Alex Ryan

@ThierryBorgeat Azure sale for worse product gcp is nuts

Chris Hohn did a 90-minute sit-down with Nicolai Tangen and then dropped an investor letter the FT got hold of last week. You’d think the guy who printed a record $18.9B last year would be doing victory laps. Instead he’s quietly rewiring his whole portfolio. My favorite takes from both: 1.The most important thing in investing isn’t growth. It’s barriers to entry. Growth without a moat is the airline industry: 5% volume growth for 100 years and basically zero cumulative profit. 2.There are only about 200 companies on earth he considers high-quality and investable. His fund holds 15. 3.Average holding period: 8 years. Some positions 13. “You have to hold the company forever, because the stock market may be at very bad prices when you want to sell.” 4.His real test for a moat: can the company price above inflation? A 20% margin business that prices 1% above inflation grows profits 5% faster than revenue. Forever. Almost no companies can do this. 5. Industries he won’t touch: banks, autos, retail, insurance, tobacco, asset managers, fossil fuel utilities, airlines, wireless telecom, media, advertising. On banks: “sooner or later someone without a lot of intelligence comes to run them, and then it can be toxic.” 6.On AI generally: call centers go bankrupt. Indian outsourcing coders are next. But for everyone else, AI lowers costs and raises productivity. Companies with real moats become MORE valuable. 7. Here’s the punchline. The FT got hold of his investor letter. He cut his Microsoft stake from 10% of the fund to 1%. Roughly $8B sold. He’d held it since 2017 through a 400% rally. His reason: AI could disrupt Office and Azure faster than the market thinks. 8.He moved that capital into Alphabet. Doubled it from 3% to 5%. Now his largest tech position. The world’s best quality investor sold Microsoft and bought Google because he thinks Google’s moat is more durable in an AI world. Not the consensus trade. 9.The underlying thesis: “AI eats software.” If AI agents do the work humans used to pay per-seat SaaS licenses for, the whole SaaS model gets re-rated. Oracle, Adobe, Salesforce all ~40% off highs. Microsoft 25% off. Market is starting to agree. 10.When to sell? Not when something gets expensive. When conviction drops. Valuation is one variable, conviction is the other. What kills you isn’t being wrong, it’s permanent loss of capital. 11.He admits hardcore activism doesn’t work anymore. Too much of the shareholder base is passive index funds. And even when activism wins, you usually win in a bad business. “The business always wins.” 12.Counterintuitive take: there are more good companies in public markets than in private equity. The best businesses are too big for PE to buy. And when public companies sell something to PE, they’re selling the assets they want to get rid of. 13.On intuition: “thinking without thinking.” Pattern recognition from 20 years of reps. It’s how he sniffed out Wirecard while the German establishment was defending it. “Most investors trust authority too much.” 14.He basically stopped shorting. “You’re going to be eventually right but not be able to fund the losses.” The first guy to short Wirecard had to cover 19 years before it hit zero. Buffett told him he and Charlie studied shorting and concluded it was too hard. 15.He gives almost everything away. ~$500M a year. $10 prevents an unwanted pregnancy in Africa. $40 saves a child from severe malnutrition. $50 prevents permanent blindness. 16.Tangen asks: advice to young people? Hohn, who runs the world’s most profitable hedge fund: “Go on a spiritual path.” The guy who made $18.9B last year ends the interview saying only purpose and meaning matter. The headline: the world’s best quality investor just sold his biggest tech compounder because he thinks AI is breaking the moat. Quietly, with conviction, on an 8-year horizon, while everyone else is still buying the AI winners of 2023.

@WindRiv26461749 @NUCLRGOLF Insane to take a below par on a gimme. Par is iffy

@NUCLRGOLF this is why normal guys hate to play golf with annoying rulebook Nazis like this. It's just round of golf FFS. Caveat: if you're playing for a lot of money or in a big tournament make him putt. Otherwise let the man have one moment of joy before he has to go back home

Who’s right in this situation? ⛳️ 👟

@TobytheOrca @frenbilt Yeah I love driving a car for 3 weeks, then having to buy another

@frenbilt Buy a beater for a few hundred dollars and drive it until it dies. Repeat the process. Why drop a bunch of money in maintenance?

“The insurance and maintenance is cheaper on a car with 300,000 miles”

@hamptonism Bruh it’s 400k. Live like you make $200k, live better than 99% of Americans and still retire at 45-50…sounds like the American dream tbh

This might be a hot take but I know someone at meta who makes $400k a year and is quite literally capped at that number for life - likely will never get a promotion strong enough to change that. 9-5 until they’re what, 50? This is not living. No matter the salary.

@KidsShawne @Mark___Taylor Who taught the youth about financial decision making?

@Mark___Taylor Because this is where they are pushing the youth......you can't afford it, but you can borrow. There is no saving when you are borrowing. The coat difference isn't just more expensive, it's drastically more expensive.

My first car was $300 dollars A similar beater today would be upwards of $6k The prevailing low wage job is 2-2.5x higher today but the beater is 20x higher. This is why people think you’re out of touch. Yeah “we” did that but we didn’t live in this economy.

@Invertible_Man @Duderichy Rly depends on situation and if they can actually afford what they’re buying

@Duderichy Would you marry someone with a running array of buy-now-pay-later loans

credit card debt: hard no $200k undergrad debt: no $200k med school debt: yeah car loans: depends mortgage: yeah

@RobP1369 @RenContessa @jakozloski Wow thanks captain obvious

@RenContessa @jakozloski It's the sunk cost of a decision that went wrong. Financially, it's much more beneficial to get it right the first time and not make the lawyers rich.

"Would you marry someone with substantial debt?" Outright "no": Women: 69% Men: 44% Women are 56% more likely to rule it out.

@away14375 @AquariusDream3r “Are you too stupid to read” and him being 40 is never mentioned in this thread. there is a spending problem for a lot of people. But even savers are much worse off today. It’s just the reality of the situation

@SVB_CIO @AquariusDream3r Are you too stupid to read? I was responding to OP who's a 40 year old man. And expense houses is no excuse to not have savings. How you supposed to take advantage of the coming fire sale when boomers move into retirement homes? Quit blackbilling and man up

You claim to make over $175k as a household. You say the boomer live through a golden era, but ignore that pre-covid (when you where working) had the lowest interest rates in living memory, yet you still didnt buy a house. YOU HAVE A SPENDING PROBLEM!

@LibertyJen @Pechumes @Mt2Aguy And the responses stop

@LibertyJen @Pechumes @Mt2Aguy Just because you stick your head in the sand and ignore reality doesn’t make it true

Absolutely no one “needs” a car payment. I bought my first 4 cars cash by saving. Buy a used beater. I did this as a 15 year old. The insurance and maintenance is also much cheaper. I didn’t have a car payment until I was in my 30’s!

@Jacob_Naviaux @REExchangor @tj28283 I’ll pay you this for this…waits til the last minute. Errr actually I won’t do that. I want a better deal. Yes it is lying if you have no intention of buying at the price you said you would

@REExchangor @tj28283 There is no lying. I didn’t make any promises I could pay a certain price when making an offer with a DD period. Makes no logical sense how one can view this as dishonest or unethical when you fully dissect what’s actually happening with what I posted and what I do.

Fixer upper gets listed for $250k. I offer $180k with 3% commission — I’m a licensed agent and my company is the buyer. Plan is to wholesale it for $190k. Needs $75k in work and will be worth $320k after repairs. Listing agent says too low. 4 weeks later our CRM notifies me the list price dropped to $225k. I follow up. Agent still says $180k is too low. Another month goes by. CRM notifies me again — price drops to $210k. I follow up. Agent says they think it’ll work. I draft the offer, send it over, and it gets accepted. We price the deal at $190k and sell it — signed contract and EMD in hand. While we’re still in DD, I tell the agent my buyer needs a $20k price reduction to move forward, but they’re ready to wire EM and waive the rest of DD. Seller meets us halfway. Price drops to $170k. We make $25k. That’s the exact play we run wholesaling MLS properties.

@JabautTim @RalphCapocci @dubsndoo Nice try

@RalphCapocci @dubsndoo Ratio compared to median income at the time was the same. Get better data.

Boomers didn’t buy RVs that they couldn’t afford, we tented it. Boomers didn’t buy new cars, we bought used ones. Boomers didn’t spend six bucks for a cup of coffee at Starbucks. Boomers could hang all their clothes in a four foot closet. Boomers didn’t cry how tough their lives were, we fought through the tough times. Boomers have everything they have because they managed their money, didn’t squander it on frivolous things, and invested it in proven technologies and long term successful businesses. Boomers have zero fucks to give for whiners, fools, and couch potatoes.

@away14375 @AquariusDream3r And still…highest ever I history

@SVB_CIO @AquariusDream3r Wait to avoid the interest debate because it show you talking out of your ass. People dont care about the price of the home they care about the monthly payment

@away14375 @AquariusDream3r I’m such an idiot. Why didn’t I buy a house at 17 when I didn’t know what college I was going to. Everyone and their mother knew rates were going to go to the highest in 20 years. How could I be so stupid. Do you realize how stupid you sound?

@SVB_CIO @AquariusDream3r Yeah thats why you buy a house when its cheap and how everyone and their mother knew the teens price & interest rates where historically cheap. Thats the point your currently failing to dispute

@NineCato @TalksPolitics24 Vs 12.99 here lol. I’d pay a buck for the employees to have a livable wage

@TalksPolitics24 You mean like Denmark where it’s $18-21 an hour, but taxed at 32%. Housing is at least as much as it is here. Where a standard combo meal at McDonalds is $14.50 plus tax.

Then your Big Mac will be $25

@away14375 @AquariusDream3r longtermtrends.com/home-price-med… Nice try

@SVB_CIO @AquariusDream3r I see you've given up arguing that pre-covid prices were obviously historically cheap, but you know you're wrong. Thanks for playing. You buy a house when it's affordable. And you buy was as soon as you can because inflation means the price will almost always go up

@jbulltard1 It’s in your body naturally , just lower concentration…up it for a few months and it’s like your body getting stressed. Much better than being obese

There is no free lunch

@away14375 @AquariusDream3r Interest rates are down 50% while prices are up 120%….

@SVB_CIO @AquariusDream3r Anyone as old as my parents knew the interest rates in the teens where historically low. You would have lived through the Volcker hikes. So yes everyone knew

@JunoIii @LibertyJen It’s about favoring asset holders vs young families. The people with assets are better off. People without not so much. If you saved nothing as a boomer/gen x I don’t feel bad for you at all

@LibertyJen Also, we are also living with the effects of current pricing. Our groceries, gas and utilities cost the same as the young people raging about them. We are just figuring out how to work it out because we have to.

Yes, everything used to be cheaper at some prior point in time. We know. This is not news. This is not new. Stop acting like you uniquely are the sole victim of price increases. EOM.