The Next FANGs

[fareastwarriors]

If you believe in the future of the metaverse, Unity might be a major player. 

[rogermunibond]

1 hour ago, Xerxes said:

 so then i guess i sold my shares to you in March 2020 ... LOL

 

To make both of you feel better I owned NVDA from 2005 to 2012.  And sold around $7.50 per share (split adjusted).

 

I reasoned that the GPU was just too cyclical based on the ups and downs of the console market.  At that time Jensen's visionary views on computation and AI etc were an interesting distraction.

 

 

[clutch]

On 11/19/2021 at 11:54 AM, fareastwarriors said:

If you believe in the future of the metaverse, Unity might be a major player. 

 

Seriously though, Unity is not just for fun. Their engine could be a major player in the Digital Twin space.

[Spekulatius]

13 hours ago, clutch said:

 

Seriously though, Unity is not just for fun. Their engine could be a major player in the Digital Twin space.

I think it is likely that FB develops their own operating system for the Metaverse. It is unlikely that something geared towards gaming like Unity meets their requirements.

After all, they intend to put $10B a year into this effort and that should be some development. Unity looks totally overvalued to me and a lot of this seems based on the Metaverse narrative. I think if FB buys something, it is going to be a few private companies that nobody of us heard of yet.

[Xerxes]

We can add Masayoshi Son to the list of folks who sold Nvidia too early in 2018, during the crypto winter. In fact he did it brilliantly using derivative hedging that went into money when Nvidia' share price collapsed. 

 

And for whatever reason, he never invested into Tesla. That I cannot understand, neither as a strategic investor nor as a gamble (i.e. through SB Northstar)

 

That being said he sold ARM to Nvidia for $40 billion in Sept 2020, mostly in stock. That stock portion has appreciated a whopping 150% since, effectively giving Softbank a windfall, if the deal goes through,

 

Chipmaker Nvidia has agreed to buy Arm Holdings, a designer of chips for mobile phones, from SoftBank in a deal worth $40 billion, the companies announced Sunday. The deal will include $21.5 billion in Nvidia stock and $12 billion in cash, including $2 billion payable at signing.

 

Nvidia to buy Arm Holdings from SoftBank for $40 billion (cnbc.com)

[Gregmal]

To me, the most interesting part of the NVDA story is that it, like a number of other companies, basically hid behind what was largely a false narrative about overvalued bubble tech stocks. For sure this is true for some, but for others, myself included, this sort of lazy fallback underpinning to some of my assumptions allowed me to completely miss something that with a little work would have been pretty obvious. 

[3259]

Really interesting thread! Random thoughts from reading it...

 

SpaceX. Too much competition? Multiple billionaires involved, who may compete on ego rather than economics. You also have Northrop Grumman and United Launch Alliance.

 

Spotify. Why not just buy Universal Music Group?

 

Electric vehicles. outside dabbling in some cheap mining stocks, haven't figured out a good way to play it. With auto manufacturers, I'd be concerned about the intense competition. I imagine someone will make a ton of money on changes to utility infrastructure over the next 10 years.

 

ABNB. May have more competition than many realize, in many places folks hate the company, and it appears overpriced.

 

Metaverse. I think folks underestimate MSFT here. Stratechery / Ben Thompson recently had a good podcast on that.

 

Edited December 3, 2021 by 3259

[clutch]

13 hours ago, Spekulatius said:

I think it is likely that FB develops their own operating system for the Metaverse. It is unlikely that something geared towards gaming like Unity meets their requirements.

After all, they intend to put $10B a year into this effort and that should be some development. Unity looks totally overvalued to me and a lot of this seems based on the Metaverse narrative. I think if FB buys something, it is going to be a few private companies that nobody of us heard of yet.

 

I'm almost 100% sure that whatever FB builds will fail. It's not just FB, but tell me the last time a big tech company was able to successfully build a new platform/product that's outside of their core competencies. Maybe AWS was the only one, and that was eat their own dog food situation.

 

Unity will play a bigger role in the architecture and construction space. Designing living environments will become more and more like designing games and digital worlds. Many mundane things will be automated and a platform where people can quickly create realistic designs will win. 

Edited November 22, 2021 by clutch

[ERICOPOLY]

8 hours ago, clutch said:

but tell me the last time a big tech company was able to successfully build a new platform/product that's outside of their core competencies.

 

Search -> Android

 

or 

 

Search -> Chrome

Edited November 22, 2021 by ERICOPOLY

[Spekulatius]

On 11/19/2021 at 11:54 AM, fareastwarriors said:

If you believe in the future of the metaverse, Unity might be a major player. 

I don't think the Metaverse will be outside FB core competency. it's hard to tell because nobody really knows what it is going to be or look like. if I had to explain it to a 7 year old, I would say "metaverse= Internet in 3D", if I would explain it to some average guy it would be Metaverse = immersive Internet.

 

One thing is sure - it will have a very strong hardware component because you can't do any of this without creating some new hardware that creates the immersive environment. As someone working in optics, I am very exited about what people are going to come up with.

On another note, I think it is unlikely and basically unconveivable that any company controls the Metaverse, so I think FB idea is just that's it's the next frontier and they want to own prime real estate in it, as well as allows others (less tech savy) to partake there.

[clutch]

12 hours ago, ERICOPOLY said:

 

Search -> Android

 

or 

 

Search -> Chrome

 

Android was an acquisition.

 

Chrome was built using a bunch of existing components, and a super simple application relative to typical software.

[rkbabang]

On 11/19/2021 at 2:16 AM, clutch said:

 

To make you feel better, I had bought NVDA at around $20 5 years ago.

 

My work is related to high performance computing and deep learning so I knew GPU computing was ripe to proliferate at that time. Also, the moat of CUDA.

 

I sold all of them over a 2 year period as the shares quadrupled...

 

I got back in in March 2020, though. This time I haven't sold any.

 

 

 

I did something similar.  I bought it years ago and sold after a double.  I'm not even going to go back and look when that was and at what price, because I'm sure it would be painful.   I bought it back in May of this year and am up 115% or so and still holding.

 

[JAK]

Briefly lived in Korea circa 2017. Went hiking a lot when I was there. Hikes are usually followed by gallons of chicken and beer. During one of those post hike sessions, I got talking to a local stockbroker. The only stock tip he gave me was Nvidia, which he randomly spouted before passing out in the seat next to me. Although I vividly remembered the stock tip, due to the mental bias of associating it with drunken buffoonery, I subconsciously refused to even look into it. Expensive lesson ! 

[rkbabang]

47 minutes ago, JAK said:

Briefly lived in Korea circa 2017. Went hiking a lot when I was there. Hikes are usually followed by gallons of chicken and beer. During one of those post hike sessions, I got talking to a local stockbroker. The only stock tip he gave me was Nvidia, which he randomly spouted before passing out in the seat next to me. Although I vividly remembered the stock tip, due to the mental bias of associating it with drunken buffoonery, I subconsciously refused to even look into it. Expensive lesson ! 

 

 

Ha!  Drunken buffoons are not always wrong!

[elliott]

On 11/23/2021 at 3:37 AM, clutch said:

 

Android was an acquisition.

 

So what? That is precisely the point made here, that companies such as Meta just buy others to kickstart their incursions somewhere else.

 

Not to mention that Android, when it was acquired in 2005 for an estimated amount of $50 million, was nothing like what it is today.

[berkshiremystery]

On 11/22/2021 at 6:49 AM, ERICOPOLY said:

 

Search -> Android

 

or 

 

Search -> Chrome

 

On 11/22/2021 at 7:08 AM, Spekulatius said:

I don't think the Metaverse will be outside FB core competency. it's hard to tell because nobody really knows what it is going to be or look like. if I had to explain it to a 7 year old, I would say "metaverse= Internet in 3D", if I would explain it to some average guy it would be Metaverse = immersive Internet.

 

One thing is sure - it will have a very strong hardware component because you can't do any of this without creating some new hardware that creates the immersive environment. As someone working in optics, I am very exited about what people are going to come up with.

On another note, I think it is unlikely and basically unconveivable that any company controls the Metaverse, so I think FB idea is just that's it's the next frontier and they want to own prime real estate in it, as well as allows others (less tech savy) to partake there.

 

Hello ERICOPOLY and Spekulatius,...

 

I post here some reply to both of you, since I consider you 2 smarties . I specially appraise Erico, since his internal gut feeling as a former tech guy (MSFT), and his smart instinct to bet on FFH and ORH leaps in the old Fairfax days a decade ago. 

 

I personally sense that the next FAANG 2.0 would not be the one what you expect it to be. Remember Warren Buffett words on the evolution of the world's largest companies (1989 vs. 2021 [Japanese Banks, vs. Silicon Valley Tech {Facebook, Amazon, Apple, Netflix, Google}]).

 

 

 

 

The next FAANG 2.0 will probably be a black swan rising opportunistic company, that will monopolize some tiny fraction of the entire worlds economic activity, what we all do and need. Like charging a Google or Facebook-like fee on the worlds entire economic output, a tiny 1%, or maybe only 0.1% fee, with a huge net profit margin of 25% to 35%. It will probably be an artifical or virtual intrinsic company that creates a value chain, and that triggers ripple effects through the entire world economy, which is currently in chaos with covid, supply chain problems, inflation etc. A company that can harvest the DUNE like seeds of chaos, the kinetic chaos situation and extract a value chain, a company that builds a master piece in the making. Some slow Terminator-like rising out of the ashes of chaos, a master piece in the making, like Berkshire. After years of building, the single components, it will raise to the surface exponentially, in network-like grid effects. Over 10 years, the majority of AMZN or MSFT employees or shareholders, didn't knew what sprung out of the tiny cloud service departments at their companies, which are now hugely profitable, and what happened with Apple´s iOS eco-system. This will happen again with another company, that builds on top of everything, way-above !!! AMZN, MSFT, Apple, a first-order-logic system of another scale, with tsunami like effects. The first principles of Skynet are already DUNE-like build without the general public much conscious perception. 

 

This old and core message board group stalked over a decade ago, the Michael Burry bet against the housing bubble, and followed Fairfax bet with credit default swaps, Prem Watsa, Francis Chou, but the next bet will be asymmetric, kinetic chaos, and harvesting the seeds in the making of this moat. The biggest problems should be flipped-up-side down, like Alan Turing´s fight against the Enigma. The all-in approach, on a concentrated bet with the smartest people, that solve the worlds biggest problems, reversed engineered. IMHO the future FAANG´s in 10 or 20 years will be way,...way different.

 

I noticed myself, if a few people are cyber sleuths, ERICO was one of them  another one was this Emmet Pepper, His own expertise and gut feeling of following his instincts with TSLA leaps, his expertise working formerly with a leading derivative platform, having his instincts what works. Pepper rolled concentrated TSLA leaps in only one company for many years.                                                        

 

Charlie Munger´s simple bet (on margin) on BABA seems by some observers complicated, by others very simple, because of the inverted trajectory of the long term intrinsic fundamentals. It´s simple to understand moats of compounding machines, GEICO, Moodys, or FlightSafty, isn't it. Now what, or who builds the moat of the next giant-Skynet, the next giant-BABA is already in the making. Observe patterns, be risk adverse, but opportunistic, bet appropriate. Cheers!

Edited April 2, 2022 by berkshiremystery

[Dave86ch]

The next FAANG it will not be a company,

it will be a network of people.

Edited April 2, 2022 by Dave86ch

[Gregmal]

Sounds a bit like Ripple 

[scorpioncapital]

the next Faang is the government. You can invest in it by being a taxpayer and getting a check in the mail, forever )

[LC]

We’ve had a almost a half century of tech companies from the 80s thru today - companies which prioritized the virtual world. It’s been two, three generations of humans who saw technology as the next stage forward. 
 

maybe the next half century returns to the analog world? Companies like Airbnb, live nation, and such whose value prop is offering a polished human experience? 

[nsx5200]

On 4/3/2022 at 6:24 AM, scorpioncapital said:

the next Faang is the government. You can invest in it by being a taxpayer and getting a check in the mail, forever )

 

So many to choose from.  Any particular government do you recommend?

[rkbabang]

On 4/2/2022 at 12:57 PM, Gregmal said:

Sounds a bit like Ripple 

I doubt it will be Ripple, but the next FANGS will be crypto/blockchain related, either companies or crypto-assets.  And 10-15 years from now people will look back at the 20-teens through early 2020s and think that it was all so obvious in hindsight and ask themselves why didn't they see it?

 

[Spekulatius]

On 4/2/2022 at 12:54 PM, Dave86ch said:

The next FAANG it will not be a company,

it will be a network of people.

A company is a network of people essentially.

[randomep]

9 hours ago, rkbabang said:

I doubt it will be Ripple, but the next FANGS will be crypto/blockchain related, either companies or crypto-assets.  And 10-15 years from now people will look back at the 20-teens through early 2020s and think that it was all so obvious in hindsight and ask themselves why didn't they see it?

 

 

If Munger is alive 10-15 yrs from now what do you think he will say? Will he admit he was a moron?

[Spekulatius]

I think the new Fang is going to make hardware, or at least there is a huge hardware component to what they do. AI, driverless car or augmented reality would be my guesses. Perhaps it's all three in one application or framework.