3D/L's monthly market commentary is always full of charts and statistics, but this narrative section is the best encapsulation of the firm's differentiated point of view.
"Nobody's going to listen to Buffett. Buffett doesn't have the energy to say what he said 30 and 40 years ago in 2021. And that's OK, he's basically earned the right to chill out and be the GOAT, but there have to be some other folks that take that mantle, take the baton and do it as well to this younger generation in the language they understand." - Chamath Palihapitiya, founder Social Capital, Bloomberg 2/14/2021
Credit to former Facebook executive and now billionaire Chamath Palihapitiya for making such a bold statement on famed investor Warren Buffett, Chairperson of Berkshire Hathaway. Whether history proves him prescient or Irving Fisher-esque (“stocks have reached a permanently high plateau” right before the 1929 market crash), there is no mistaking that Mr. Palihapitiya has planted a marker that clearly distinguishes one style of investing (valuations based on fundamentals) versus another (narratives matter more than fundamentals: digital assets and technology are the future). Apparently, Warren Buffett is about as relevant to today’s investor as an 80s Walkman is relevant to today’s music listener.
Although somewhat hubristic on the surface, Mr. Palihapitiya’s comments concerning Mr. Buffett harbor some grains of truth (although we doubt the observations of Mr. Buffett’s energy are correct). Mr. Buffett may be the greatest of all time (“GOAT”), but at least so far, no one of major media significance has adopted the leadership mantle for fundamental, valuation-based investing. Nor has Mr. Buffett elevated a successor nor communicated a succession plan to serve as the leading voice for this style of investing, increasingly viewed as outmoded and outdated in the age of technology growth stocks and cryptocurrencies. Alas, such is the challenge of cult-of-personalities; rarely do they survive the passing of the personality.
So, should Mr. Palihapitiya and his legions of social media/retail trading followers prove to be right, then professional investing will be characterized more by textual algorithms following social media postings and less by traditional financial analysis and operational due diligence. Goodbye CFA, hello python programmer.
Coincidentally, it just so happened that Mr. Palihapitiya’s mid-month interview nearly marked the all time high reached in Bitcoin (USD), topping off near $58,000 before ‘correcting’ to its prior high of $46,000, although still well above where it started at the beginning of the month.
