Pratik Gandhi

Ex-banker/ Co-founder of a unicorn fintech. Investor. Advisor

[Pratik Gandhi @Patson2531]

The Buffett era assumed moats were durable by default. We're entering an era where every moat has a political off-switch, a technological bypass, or a cultural expiry date.
SaaS once had a moat. Don't need to explain anything here.
Cola/ FMCG: Ozempic is doing what Pepsi never could — killing the category itself. Same for alcohol companies.
Pharma: This is a patent clock ticking - with Governments questioning the pricing. And AI democratizing drug discovery to a large extent.
Visa/ Mastercard: UPI/RuPay is the clearest proof-of-concept that a government-backed rail can displace them entirely in a large market. Brazil's PIX did the same. The EU has been pushing its own payment initiative. The pattern is clear: every large economy with sufficient political will can build around them.
Airplane engines (Chris Hohn invested in GE aerospace)/ plane manufacturing: wars are now fought with cheap drones more effectively than ever.
Traditional media: never mind :)
Rating companies: their core business is solid. But some other report generation businesses are highly questionable with AI.

Which actually sharpens the real moats list down to two that are genuinely hard to dislodge:
Physical geography lock-in — no government builds a competing port at the mouth of Singapore Harbour
Cultural identity/ luxury — no government mandates an alternative to Hermès
Got to be on our toes out there while investing. Buy-it-forget-it kind of investments are getting super rare.

[Pratik Gandhi @Patson2531]

@DrewCohenMoney For more reasons than one. Imagine if Google joins the price war. They have minuscule earnings from AI unlike Anthropic/ Open AI. And a huge war chest. What happens to the revenues of the challengers. And their valuations.

[Pratik Gandhi @Patson2531]

The way the markets are right now, its like they are saying "if you want me to get restarted, pl. try turning AI off and back on again" 🤣
If you are on the wrong side of the trade for now, the best way is; don't look at it, don't blink and definitely don't make sudden movements.

https://t.co/Q4LvlhPo8V

[Pratik Gandhi @Patson2531]

Google's 2004 IPO is estimated to have created ~900 millionaires.
Facebook's 2012 IPO created ~1,000 millionaires.

If SpaceX (~$1.75T), OpenAI (~$1T) and Anthropic (~$1T) IPOs take place at these valuations, it is estimated that they could collectively create: 10,000–15,000 millionaires. And anything from 35–100 billionaires.

Let that sink in. Companies with $1 billion valuation were called unicorns because they were thought to be rare. Here 3 companies may collectively create 35-100 individual 'unicorns'. Wow.. thats generational wealth and I am so happy for all of them.

The internet had created wealth at scale. The AI era may create it through extraordinarily small teams with extraordinary leverage.

And the story won't end there because at least some (I am assuming reasonably large) part of this wealth will be reharvested back in the investment pool to create more in the AI system.

[Pratik Gandhi @Patson2531]

Last week would have scared a whole bunch. And with the SpaceX IPO this week, followed by the other 2 Trillion dollar ones to follow soon, there is likely trepidation amongst many.
And surely, we have never seen anything to this degree of magnitude, so it is difficult to know what will happen in the immediate future.
The other thing is that winners and losers change over time. But for the right stocks, history suggests that the liquidity-suck effect may be temporary.
Goldman looked at mega-IPOs such as Visa, GM, Alibaba and Meta:
S&P 500: ~(1%) in the month before IPO but ~+5% in the month after the IPOs.
The pattern is often: Cash raising → IPO volatility → capital redeployment.
There will also be pockets of huge wealth creation, that will generate its own trickle effects. Including into investments.
Remember, stock performance eventually mirrors performance of the company behind the stock. Stick to the right ones and don't try to guess how the broader markets will perform. My 2 cents.

[Pratik Gandhi @Patson2531]

So good..

[Bill Maher @billmaher]

A.I. has made college one big robot circle-jerk where students use A.I. to write papers and professors use A.I. to grade them.

[Pratik Gandhi @Patson2531]

@KrisPatel99 This argument may imply that on the flip side, Berkshire willingly bought a large chunk of GOOG equity at inflated prices. Who would we rather trust on valuing a stock? A company that does this for a living or the company that excels in all things non-investing?

[Pratik Gandhi @Patson2531]

A decade ago, detecting early-stage cancer biomarkers required refrigerator-sized lab equipment.
Today, researchers at Westlake University in China claim they've shrunk the technology into a handheld device that can detect lung cancer biomarkers from a single drop of blood with up to 94.9% accuracy. And it will cost $5!
The most important breakthroughs aren't always bigger AI models. I'm far more excited about what AI could enable in #Longevity: wearables that continuously monitor biomarkers and detect disease risk before symptoms appear.
The biggest opportunity may not be treating disease better. It may be preventing it altogether!
That's also why Biotech and Pharma investing feels particularly challenging right now. We're potentially entering a world where AI-driven diagnostics and prevention become just as important as the drugs themselves.
Trust me, there will be huge winners and huge losers. The hard part is that we probably won't know which is which until the future arrives.
https://t.co/ahy7RCFMKm via @scmpnews

[Pratik Gandhi @Patson2531]

The reports that Microsoft and Uber have pulled back on Claude Code spending may be more significant than they appear.
Firstly in terms of the so-called concept of token-maxxing, which is probably as important a metric as miles flown for a sales performance or in the older days of the Dot-com bubble: page views.
Secondly, to all those who are implying that Anthropic's revenue may touch USD 1T (trillion with a T) by the next year: keep the champagne on ice for now.
If large customers are already scrutinizing usage and costs, token growth may eventually look less like AWS in the 2010s and more like telecom bandwidth: explosive at first, then increasingly optimized.
What's also interesting is that even at enormous revenue run rates, frontier model companies are not yet demonstrating the kind of operating leverage many investors assume. Read this as saying that they are still not making money at these gargantuan revenues.
So, page views weren't profits and token consumption isn't earnings. For either the makers nor the users.
Not sure yet, but the winners may not be the companies generating the most tokens, but the ones generating the most profit per token. Jury still out there on that.

[Pratik Gandhi @Patson2531]

Investors sitting on the sidelines because they think AI is a bubble, or because IPOs from SpaceX, Anthropic, and OpenAI will cause a liquidity-driven selloff, should remember that market timing is a game very few win.
As the saying goes, there are many who have predicted the last 20 of the past 4 recessions. Ray Dalio/ Michael Burry to name a couple. In fact the so called Doctor Doom (Nouriel Roubini) has strongly rejected the idea of an AI bubble.
Having said that, this does NOT mean buying every AI stock. Plenty are priced for perfection.
But there are a few obvious AI beneficiaries that may not be hugely sexy but are still trading at reasonable valuations. I'd rather own those than wait for a correction that may never arrive.
#MSFT/ #AMZN/ #GOOG/ #NVDA

[Pratik Gandhi @Patson2531]

Ice Age reprised. Diego alias #MSFT limping back, saying "9 lives baby!"

[Pratik Gandhi @Patson2531]

Subaru (7270.T), a relatively small Japanese car manufacturer (most famous car is Forester) has some amazing financials:

- Revenue of USD 30b
- Operating profit of ~USD 1b
- Cars sold ~900k
- Has a developing defense/ aircraft business
- Dividend yield of 4.7%
- Actively buys back shares
- Cash/ equivalents of USD 6.5b
- Investments of USD 5.7b

It's gone thru a slightly rough 1 year due to the tariffs/ some production issues etc. But solid company.

Now guess what the market in its wisdom values the company: Enterprise Value of just ~USD 1-2b. Thats 1x of its Free Cash Flow (FCF).

And if one employs Buffet's strategy, one could just take a JPY loan at 1% to fund the purchase to negate any FX exposure.

I could buy such companies ALL day.

[Pratik Gandhi @Patson2531]

Brilliant interview. Jeff Bezos is so articulate and non defensive on every question thrown at him. Would love for him to be Presidential candidate at some stage.

Note: Interview with Jeff starts around the 20th minute.

[Bill Ackman @BillAckman]

A really important and interesting interview with @JeffBezos and @andrewrsorkin about tax policy, AI, the economy, and space. Unfortunately it is only in audio form.

Bezos argues for eliminating tax on the bottom 50%, making the case that the 3% of tax revenue from this cohort should be made up for by eliminating government waste and fraud. I agree.

He says that instead of vilifying the top 1% who pay 40% of Federal taxes, we should have a real debate about tax policy.

Is making the tax system even more progressive the right answer? Will it generate more revenues or less?

Or should we endeavor to eliminate waste and shrink the size of government in order to eliminate tax on an even greater percentage of Americans?

On AI, he makes a powerful case for more jobs, in fact a labor shortage, due to growth driven by increases in AI-driven productivity.

A must listen.

The interview begins at 18:33.

https://t.co/GcIrtQrVx5

[Pratik Gandhi @Patson2531]

A few points on why despite some of my role models in the investment world having bought Meta, I don’t think I will invest in this:
1) Across platforms they have some 3.5b users. From the total population of 8b something (minus China where all their products are banned), how much more can they grow?
2) I see a lot of youngsters now going off FB/ Insta. Some are reducing social media platforms altogether
3) I may be wrong to think this way but what real value is Meta creating in society? Compare to GOOG/ MSFT/ AMZN etc.
4) Lastly and very importantly - I like to invest in firms whose CEOs/ founders I can trust. And I just don’t trust Mark. For reasons like the way he told Trump that he will invest 600b just to impress him.

[Pratik Gandhi @Patson2531]

Li Lu (who was the only outside fund manager to have handled Charlie Munger's wealth), thru his fund just invested in #TME. Small, 2% position. But super interesting.
Increasing margins/ no debt; high cash on hand/ increasing paid subscribers (~24% vs. ~40% for Spotify, so plenty of room to grow)/ strong China brand on music/ high free cash flow and buys back a ton of own stock. And down ~50% since he bought just a couple of months ago. Wow.

[Pratik Gandhi @Patson2531]

@BillAckman @patientinvestor Investors may sell for various reasons. But buy for only one reason alone. To make money. MSFT looks the GOOG of one year ago. Questioned about its basic business model. But they have huge resources to course correct. And surprise.

[Pratik Gandhi @Patson2531]

@qualtrim Peter Lynch was a maestro in simplicity so laymen could understand. But businesses are valued by discounting future cash flows (CF) and Buffett has taught us that where next 10 year CF is unclear, it’s not possible to value. Money is made by paying < value. Comment not about MSFT

[Pratik Gandhi @Patson2531]

Except if you happen to be Sam Altman :)

[MUSKOSOPHY @muskosophy]

“Be stronger than those who hate you, so that they cannot destroy you, and then forgive them.”

– Elon Musk

[Pratik Gandhi @Patson2531]

Amidst so much excitement about the chips businesses, let's not forget that Amazon's chips business (Graviton/ Trainium etc.) is bigger than AMD's. Andy Jassy said as much too. Plus they have a AWS/ e-com/ Advertising/ Prime businesses. AMZN has a huge future.

[Pratik Gandhi @Patson2531]

#MSFT today reminds me of #GOOG a year ago. GOOG was behind on LLMs and basic search business was a Q. Now no one believes MSFT can fix the Copilot issue and there are Qs about Azure/ base business. With companies of such huge resources and talent, some trust is warranted.