1/If you owned growth stocks this year - like we did at Altimeter - you got your face ripped off. As a hedge fund we expect to lose less than the indexes on the way down - this year we have lost more. Our Big 4 - Snow, Meta, MSFT, and Uber are all down big. #keepingitreal
2/ Despite concerns about valuations - we didn’t hedge enough. We expected a gradual reversion to avg multiple as rates normalized, but we didn’t forsee a war in Ukraine or fears about hyperinflation /runaway rates. Markets moved fast- we moved too slow. cnbc.com/video/2021/10/…
3/ Stocks are now cascading lower. Growth multiples are near 10 year lows. And all the talk is of war, inflation, rates, and recession. We are likely already in a recession, demand is slowing, and inflation peaked in March. So what next? Key to have an operating framework.
4) Snow, Meta, MSFT and Uber will all grow FCF over the next 3 years. They don't need $$ and FCF will drive share price irrespective of the near term path of inflation / rates. Tune out the noise. And build even more edge / conviction in your key investments. #essentialism
5/ I take no relative comfort or pleasure in the pain being experienced by other firms. This is a hard business. But if we get the benefit of the ups, then we have to own the downs - important to lead from the front when the sh*t hits the fan.
6/ Our team is fired up to help our CEOs and investment partners navigate this moment. We have great long term partners who realize - despite present pain - the world continues to arc toward technology and these moments will lead to outsized future returns. But it will take time.
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