Super Investors Just Sold This Stock

we've already gone through the first round of super investors ones like Bill Amman and Warren Buffett if you haven't seen that video it's the most recent one on this channel just go back and watch it but now it's time for round two we have a whole new slate of super investors and in my opinion I actually think that this group of super investors may actually be better than the first this is a fantastic group we have first of all Stanley dren Miller who is a macro investor a Trader he goes short stocks and long stocks he's very public and his opinions and he has had incredible returns numbers that most super investors would dream of around 30% returns for 20 years it's incredible we have Dev karia the highquality monopolistic investor he only invests in companies that are really monopolies and his portfolio is incredibly concentrated into one company we'll be looking at that one company in this video we have Stuart mlin with triple fund he's like an enigma I can't find any pictures of him I can't find much written about him but triple front his fund is really really concentrated into high quality companies and it's had incredible performance we have Josh terasoft he's a super investor that's a little bit more small time he only controls a couple hundred million dollars and he likes to invest in tech companies then we have Brad gersner He's one that's a little bit more public he's on Twitter and social media he's made some statements about Google that I think are incorrect but I want to look at his updated view on Google and then of course we have n pelts the Disney investor we have Daniel lobe from third point and we have Mark Massie from alar Rock Partners another firm focused on very very powerful companies so this is a very good slate of super investors I'm excited to dive in to give perspective and context and commentary on what they're doing with their portfolios let's go ahead and jump in the first investor is a legend called Stanley dren Miller he's one that has gone decades with Incredible performance he takes a lot of Mac bets he takes concentrated positions he'll go long and short stocks and he's a bit of a Trader and a bit of an investor he'll take big concentrated positions in a stock hold it for a year or two and then dip out of it that's his investing style now that doesn't work for everyone he's not like a warm Buffet where you buy and hold for years but it works for Stanley Dr and Miller he has the record to back up what he says and that's what makes what he says so interesting so let's go ahead and take a look at his portfolio on recent trades the first thing that I see here his largest position is actually a call option on iwm meaning that he's trading this he's going long on it and iwm is an ETF for the Russell 2000 so he's going long on smaller companies right now probably because bigger ones traded up so much he sees some type of bet with smaller ones we also look at his biggest individual companies so this is an actual investment not a call option but his biggest individual investment is Microsoft it's 12% of the portfolio I look at Microsoft is just a very safe beted this is one that I notice at the top of many super investors portfolios Microsoft and Google are two of the favorites for super investors then in third place with an 11% position we have couping ticker symbol cpng which is an e-commerce company in South Korea then we have Tech Teck Tech is a materials company a commodity company that works in North America Europe and Asia so he has a bet on this but he's been reduced in his position it currently makes up around 5% of the portfolio then we get to VST this is another Energy company I've seen this one pop up in a couple super investors portfolios it depends on whether or not they're doing the oil trade the energy trade with someone like Stanley dren Miller he's always trading in and out of companies he's someone again that does a little bit of Swing trading he will buy highly sical companies then we have a Healthcare Company n this company seems very complicated to me it's a Diagnostics company that develops and commercializes molecular testing services worldwide now I don't think that he believes he has any expertise in this but he does have a lot of Partners and he trades based on themes this is another thing that I noticed with Stanley dren Miller he does not feel like he has to be experts in the industry or in the company to have a feeling on what direction it will trade if he believes there is some Trend or something to get in on he will trade that company now the next largest holding in hisort portfolio is NVIDIA this has been his biggest winner in his portfolio over the past couple of years but he recently sold a big chunk of this holding in fact he took Nvidia from a 9% waiting down to a 3.6% waiting so he took a lot of gains off the table reducing the stake by 71% in this interview he gives some background and explanation into his history with Nvidia the reason he got into the stock why he held it when he did and why he's now trimming it let's take a listen Nvidia my young partner was early with the Nvidia um he he called me in in the fall of 20 so he first says I wasn't early to Nvidia my young partner his investing partner was so there's like a a younger guy working with him that's like Nvidia is the place to be right now Stanley dren Miller listens to him because he realizes he's not an expert in this stuff so he's listening to his other partner here 22 and said that he thought all this excitement about blockchain was going to be far outweighed by Ai and um I asked him how to play it and he told me I by the way what an excellent observation by his partner he said all this excitement about blockchain is going to be far outweighed by AI That's a very simple statement but how accurate was that remember just a couple years ago people couldn't stop talking about blockchain that's all you heard about was the blockchain company there's means about every company becoming the blockchain company now it's AI he was ahead of his time by a couple years should buy this company inidia I didn't even know how to spell it um I bought it then a month later chat PT happened even an old guy like me could figure out okay what that meant so I increased the position substantially um I said in an interview in June of that year that I expected Nvidia for 2 or 3 years that this was a mega Trend like I'd never seen potentially bigger than the internet he says that he doesn't know how to spell Nvidia and this is the guy that's made millions billions of dollars on Nvidia a company he didn't know how to spell that's how that's how he trades it's so different than many investors if you ask other super investors the companies that they're invested in they will know what the CEO had for breakfast that day they'll know every single little detail about the company and here he is making a fortune not knowing how to spell the name of the company that he's investing hundreds of millions of dollars in it's incredible how good he is at intuition um but when the stock went from 150 to 900 I'm not Warren Buffett I don't own things for 10 or 20 years I wish I was Warren Buffett um and 150 to 900 yes we we did we did cut that position a lot of other positions uh in late March I just need a break we've had a we've had a hell of a run a lot of what we recognized uh has become recognized by the marketplace now pal was we expected pal to come back and rep pivot which he subsequently did um but no longterm we're as bullish on I AI as we've ever been I also you just wonder if we were all sitting here in 1999 talking about the internet or anybody was talking about it I don't think anybody would have estimated it would be as big as it got in 20 years um we didn't have the iPhone we didn't have Uber we didn't have Facebook yada yada um and yet if you bought the NASDAQ in 99 it went down 80% before that all came to fruition that's not going to happen with AI but it could rhyme AI could rhyme with the internet as as we go through all this Capital spending we need to do the payoff while it's incrementally coming in by the day um the big payoff might be four to 5 years from now so AI might be a little overhyped now but underhyped long term that's the headline right there AI may be a little overhyped right now but underhyped long term Stanley dren Miller re recognizes how much he's made on Nvidia how quickly he's made that money and how it's somewhat unlikely for nvidia's returns to go on much longer they could go on for a couple more quarters we could see some big quarters but stocks don't grow to the skies they have some type of resistance at some point if we look at Nvidia for example here you look at the total revenue and this is what it looks like these numbers are accurate you have a company that historically has been very cyclical it's gone up and down throughout the years and then it had the explosive AI wave that has taken it up multiples and multiples in Revenue look at this this is by quarter not by year it's incredible to look at when we break this down by segment it makes this more clear of what's really driving this big boom in Nvidia stock we can look at it from the smallest to the biggest we go to the automotive you can clearly see that the auto is not the driving force here Auto went up in 2022 it climbed to $300 million which is only a small portion of nvidia's Revenue and it stayed flat there 250 to 300 million then we look at professional visualization this portion of the company went up in 2021 it went back down and it's climbing back up a little bit but again this is not where the growth is happening from Nvidia it still hasn't beat the levels it was at in 2021 so this is not what's driving nvidia's rapid increase so it's not Automotive it's not professional visualization let's take a look if it gaming we can look at gaming here and it follows a similar pattern it went up really big in 2021 and then it fell in 2022 dramatically and it's climbing up even at a slower rate up to 2.87 billion and it did not grow from quarter to quarter last quarter so it went up just slightly quarter over quarter this is not where the growth is so we know the growth is not in gaming it's not in professional visualization and it's not an automotive we don't see a compelling growth CH here but if we cross out all of these and look at the data center this is where it's all coming from look at that growth and data center from $4 billion in q1 of 2023 to $10 billion so overd doubles then it goes from 10 billion to 14 billion then from 14 billion to 18 billion so obviously this is where all the growth is coming from for NVIDIA it is a company that has gone up multiples in stock price has had multiples in growth all really riant on one business line which is Data Centers when I look at that it makes me a little bit more concerned about the resiliency of this type of Revenue because even within their Data Center business there's only three or four companies driving this growth you have Microsoft you have meta you have Amazon buying chips from Nvidia that's what's driving the data center growth so you have all of this in one segment and then in that segment you have the majority of revenues coming from only a couple large companies to me that just feels a bit more risky so with Nvidia right now I can't make any short-term predictions the company really is unpredictable shortterm but I think there is more risk in the stock now than there was a few years ago so I agree with Stanley dren Miller in taking some off the table if you've been long Nvidia now next up we have a super investor called Dev Canaria which is one of my personal favorites I really like Dev he's a very steady investor and of course he invests in what he calls the highest quality companies in the world now of course there's a lot of investors saying the same thing I buy the highest quality companies everybody wants to believe that what they're buying is of the highest quality right but Dev basically argues that a lot of people say this but he's really doing it like he's really picking out the highest quality companies and he backs that up with a lot of data let's go ahead and take a look at his portfolio and his recent trades when we look at his recent trades we can see the total trades he did last quarter and the the only trade he did the only thing he did was he trimmed his FICO position by 2.53% so he sold a tiny fraction of his largest position now to put that in context FICO is such a large position in his portfolio currently that it makes up 30% of the portfolio that is insane this is a guy that's managing $3.6 billion and 30% a third of his money is in one company FICO it's not in apple it's not in Microsoft it's not in one of those staple companies that you can get away with investing in and nobody will bat an ey this is a company that most people don't know much about when we look at FICO just to give you an idea about the size of this company it's only a $34 billion market cap and again he has 30% of his portfolio in this one company the reason he has such a high percentage is because he first of all made it a very big concentrated bet so he started investing in FICO years ago if we look at the actual investing history here he started buying FICO we can look at the data he started buying it around a stock price of $500 486 502 397 433 466 400 so in this range he was really accumulating his position this was back in 2021 and he went on to TV he said that he thought it was dramatically undervalued he said that they have pricing changes they're going to be implementing new pricing he gave his entire case and he tried to encourage investors to join the ride of course we can see what's happened with FICO over that time period he was buying it at $480 to $500 and now FICO is $1,400 so he's made roughly three times his money on it and again he invested as a large position into this company so he put around 10% of his portfolio in the the company and now it's 30% of the portfolio his biggest most concentrated position is also a fantastic winner and what did he do this quarter after FICO has raced up to unbelievable valuations a 434 PE ratio and a free cashal yield of 94% that's more expensive than Costco if we look at Costco it has a similar PE ratio but it has a lower or in fact a higher free cash yield so on a free cash yield basis Costco is cheaper than FICO but yet he stayed invested in the stock he's held it he only trimmed 2.5% of his total position and this is why he does so well he has Diamond hands Dev karia barely sells companies he just holds on to him for year after year after year because he argues that if you find a great company if you find one of the best companies in the world you don't need to do much else you just find the company you buy a concentrated position and you hold on and he's done that to incredible success with his portfolio I believe that's the reason that his fund continues to grow I only checked on this a couple years ago and it was at $1 billion and now it's at $3.6 billion so he's growing Valley Forge Capital Management he's growing his fund and he's doing so with Market beating returns of both the S&P 500 and the QQQ it's really incredible to see now when I look at FICO I look at this stock and I've wanted to get into this one for a while but the valuation always kept me out I feel like I missed the Train on this one and it's just really taken off so it's one that I'm not going to get into just because I feel like I've I it would be chasing gains at this point and I don't like chasing gains so I'm going to sit this one out for now and hopefully wait for a dip but every time I wait for a dip it races up another 20% so maybe it will never happen and I'm okay if that's the case when we look at FICO there's different segments to their business the one that people know about is the scores business that's their main thing they do the FICO score but a lot of people don't realize that half their revenue similar to Moody's is software they sell software as a service so they have another subscription business model here that's aided by all the data they have in scores in fact they've reinvested a lot of the profits of scores into building out a software suite and they have an incredibly good customer base with high retention of their software now if we break down dev's portfolio we only have eight holding here but of those eight Holdings we really only have six that are meaningful the other ones are less than 1.7% so Aspen technology and asml are very small positions that I don't consider too meaningful if we break this down we have right here FICO as 30% So currently right now FICO is 30% of the portfolio MasterCard is 19.5% and Visa's 7% so combined you have around 28% of the port portfolio into the credit card companies they're actually Network companies that just Network groups together so this makes up visa and MasterCard majority of that being in MasterCard but you have FICO is 30% and then you have Visa Mastercard as roughly 30% and then you have S&P Global and Moody as 19% and 13% so combined 32% so we have the credit rating agencies I'll call them CR as 32% do you see a theme Here FICO a credit rating business is 30% of the portfolio Visa Mastercard two companies that work with credit cards and issuing credit and linking people together with credit is 28% and then you have SMP Global and Moody's which are credit rating agencies as 32% but even with this concentration I think they're right I think they have this overall thesis right I believe that credit will play a much bigger role in the future and these are a few groups of companies that really do have monopolies they are common languages for people to use in the entire industry and most of them in fact all of these are Global businesses so they're are common language across the entire Globe that's a very difficult Network effect to break so dev has done a great job running this portfolio so far but it hasn't been without its mistakes and one of them that I believe has been a mistake is his investment in Amazon the mistake wasn't that he invested in Amazon the mistake was that he sold Amazon at the wrong long time if we go back and look at an interview of when he originally was talking about Amazon and what he bought into the company I believe his research on Amazon his original research on it was correct I think he had an incredibly good thesis for Amazon here's him talking about the company about 18 months but there is an inflection point coming up in terms of operating earnings that will come from some of these other much much higher quality businesses like AWS and advertising um we think of all the the large technology companies at Amazon has the most optionality to go from where it is today to being a 10 trillion doll company we think it's much harder to see a 10 he just said that he thinks that Amazon out of all the big tech companies has the highest chance of becoming a 10 trillion doll company because of the optionality in the company which is something I fully agree with trillion dollar market cap for a Google or a Facebook or an Apple so we love the option value that Amazon has we like the networking effects that the e-commerce business provides we love many of their their younger businesses and terms of their business quality but you know many of them they're either dominant or will become ultimately dominant um and so it is an outlier from the capital intensity but we you know we are out of the box thinkers we're we we we have to look at each situation individually and on its merits um and we felt like the positives there outweighed the negatives that's his thoughts on Amazon and I agree with everything he said but I still agree with it he said that and then he eventually sold out of Amazon at the worst time possible now luckily for him his other Buys have done fantastic so there wasn't some huge loss here but I'd love to know what caused him to eventually sell out of Amazon I think the company's in such a good situation now now let's go ahead and move on to the next one now next up we have an investor called steuart mlin from triple frund partners and he's a bit of a a secret investor to some extent I can't find any pictures of them online now I'm no internet slle so maybe I'm not looking in the right places but I can't find anything no LinkedIn posts no even website for their fund but their fund reports every single quarter as a super investor they manage a lot of money $878 million and they have a very concentrated highquality portfolio so I think it's one worth looking at at the very top here we have Charter Communications and that's one that they've recently added to so they added to Charter and one of the trades they did last quarter was they sold out of Visa so they dumped their visa shares 2% of the portfolio and they added that to Charter Charter is not the type of investment that I ever see myself investing in it's a company that has a very low valuation and a high-f free cashal yield but I believe that's more because it's a troubled business model than a great value the stock is down 30% year-to date so it had a massive drop after earnings when we look at the revenue outside of a large acquisition the revenue is growing very slowly and it's almost flat for the past 2 years so you have very little Revenue growth there and the free cash flow has been going down every quarter for the past couple of years when you look at this it's not a great free cash flow profile so this is a internet company a cable company and one that I don't find attractive at all I'm not sure why super investors continue to put money into this company either way triple front Partners continues to put a lot of money into this company anytime there's a big dip so they see upside in it we also have trans diim is a 14% position they reduced this oneth slightly we have Google as a 13% position we have Amazon as an 11% position we have Microsoft as an 11% position so we have the big cloud companies as the top three Google Cloud AWS and Microsoft's azer I don't believe that's a coincidence I believe like me they have a favorable view on these Cloud companies after that you see some similarities here they have visa and Moody's they have lamb research and verisign these are all monopolistic companies and then they have a couple class one railroads Canadian Pacific and Union Pacific this portfolio is very strong and I think it will be Market beating especially because of their huge concentration into these Cloud companies if I had one criticism I think they invest in companies that in some cases can be value traps like Charter or companies that are growing Revenue very slowly those aren't ones that I typically like to jump into but overall this is a great portfolio now next up we have Josh terasoft who manages $353 million as of this last quarter he has made his name through Amazon and it continues to be his largest position 24% of the portfolio now he's had some other bets some of them have worked out some not but overall I like the direction his portfolio is going he has Brookfield Corp as his second position 18.35% he reduced that one slightly he has Burkshire Hathaway as his third position I think this investment was a mistake by Josh terasa not Berkshire hathway itself but the timing of this investment he went to a lot of high-risk companies when he should have gone into more conservative ones like Berkshire and then when all those high-risk companies came down he swapped out to Burkshire to jump to safety it was a very ill-timed bet so I don't like this move of jumping to a more conservative company when he should have been more aggressive but now I think Berkshire have the waste fine to hold because valuations are higher he has Microsoft he has Marco group he has Shopify these are all great companies he has one called monday.com they sell project management software similar to jera it's a lot of to-do lists and organizing things and flagging things and different lists of things you have to do so that's monday.com now they've been growing like crazy you can look at the revenue growth over time the problem is the financials have been negative for the past couple of years but you can see they're starting to go to the positive we have free cash flow here when we add in the stock based comp this is what it looks like the company is starting to generate real free cash so I do like monday.com from a product standpoint but the company's lacking an adequate Mo for me to invest in now we have Google as a 5% position we have berford capital and tanion these are all Holdings that he's had in the past so there's not any huge changes here he's made some minor additions to trupanion he sold a little bit of Google during its rise when he added a tiny bit to berford Capital so overall no big changes for Josh kosov next we have Brad gersner with altimeter altimer is a fund that focuses on these growth tech companies companies like snowflake that they got in Pre IPO meta Uber Nvidia Microsoft we have names that I hold in my portfolio Amazon we have pinu duo we have Tesla we have coupang we have a lot of different growth companies you recognize if we look at their biggest trades last quarter their biggest trade was selling a decent portion of snow so snowflake is a company they've held pre-ipo and they sold 177% of the company I think snowflake has been a bit of a failed investment since the start if you look at the performance since IPO this is what it looks like it has not performed well and the reason why is the valuation so even with the most optimistic fundamentals possible the valuation is still a major headwind for this stock so they're trimming their snowflake position they also trimmed their meta position they sold it down 2% of their position we have no meaningful changes to Uber Nvidia and Microsoft so they're still holding those companies and then they added significant ly to Amazon they increased their position size by 20% making it now 4% of the portfolio so that's one of the biggest bets they did and I agree with this one I think it's better late than never Amazon in my opinion is still a company that when I do the math when I tie the fundamentals with the valuation I still believe there's 20% upside in the stock to get to its fair value now one company that they bought into new was Google so they bought into this company but only a couple months ago Brad gersner spoke NE L about Google let's go ahead and jump to an interview this is with Brad gersner who is over altimer and this is what he had to say about Google 6 months ago okay so Josh here's my fundamental position search is going to be replaced by agent Le information Discovery I see it every day my 15-year-old son says Dad I don't use Google anymore I just use chat gbt I talked to 2,000 people at the javet center how many people have used chat GPT instead of Google over the course the last 2 days a thousand hands in the room go up I ask my analysts who are sitting on their desk they're replacing their use of Google with chat GPT we are having a fundamental structural shift in how people retrieve and discover answers to the questions they have so Google is going to have to compete in this new thing okay meta is going to compete Apple's going to compete Microsoft with co-pilot chat GPT Etc there going to be six seven eight incredible competitors there Google will be one of those competitors and let's assume that they're a very competent competitor because they have all of these assets the question to you do you what do you think the likelihood is that they're going to reconstruct as dominant of Monopoly in this new thing as they have in search so he's saying it's basically impossible for Google to maintain their moat in Search and retrieving information now Google stock has raced up around 30% since that interview and Brad gersner more recently has said that he basically has changed his mind he's looked at more of the data he's seen how Google's addressing this and he thinks there's actually some ways that Google will benefit so I'm not surprised to see the change of mind here but I think this was a bit of a mistake by Brad gersner I think Bill akman did a better job of buying Google during a time period where everyone else was freaking out about the company now next up we have the super investor Nelson pelts he's the one that had the big battle with Disney which he did end up losing he had to take the L on it he wanted to get different board seats on the Disney board he wanted to put some pressure on Bob Iger he wanted to say that Disney was doing a bad job and they needed a change I thought he wanted a lot of things for Disney that were completely appropriate now a lot of people criticize that he didn't offer some unique value to Disney like he wasn't an expert in the industry but that's not the purpose for the board the board's purpose is to offer oversight that the executives the experts in the industry are really doing their job in the favor of the shareholder so I was disappointed that Disney boxed him out of getting into the company but even after that he's still a Disney investor he still invested in the company with 49% of his portfolio so he's really backing Disney he really believes in the future of the company and I like seeing that when I look at Disney right now I know that I'm a Netflix investor I think Netflix has won the streaming War I think they're going to continue being the biggest media company but that doesn't mean that Disney will be a bad investment I think that Disney right now could turn out to be a decent investment over the next couple of years now looking at over the entire portfolio of Nelson pelts in his most recent trades he's only reduced a couple positions All State and Ferguson so he's done a couple reductions and other than that his portfolio looks the same as it did last quarter when I look over all of it I have to be honest I don't really like his portfolio it's okay but I don't like the waiting of the different positions half his portfolio is in Disney and I don't know why it needs to be that big of a position I think there's other better Investments right now and then there's other companies that I just don't really like I don't like Wendy's I don't like GE I don't like Janice that much I don't really love all state all that much I think they're fine but I don't think they're the strongest companies in the market so he has a very concentrated portfolio but I think there's other investors with equally concentrated portfolios that have better portfolio construction next up we have Daniel L from third point this is an investor that acts as both a normal passive investor in many companies but also an activist investor like Nelson pelts he'll put pressure on specific companies to do what he wants he manages around $8 billion and his portfolio is heavily Diversified so it's not heavily concentrated only in a handful of companies no his portfolio has dozens and dozens of positions so he's taking a different approach here which I think is fine but I look at his positions and I think that they're okay I like some of his recent buys I like that he's buying into Amazon I think a great buy and again better late than never with this one he's reducing Microsoft I don't think that's NE necessary right now but I don't mind that trade he also is reducing Bath and Body Works this is one that I would have never invested in in the first place then we get down to his new significant Buy in his portfolio which is Google which I think is a good buy it's not the best time to be buying Google I think you should have been buying it in 2022 or early 2023 so now is late but again given the options right now and what we have available to us I think Google's a decent buy today I think it will perform better the most companies in the market now next up we have Mark Massie of Alto Rock Partners they follow a similar style of investing in wide mode companies and they've had decent performance not the best it hasn't been 20% or 30% it's been an annualized 12% but I think they take a careful conservative approach now the trades they've done this quarter are to reduce their positions across the board so they sold a little bit of everything which makes me believe that they've had some redemptions redemptions are when some of their wealthy invest s decide to pull out their money of course they need to raise that Capital someplace and in many cases they'll just take a little bit from every single holding so they don't really change around their allocation too much they just withdraw money across the board so I don't really read into this reduction that much I think overall they've kept their portfolio mostly the same we have the top position which is an aerospace and design company trans diim that's done really well this year so it's up around 30% and that's their largest position at 30% of the portfolio we also have Amazon as number two we have Microsoft and Google as number three so again I see a common theme here everyone has fallen back in love with the cloud companies Amazon Microsoft and Google the three big cloud companies I think portfolios that have huge exposure to these three companies will do really well over the next 5 years that's why in my story fund I own all three of them after that we have the other common players in these highquality portfolios we have another one with Visa Moody's MasterCard and Charter I love Visa Moody's a MasterCard but again I'm not a fan of Charter this is a very strong portfolio overall I think it's going to continue to beat the market now that's all for this time I hope you enjoyed these insights into the Super investors if you like this series and you want to see quarterly updates on more Super investors make sure you subscribe to the channel other than that see you next time

Channel: Joseph Carlson After Hours

Views: 84,198

Keywords: The Joseph Carlson Show, investing, stocks, stock market, dividends, portfolio update, m1 finance

Id: YT0kTRmqyqM

Length: 34min 23sec (2063 seconds)

Published: Mon May 20 2024