00:00What happened in July? AI and chip stocks sold off pretty heavily. Is that the story here?
00:05Yes, exactly. It's a concentrated AI bet. KOTU has long been bullish on the sector and four of
00:13its biggest holdings in the trade have worked against it. You're seeing huge declines on
00:20Taiwan Semiconductor, GE Vinova, Lam Research and Applied Materials, some of them sinking
00:26as much as 29 percent. So this is part of what pulled down the fund's performance
00:33to the worst performance in over a year for the month. But yes, as you mentioned earlier,
00:39the fund is still up 14 percent on the year. The Philippe Lafont thesis is that there is a
00:48super cycle in AI coming. Any deviation from that after July?
00:53I can't imagine that he would have changed his perspective, which he's held on to for
00:57quite some time. He has experienced volatility earlier this year. They were down 5 percent in
01:04March, given the tumult in the Middle East. They also posted a return in May, its best return in
01:12like 25 years when they gained 14 percent in that month alone. So look, it's been a roller coaster
01:19for investors in this fund. But you do know what you're getting when you invest in KOTU.
01:23And it is this sort of long held vision that the future will be AI driven, that there is this
01:28super
01:29cycle to come. And I can't imagine that this one month would have changed his perspective.
01:34Who knows? He may have bought the dip as well.
01:36Right. Let's go back to the year to date game, 14.3 percent. Like where does KOTU sit in this
01:41sort of
01:41group of other hedge funds that you've been able to track?
01:44Yeah, good question. So when we look at the spread of the sector, we have Tiger Global,
01:50KOTU, Viking, Lone Pine. We call these firms the Tiger Cubs because they came from Julian
01:56Robinson's Tiger management and have spawned their own firms. And so when we look at, say,
02:02there is some divergence, right? Viking Global, for example, a lot more cautious on the AI sector,
02:08really pulling back those shares, not as exposed. That would have helped them in a month
02:13like last month. But they've also said that that's meant some missing out on some gains that other
02:19firms have really taken advantage of, like KOTU, like Tiger Global, and to some extent like Lone Pine.
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