We Study Billionaires - The Investor’s Podcast Network TIP686: Big Tech Stocks w/ Adam Seessel
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Dec 27, 2024 In a lively discussion, Adam Seessel, founder of Gravity Capital Management and author, shares insights from his extensive investment career. He delves into intrinsic value's role in evaluating Big Tech, providing updated perspectives on Alphabet and Amazon post his 2022 book. Adam also reveals how to navigate the AI wave while avoiding inflated valuations. He highlights Progressive Insurance's successful strategies in the auto market, emphasizing the importance of adapting traditional principles to current tech-driven dynamics.
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Tech's Growing Dominance
- Tech's dominance in value creation has grown significantly over the past 20 years.
- Seessel's analysis reveals tech created 55-60% of US market value growth, emphasizing its importance for investors.
Intrinsic Value vs. Reversion to the Mean
- Intrinsic value and reversion to the mean are mental models, not guaranteed realities.
- While reversion to the mean is unreliable in the digital age, intrinsic value remains a useful framework when combined with relative certainty and business analysis.
Berkshire's Tech Miss
- Buffett and Munger admitted missing Google and Amazon, acknowledging their oversight in the tech sector.
- Seessel questions Berkshire's large cash position and lack of significant tech investments despite acknowledging their past mistakes.
