Compound Collaboration, Month #5
Every month I put aside some money into a portfolio aimed at long-term bets over the next 20 years. I will be gifting this portfolio to my future kids someday- in the hopes of using it as an educational tool alongside the memos I write to teach them about the world and to have a shared activity to work on together as they grow up.

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Here is the performance so far from the first four months:

‌‌Month #1, July 2020: $ARKK +51%
Month #2 August 2020: $ARKG +62%
Month #3 Sept. 2020: $BTC.X +88%
Month #4 October, 2020: $BTC.X +21%

Right now the portfolio is all about making bets on what the far off future will look like. Since the time horizon is possibly 20 years plus, my strategy thus far has been betting on innovation.

This month I'm going to pick an individual company for the first time. There's more risk with picking one single company, because pretty much anyone can go out of business over the next 20 years. But I am making a bet that Artificial Intelligence is going to be a huge part of the business landscape in the future.

That's why today I'm adding Nvidia to the portfolio today.

I've written a couple of memos over the past month about Nvidia. You can see them here and here, but the summary is:

  • Artifical Intelligence is expected to add $13 trillion dollars to global economic activity by 2030 (Source: Mckinsey)
  • Artificial Intelligence relies on GPU acceleration, both for training and inference. NVIDIA delivers GPU acceleration to data centers, desktops, laptops, and the world’s fastest supercomputers.
  • The CUDA platform/language is an under appreciated moat for Nvdidia, locking in developer mindshare.

  • Nvidia's stock is priced for data centers and gaming, but it's too early to start discounting AI revenue. But on a timeframe of 20 years, now is a good time to make the bet.

If you were setting up a portfolio for your future kid, what companies would you feel most confident will be around and thriving in 20 years?
Aaron Kettl's avatar
Great post! You inspire me as a father of two.

Here are a couple innovative companies that come to mind:
$SQ - future bank of the world
$MDB - future database management
$ESTC - future data mapping & processing
$APPN future business process automation
Nathan Worden's avatar
Big fan of Square and Appian. Here's my write-up of Appian:

MongoDB and Elastic come up a lot but I haven't done my due diligence yet. Would love to hear your thoughts on those two @aaronkettl
Aaron Kettl's avatar
$ESTC offers a completely new way to search and parse large sets of data. I’ve learned about Elastic search from working with engineers and seeing what it offers. We’re able to easily make sense of unstructured data. This is becoming more of a challenge as we have more and more data to parse.

I’ve also learned about $MDB from working with engineers who have explained that MongoDB offers speed, reliability, security, and performance for storing and processing data, and their services are far superior to most cloud companies.

When I see engineers make a technical assessment and consistently choose these two providers, I trust their decision.
Nathan Worden's avatar
That's a good way to do research- talk to the engineers and follow their lead! Thanks for your thoughts!
Gaurav Mishra's avatar
Totally in sync with $ESTC. $MDB is an interesting choice; most of the NoSQL use cases are being moved to more and more streaming databases. When Confluent IPO that'd be a great buy.

Still $MDB would stay in for long! It's been a tried tested choice for NoSQL for almost a decade now. Not sure how I missed that :)



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