Palihapitiya & Social Capital as the new Buffet & Berkshire Hathaway?
Billionaire Chamath Palihapitiya (owner of the Golden State Warriors, Chairman of Virgin Galactic, & Founding GP of Social Capital) spoke on Anthony Pompliano’s The Pomp Podcast yesterday. It was the best macro & tech view I’d heard since Raoul Pal’s in early March.
I will not be surprised if by the end of the month I still think this was the best podcast of April 2020 — and it will probably go in the top five for the year along with the Raoul Pal one. I filled four pages of notes and have distilled what I think are the key themes:
“Following The Breadcrumbs”
Chamath advises everyone to “follow the trail of bread crumbs” in any company/sector right now. He notes that this is not a sector-based drawdown we are experiencing, but more akin to a depression with 15–20% unemployment that will affect all industries since the macro economy is an “interconnected web of businesses.” He predicts a resurgence in Zero-Based Budgeting that will leave most “Nice-To-Have” products/services without revenue and even many “Need-To-have” products/services without revenue.
Resilience (Economy + Tech)
Chamath talks a lot about resilience. He’s bean bearish on enterprise software since ~2015 as most startups shifted to servicing small-to-medium sized businesses (SMBs) which are the weakest businesses in a downturn. Additionally, he noted that America’s achilles heel from globalization was the outsourcing of simple trading goods to China (NYT agrees) and stated that we have to pivot to a more resilient economic model. At Social Capital, he’s focusing on investments into (1) healthcare (2) climate change and (3) education as the three areas that can most quickly more towards resiliency, validating some of my own views:
