Så investerar du smartast i teknologiaktier – GARP och hans värld

This post is in Swedish.

The message is that a technology company isn’t always what you’d like it to be (specifically in terms of growth, economies of scale, profitability and competitive advantage). Don’t accept the “tech” designation at face value.

Den här krönikan innehåller små klipp från originalet som finns publicerat i sin helhet här på Vontobels sajt.


Du är en GARP-person

Även om du inte tänkt på det själv så är du antagligen en GARP-person. De flesta är det, kanske alla egentligen. GARP står för Growth at A Reasonable Price. Tillväxtkomponenten i GARP gör att du får tiden på din sida i en investering, vilket utvidgar intervallet för vad som uppfattas som ett rimligt pris. Som kontrast är Deep Value-strategier i krympande eller rakt av döende företag beroende av en relativt snar likvidation för att ge positiv avkastning. Där är dessutom rimligt pris begränsat till en bra bit under de konkreta tillgångarna. Om du inte fyllt 40 än har du kanske inte ens kommit i kontakt med äkta Deep Value-strategier.

Investeringsstrategier som riktar in sig på Dividends, Value, Growth eller Tech kan faktiskt alla kategoriseras som GARP: tillväxt till rimligt pris. Om priset vore orimligt sk… (fortsättning)

En GARP-investerares ultimata investeringsobjekt växer nämligen ovanligt snabbt, uppvisar skalfördelar inom tillverkning, distribution, varumärke, teknikhöjd och investeringskapacitet samt helst utvidgar sitt försprång mot konkurrenterna och ytterligare stärker sin position i takt med tillväxten. Dessutom ska företaget vara… (fortsättning)

…I slutet av cykeln blir en allt mindre grupp snabbväxande teknikföretag successivt det självklara sättet att få maximal avkastning på sitt kapital. Idag är det FANG-aktierna, men inget säger att det är just informationsteknik som drar till sig intresset. Det kan lika gärna vara bioteknik eller läkemedel…  (fortsättning)

Den mest praktiska definitionen på ”teknikbolag” är att den handfull bolag som tar täten i marknadsvärdestillväxt på börsen är teknikföretag, oavsett deras faktiska verksamhet eller metoder och verktyg för att driva affären.

Japp, det är precis så dumt som det låter…  (fortsättning)

En strategi som kan fungera för mindre investerare är att bara följa eller t.o.m. försöka förekomma flocken i den här självförstärkande processen, där vinnaren definieras som teknikföretag och därmed drar åt sig ännu mer kapital och således blir ännu mer av en vinnare… (fortsättning)

Ett varnande exempel är bilföretaget Tesla som i dagsläget består av en rudim… (fortsättning)

…har erhållit mycket hög avkastning.


Hela artikeln finns som sagt på Vontobels sajt här. Det här är alltså ett samarbete där jag får betalt av Vontobel för att skriva en krönika med finansinnehåll åt företaget.

The first quadrillion dollar company won’t be Amazon, Apple or Alphabet

It’s not hip to be square

-popular commercial ca. 5000 BC


Do you remember when that round, friction-minimizing thingamajig was all the rage in the tech space? That was fun, albeit a bit slow moving in the beginning.

Of course, many were skeptical at first as always. But once Salpeter Steel invested in Squares With Supermany Corners, more and more Stoneage VCs showed interest. However, it wasn’t until the name change to We Have Efficient Enormous Load Relievers the business really took off.

After Peter Steel’s success in the WHEELR industry he turned his focus to the struggling start-up Hot As Hell But Still Good For Cooking And Scaring Wolves Away Inc.

“It doesn’t quite roll off the tongue all that easily”, he thought… not to mention the hassle carving it in stone entailed. He let his mind wander: “Four letter words are always popular. Maybe you should try something on F?”, he suggested to the founders Fred, Isla, Rose and Ember.

And on and on it went, until the famous: “Plastics” comment in the 1967 movie “The Graduate”. Little did they know plastics would soon be demonized by hippies and greens, while the real action would turn to semiconductors, computers, software, mobile phones and other information technology companies.


Topic: Hot technologies in the past, present and future; companies with names beginning on “A”

Discussion: The Singularity Is Near, but how should you invest on the way there?

Conclusion: One word: “Agents”. We could move away from P&P companies that own our data, our portals and more or less force products down our throats; to owning digital autonomous copies of ourselves (the company making those could become the largest in the history of corporations by several orders of magnitude) that finally relieve us of the paradox of choice without relinquishing control to Big Data corporations.


Railways and radios

There was a time when steam engine powered water pumps for coal mining were the only game in tech town. Railways and cars then stole the limelight, not to mention radios (now, that was crazy at a whole new level) and airplanes.

That was, however, just “technology”, not information technology. Once Turing set things in motion after deciphering nazi codes with his version of computers, and possibly indirectly contributed to solving equations underlying the first atom bomb, a whole new industry was born with IBM in pole position.

IBM’s president Thomas Watson had a vision of the future:


“I think there is a world market for maybe five computers.”

Thomas Watson, president of IBM, 1943


A companies

The IT industry has progressed through mainframes and minis to Personal Computers, separating and celebrating hardware vs. software, and a whole stack of layers of operating systems, databases, applications etc. The workload has shifted from central (mainframe) to local (PC) to central (minis) to local (PC, laptops) and central (mobiles vs. cloud) again. The stock market has shifted its focus (a.k.a. ‘hype’) from semiconductors to computers to operating systems to applications to databases to business intelligence to browsers to search engines to network equipment (from data to voice and back to data again), to phones and minimalistic small applications known as applets or apps, not least social media apps.

Where is it all headed? Let’s just take a look at a few randomly selected companies in alphabetical order: Alibaba, Alphabet, Amazon and Apple. The first and most obvious conclusion is that names on ‘A’ are more successful than other companies. But we’ve known about that since Salpeter Steel’s first service business back in 5000 B.C.: AAA Wheeler Tow and Sons.

Jokes aside, the secret sauce is knowing your customer and having access to his attention and wallet, as well as products to sell. The best companies have tons of intelligence on its customers for crafting the perfect pitch, and an addictive portal to control the flow of products and services:


It’s all about the platform and the pitch

During the Mad Men era in the 1960s, a pitch consisted of convincing customers your bland and commoditized product was better than the competition’s. Today deep learning algos instead tease your core preferences from your largely unintended data radiation and satisfy your every want and need perfectly.

Alphabet’s search engine Google controls your attention and sells it to the highest bidder. Amazon knows about everything you buy, when and in what combinations — it controls both the platform and the pitch. Apple does the same, albeit in the form of a handy little gadget that enables recording and sharing as well, and that is placed one step before Amazon and Google. In China, WeChat is even more dominant with a billion Chinese users spending 5 hours a day on the platform.


What’s next? AR contacts, 3D printers, robotic companions?

The highest valued businesses harvest your data, sell it or reverse engineer your utility function to pitch increasingly addictive products. The actual manufacturers of most products and services have taken a back seat to the “portal” companies.

At the risk of predicting the equivalent of the Internet collapsing under its own weight within a year, or nuclear powered vacuum cleaners, here goes some of my thoughts about the remainder of the 21st century in tech.

Contact lenses and bionic limbs

Analyzing and hooking clients will only grow in importance, but the portals will morph into something quite different. Mobile phones will become increasingly mobile/wearable and gradually fuse with the body, perhaps in the form of contact lenses enabling seamless Augmented Reality and Virtual Reality experiences; perhaps through neuronal interfaces pioneered by the prosthetics industry. Nota Bene that there’s already touch feedback bionic limbs available, not to mention rudimentary AR contacts. There are even eye implants that restore some sight to the blind.

Will Apple be able to hold its own when the “phone” hardware becomes so different from today’s fragile glass bars? A robotics or biotech company could very well be better equipped to take the lead in that scenario — or Apple could try to take them over.

The HMI era, the portal of the future

In any case, Human Machine Interface technology will be crucial whatever form it takes. Today’s crude Finger And Voice input methods won’t last long, except for particular situations that don’t require precision.

Intention Readers, Emotion Detection Systems, Autocorrect Deduction Devices (that combine gestures, voice (words + tone), facial expressions, blood flow, heart beat, breathing etc. to guess and anticipate your desires) and so on will replace keyboards and touch screens. All these technologies already exist by the way.

What about existing search and retail platforms? Hard to say, it depends on what the H-M Interface companies decide. They could choose to connect directly to the end products, or they could uphold the status quo and go through Google and Amazon.

There is a whole different set of solutions to the HMI problem: digital and real world agents, wholly owned by you, that gradually mimic your every trait (don’t worry, you’ll be able to edit out unwanted evolutionary mismatched psychological biases). Rather than letting Facebook, Cambridge Analytica, Alphabet, Netflix, Amazon, WeChat, Alibaba and others know everything about you and abuse that information, you can elect complete anonymity but let your own proprietary agent know exactly everything and in effect turn into an exact copy of you. Your agent could over time assume more and more responsibility, from booking tables at restaurants to shopping for groceries and clothes.

In the beginning your agent might merely suggest a few alternatives, and as its precision improves you allow it to only show the single best one, then make preliminary bookings and finally just hand you the goods, reservations and tickets: “Your Uber will arrive at 7:48 tomorrow morning. The alarm is set for 7:19. Your face and iris scan are valid as your flight ticket. You’ll be staying at your usual hotel”

William Gibson wrote about such agents (eventually becoming self aware) in his epic book Neuromancer from 1984. I see the development of such artificial “helpers” as all but inevitable, leaving us ample time to explore both our inner and outer worlds and experience the human condition to its fullest.

Purely digital agents might be the end station. They would receive input from our every move and interaction with the world. The internet of things guarantee we are always recognized, our activities gauged, categorized and the corresponding data securely transmitted to our digital copies roaming the net hunting down optimally tailored experiences for us. A simple RFID implant could do some of the tracking, but otherwise every single item we face would be the eyes, ears, LIDAR, X-ray vision, Ultrasound etc. of your agent’s.


Quadrillion dollar co.

What happens if you own your own data yourself, and your agent doesn’t need the “help (prying eyes)” of search engines and entertainment suggestion algos to sift through billions of choices? Amazon gone? Apple gone? Alphabet gone? Would end product companies stage a comeback, based on highest quality and best price/performance rather than highest portal visibility and most nefarious data scraping abuse?

And, will the Agent company become the first quadrillion dollar company?


Runway to sublimation (a popular post Singularity state)

In David Simpson’s most recent book, The Dawn Of the Singularity, Simpson envisions more or less every household buying or leasing humanoid robots; androids that are quite similar in function to Gibson’s digital agents, albeit in physical form.

Four billion robots at a clip of 1000 USD/month for the basic version and upgrade subscription can turn into serious money over time, in particular valued at 5 times sales. Higher priced versions, upgrades, and using the robots themselves as portals for other goods and services easily increase the numbers by a factor four, and voilà!

I can definitely imagine such robots as both part of the input function for reverse-engineering their owners, and as platforms for showing off your wealth (complementing your car and boat). Once household androids become useful enough, just picture the “Joneses” pitching their robots against each other in terms of best finish, speed, balance, range of functions, intelligence, model and not least price.

Mom, why is our android so slow and old?

I just got back from the Joneses, and they’ve just bought the HuBot2028 LAL. Maybe it’s about time we upgraded ours too


Summary – what to do?

Biotechnology, artificial biology, active nanotechnology (molecular replicators and molecular-sized computers and robots) in contrast to today’s inert nano materials; strong general artificial intelligence (and its current predecessor, deep learning), robotics, quantum computing, bionic limbs, AR/VR and various forms of entertainment etc. are all promising tech areas today.

Add in the potential of immersive computer games, sex robots, designer drugs — or a combination of all three and it’s easy to imagine an interesting near future. The question still remains, however, which companies will emerge as winners in this race. On the one hand, IBM, Alphabet, Amazon, TenCent, Alibaba, Apple and Netflix all have interesting AI software and quantum computing embryos, but on the other, all that research money doesn’t stop history from repeating with altogether new start-ups making the crucial inventions.

I would bet some money on each and every one of all the mentioned companies, but I would be even more ready to invest in new, truly innovative robot and AI companies, if I get a chance before they sell out to the FANGs.

Fortunately, you don’t have to get rich betting on the right digital agent company. The future will be bright enough just having access to them as a consumer; just as standard shipping containers have made us all rich without any of us ever having owned the company that invented them.

Talking about investments, wouldn’t it be cool if our agents could perform financial analysis? They could find out everything, and, if allowed, talk to other agents in as large groups as we grant authority. Thus we would actually know the sales and likely profits, thus enabling optimal investments. Brokers, gone! Portfolio managers, gone!


Interesting you say, but: bah, no robots, no agents, I just want to see what next year’s iPhone looks like.

Regretting decisions and frettings over losses and past events at best doubles the pain

“I’ve never experienced adversity”

That’s what I spontaneously say when asked

How about you, has your life experience been a total joy ride?


Topic: personal growth

Conclusion: counting your blessings and learning from your lossses

Teaser: My failures

Length: 5 minutes


Sure, I was bullied in school on account of my accent, of my poor family, small house, garden and single car garage (!), the wrong clothes, Asperger’s (before it was a thing) and so on. Oh, yeah, right, I’ve had 8 concussions, two torn ACLs, a few broken bones, heartbreaking break-ups etc., but I’ve never considered any of it facing adversity. Those are just facts and stories of the past. Experiences. They hurt in the moment of course, but real adversity should entail substantial and permanent loss, without compensation, shouldn’t it?

I can continue: my big brother drowned before my eyes when I was 8, which triggered my parents’ pretty ugly divorce shortly after; but how is that my problem? Hasn’t everybody divorced or dead family members? Don’t they, if you just extend your search a little? to be clear, right there and then, seeing my parents’ reaction to their first born son taken away so unexpectedly, shook me to my core.

Living my pre-teen, formative years in the tragic vacuum he left behind, and the tension between my parents, may ex plain my reluctance to commit to meaningful relations and awkward social competence. Maybe it has some bearing on my flat interactions with my father and somewhat sporadic and disengaged socializing with my siblings. I can definitely be perceived as cold and distant, so maybe I am “damaged”. The thing is I don’t feel damaged. On the contrary, Ola’s death probably contributed to my obsession with coding, which in turn gave me intense training in logic, English, perseverence, patience, responsibility (for bugs and finding them) and grit.

Most of all grit.

– – – – – – – trigger warning, sentimental stuff

When you’re 10, 11, 12, 13 years old, frequently physically bullied in school, your parents are arguing and involved in jealous and toxic scheming and monitoring new acquaintances, you’re the smallest and youngest kid in class, the new kid on the block, with Asperger’s on top and the only one in your neighborhood coding; imagine the required grit to code, debug, test and come up with solutions all alone. Need I remind you this was in 1982-1985; there was no internet, no one to ask. Was it difficult? Yes. Was it frustrating? Definitely. Did I want to smash my 22″ cathod ray tube TV set? Oh, yes! Was I devastated when the computer crashed mid-debugging? No, I just wanted to kill myself and burn everything around me down to the ground. I don’t know what drove me; perhaps I fled from facing my brothers demise or dealing with my and my family’s loss. In any case, my new core programming, manifested as indestructible neuron highways in my brain, regarding grit, will power, logic, algebra and optimization have proven invaluable.

I used to be a troubled child, but after my brother’s passing, and the second coming (the computer), I turned into an effective, and eventually immensely appreciative, serene and happy, pattern recognizer. I can’t see how I could ever have become a better person than I am — well, according to my preferences. Consequently, none of this can be considered a bad thing.

– – – – – – – – end of croc tear rant

Professionally, I’ve had to live with a few disastrous recommendations to clients (e.g., Prosolvia went bankrupt, the stock to zero, when I had a Buy recommendation on it), not to mention loss-making investments when I was a portfolio manager (shorting bank stocks en masse in the second half of 2013 was not my smartest move; actually it was my worst ever, I think). I’ve lent out money that I never got back. I’ve invested in several start-ups that all went belly-up.

To summarize: yes, I’ve lost friends, family members, girlfriends, limbs, money and honor. I just never think of that as adversity. It just is. Later in life I’ve learned that some people keep thinking about past events and past decisions, just as some people believe all their thoughts and cede control to them. Meditation seems to help center people in the present, but for me accepting my thoughts or stilling my mind or controlling my emotions have never posed a challenge.


I’ve heard somewhere that you don’t know how strong you are until it’s your only choice. A bit dark, don’t you think? Or, is it? It’s pretty hopeful to know there probably are hidden resources that appear right when you need them, should you ever.

You only get challenges you can (barely) handle“, goes another saying. I can’t say I agree with that one. Neither do, I imagine, many victims of violence, war and worse (murder). There’s still, however, some truth to the cliché. For moderately unwanted experiences you can choose how you frame them (it could have been worse) and how you choose to remember and deal with them and not least what you learn from them.


Today I’m exactly who I want to be.

Consequently, I wouldn’t change a single thing of my past if I could. I actually can’t see I’ve ever truly suffered, taken a real hit (street fights don’t count), or lost anything I didn’t learn more from than I paid.

What’s the worst thing I can remember that even in retrospect seems unnecessary? Maybe when my girlfriend’s old dog died. That was excruciating. No matter, it emphasized the importance of appreciating every day you get to experience with your loved ones, rather than telling me life hurts.


Why do we fall Bruce?

Once, I crashed my motorcycle in the woods and hurt my knee badly. I could say that I tore some ligaments, my right knee ACL and ruptured my meniscus and still had to walk the bike back to base, but my physician told me all that damage was already done some 8 years earlier. Actually his exact words were “13 years”, since I waited another 5 years before checking up on my increasingly unreliable knee. Anyway, lying there around April or May 2000, alone in the woods, screaming my lungs out, not even daring to look at or touch my leg, I thought “The good news is, whatever the damage, nanomedicine will sooner or later make my knee even better than the original”. Sunny disposition much?


Takeaway: love your losses — and yourself

Have you really had a tough life? Have you really experienced adversity, or are you just dwelling on the past, regretting decisions and events you had no control over?

Aren’t you a better person for all your experiences?

If not, perhaps now is the time to think about how you handle life’s little misfortunes. Why don’t you choose to learn, rather than just complain?

No investor on the stock market would blame bad luck or fret over losses in the past. They would just update their best practices list and strategy and make sure they do better next time. Life is no different, it’s an eternal cycle of trials, investing, losses, analysis, learning and improvement. Losses and “adverse” experiences are a natural and important part of the process — and the sooner the better. Logically you should love losses, since they are much more effective teachers than wins, in particular lucky windfall gains.


Man in the mirror

Aren’t you who and where you want to be?

WHY NOT? And…,

…who’s responsible for that? Either you change, or you change your mind (alternatively stay unhappy and hope for your miserable life to end as soon as possible)


CTA: By the way, how long has it been since you wrote an entry in your appreciation diary? What do you love? Who do you love? What are you doing to love life and yourself even more?

P.S. Actually, that hangover when I woke up, covered in blood, in a 3x3x3 ft (1 cubic meter) box at a gas station 15 miles from home might have been my low point.

P.P.S. No, come to think of it, when the Spanish police chased me with dogs and threatened to rip my “passaporte” to shreds unless I left the country might top the gas station incident

P.P.P.S. I almost forgot, the sleepover when I was 17, in a “house” in Amsterdam’s outskirts, built from driftwood, populated by drug addicts, that turned into a slow motion knife kerfuffle, could have ended in tears. No matter, that wasn’t even close to adversity, just an exciting experience.

Tell me again, how did I ever become a hedge fund manager? Oh, that’s right, I almost got fired even before I started on account of an interview I made between jobs back in April 2000.