00:00There's a lot of life in secondary markets, right?
00:04Shereen was running us through T. Rowe Price, participating in that round.
00:08I know that this might not be your domain, but what did you make of the OpenAI valuation?
00:13And if someone came to you and said, hey, Nancy, I'm putting together an SPV or something like that,
00:17would you try and get in on OpenAI at this private level?
00:21Yes, we would. Yes. And we're actually in the process of working with a firm to do just that.
00:27But we're also interested in, you know, SpaceX and XAI and many of the other names that are still private.
00:35And I think for retail investors, it's an opportunity.
00:39And then, of course, for the insiders, it provides liquidity, at least through the provider we're working with.
00:44Wait, Nancy, one sec, one sec. Marguerite, bring up the chart. There it is.
00:47OK, so OpenAI, a $500 billion valuation. SpaceX, number two, $400 billion.
00:53And then I don't see XAI on there, but I reported that XAI is raising money at a $200 billion valuation.
01:01Of those three, what's your top priority?
01:05SpaceX is my greatest interest. I think we know the AI game and there's a lot of ways to play it.
01:12It's not a game, but the opportunity. And I really want to get more exposure to space.
01:17So we just launched a fund, a strategy that is focused on all of the above, quantum space, nuclear robotics and spaces of particular interest to us.
01:28Fascinating that you're looking at basically these valuations in the private side, as well as, of course, all the exposure that you build in the public side.
01:36Nancy, what draws you? Is it just too hard to ignore when you're seeing companies staying private for so much longer?
01:42Yeah, well, right. I mean, Caroline, we used to have the Wilshire 5000 and now it's the Wilshire 3500.
01:50I think, you know, as an investor, my job is to look around and try to figure out ways to make money for my clients.
01:57When you're going through a transformative technological revolution like we are, you get these concentrations, you get higher than normal valuations.
02:06But that is not to say this cannot continue for some time. And as you know, I've drawn the analogy to the 1990s.
02:13I think the technologies we are seeing now are much more robust than just eyeballs on a screen, which was what we were measuring in the 90s.
02:21So I'm excited about all the opportunities and really working hard to try to figure out ways to gain exposure because the private markets are open to a very elite group of investors.
02:32Certainly we want to open it up to our clients as well.
02:35Nancy, talk about the fundamentals that you like within these companies, because, yes, you're saying valuations can continue up and to the right for a foreseeable future.
02:44You think it's underlying technology that gets us there rather than the market being irrational in some sort of hype cycle.
02:51Absolutely. So just just think back as far as Amazon.
02:53I mean, that was a valuable lesson for me as a as a value investor trained as a, you know, buy when things go down.
03:01Valuation matters. I could never figure out how the company couldn't report earnings.
03:05And and continue to drive forward. I think that and so ultimately we became we participated in the name and learned a lesson that during certain periods of time,
03:15that's what you're going to see. And you have to depend on management.
03:19You have to be focused on the underlying fundamentals. And that's that's our job.
03:23And that's why we have a team of analysts that support me and the other portfolio managers at the firm.
03:28So we're primarily focused on catalysts for outperformance in the soft side.
03:34We look at all the numbers that everybody else looks at on the quantitative side.
03:37But qualitatively, we're looking for catalysts for outperformance and strong management teams.
03:43And you can measure those over time. It's obviously a subjective decision, but we spend a lot of time on it.
03:49Nancy, we're going to go very, very deep on Tesla in the next segment.
03:52But actually, as a team, when we were talking about today's show yesterday, your name came up, right?
03:57You join us all the time. Four hundred ninety seven thousand and ninety nine vehicles delivered in the third quarter.
04:02A record. The stock rose and now it's down almost two percent.
04:07Just your reaction and to what extent you see the expiry of the federal tax credit being the principal factor.
04:13Well, I do think it's a principal factor, Ed.
04:17I mean, I think there was some strength seen in China, which was good or at least less deterioration.
04:23So I think that that is a rebound that we're going to be watching, continuing to watch closely.
04:29But for us, and I've said this to you historically, we're interested in the name because of the energy business, which we've been talking about for two years.
04:37And I think now people are sort of, you know, excited about that business.
04:42We're interested, obviously, as everyone else is in FSD.
04:45They seem to be seeing really robust improvements.
04:49It may not be a linear acceleration.
04:51It may just be at one point we see that FSD is is at the levels we need.
04:58And then they've got seven billion miles traveled.
05:00And that that dwarfs Waymo.
05:02I live in Waymo land.
05:03You know, you can't stop at a stoplight in Arizona without seeing four or five of them.
05:08And Tesla's way ahead on that.
05:10So they just need to catch up on the technology.
05:12And they will because they have the data.
05:14So we're very excited about the new model, RoboTaxi, all of the others.
05:19And then, of course, Optimus, which I'm counting on as my home health care solution.
05:25My kids asking me yesterday when we're going to be getting a robot in the home, Nancy.
05:29And I can see that we're all waiting on tenterhooks.
05:32But so, too, is the comp package for Elon Musk.
05:35It's tied to real deliveries of Optimus, of RoboTaxi.
05:3820 million EVs on the roads.
05:41Are you going to be voting in favor of that?
05:43Oh, yes, absolutely.
05:45And the AI, you know, the XAI fundraise.
05:49We would love to see the companies meld together and get access to SpaceX and XAI.
05:55We'll see.
05:56I mean, that's me talking, not Elon, but we'll definitely be voting in favor.
06:00I love when incentives for the management team or the visionary CEO are lined up with me and my shareholders.
06:08So we're very excited about the future of Tesla.
06:10And remember, it doesn't go straight up.
06:12It's a volatile name.
06:13We were buying at 240 in the spring during the tariff tantrum.
06:18We will buy again when the stock dips down.
06:21But it's a 6% holding in our new strategy, which is the macro cycle opportunities.
06:27And then in our growth strategy, it's a 4.5% holding.
Be the first to comment