tight-knit team that was anchored by five partners (Reece, Tim, Bill, Mike, and Luise) who are tied together by decades of shared experiences including schooling, family, and sports, which has allowed them to build a long-lasting partnership based on a culture of trust and fun.
3) They manage no outside money—the fund was seeded with Reece’s stock market proceeds and they never took on outside clients, shareholders, or limited partners. They did use debt in the early days, but they have been debt free since the late 70s. Managing no outside money has 1) allowed them to be true principal investors and take on true long-term views and positions, and 2) allowed them to be flexible and invest where their interests take them (i.e., in the early days, IGSB was more focused on public equities, but have since moved more toward venture capital and company-building).
4) They mix diversification and concentration. They are diversified across stage and asset class, having invested in both public markets (i.e., Autodesk, FedEx, Mercado Libre, ToysRUs, Williams-Sonoma) and private markets (i.e., Advent, AirBnB, AppFolio, Facebook, The Learning Company), and even started a few (i.e., GlobalEnglish). However, they are concentrated in their investing, having 1) focused exclusively on best-in-class B2B software over the past few decades (i.e., VMS for real estate and farming) and 2) doubled down when they saw success (i.e., when AppFolio IPOed, IGSB owned more than 1/3 of the company).
5) They give new investors immediate responsibility, runway to grow, and a path to promotion. When Tim Bliss started at IGSB, Reece gave him a $500k portfolio to manage. He made Partner within 5 years. Today, Tim leads Partners Fund, which he started with several of his IGSB Partners. When Marc Stad first joined IGSB, he was given a $1mn portfolio to manage. He made Partner and was in charge of the firm’s Hong Kong office within 5 years. Today, Marc leads Dragoneer, which he started in 2012 and has grown into a ~$25bn fund.
Book
What I Learned About Investing from Darwin by Pulak Prasad
This is easily the best investment book that i have read so far this year. Pulak and his Nalanda team is truly a big believer in investing in high quality companies and they put their money where they preached. Their investing mantra is as simple as what Terry Smith has been always preaching: Buy high quality companies, Dont overpay and do nothing.
However, they only invest in Indian stocks and for anyone who is interested on their portfolio, click here. It is a must read for any aspire to be high quality investors.