June, 2024 Update

We are getting close to the half-year mark for this year. Let me take this opportunity to briefly share some thoughts with you:

  1. First things first, after spending the last three months on studying semiconductors, I will spend the next couple of months on healthcare industry. I will publish this month's Deep Dive on IQVIA Holdings (Ticker: IQV) by 25th of this month. In the following month, I plan on doing a Deep Dive on Sartorius Stedim Biotech (Ticker: DIM).
  2. One of the things that I have been thinking about is how challenging it has become to figure out the long-term implications of the current Capex bonanza of Mega Cap Tech companies. While it may be tempting to bucket all of these capex in a monolithic fashion, I suspect that is likely to prove to be too simplistic. Google, Microsoft, Meta, Amazon have sufficiently different strategies around AI that they will not necessarily succeed or fail simultaneously. The funny thing is when I started investing in the US back in 2018, I remember feeling a bit overwhelmed while studying some of the Big Tech companies and I imagined things will probably feel easier after studying/following these companies for a few years. Six years later, while it doesn't feel as overwhelming, the reality remains it still is quite difficult to figure out how the moats are going to evolve in the future in the big tech land. I don't have all the answers yet and the broader landscape remains quite fluid. While perhaps most of us have been actively thinking about these questions, unfortunately "Magnificent Seven" has been incorporated into our investing lexicon over the last couple of years. I encourage investors to not think about all the capex in uniform terms, rather appreciate the potential for dispersion in future returns due to AI.
  3. In my 2021 Annual Letter, I wrote the following:
...because of the business model of MBI Deep Dives, it can be challenging to choose certain companies for deep dives. For example, I am nervous to take a shot at semiconductor companies (crypto is also another area of apprehension) since I suspect one month may not be enough to understand the complexity of the whole industry.

Now that I have done Ethereum Deep Dive, a Primer on Semiconductor, and two Deep Dives on semiconductor companies (Texas Instruments, and TSMC), you can see I have tried to address this "weakness" of MBI Deep Dives as I grew more confident about tackling more technically challenging companies over time. Part of the reason for covering semiconductors is simply due to my somewhat recent realization that it is getting quite difficult to follow some of the mega cap tech companies I own without understanding semiconductors itself. I do want to reiterate that I am still on the very early stage of my semiconductors journey and you can expect me to cover two to three semiconductor companies every year at least for the next five years (if not more) regardless of what's going to happen to the stock prices of semiconductor companies during these years.

One of the things I have become quite comfortable over time is to trust the market to provide volatility no matter how great a company/industry is. Even if AI is the mega theme for the next 10-20 years like the internet was back in late 90s to early 2000s, I am almost unreasonably confident that Mr. Market will provide us ample volatility along the way which is why my only focus is to study the companies closely, and not necessarily catch the "current" wave.

I am starting to do the same with healthcare industry as well. Like semiconductors, I am likely to cover 2-3 companies from healthcare sector per year going forward. As a generalist, my goal is to keep studying companies across wide range of industries.

  1. One of the questions I received a couple of times is whether I have incorporated Gen-AI in my research workflows. It's early days, so I'm not sure whether my current behavior will stick for years to come. Let me mention a couple of tools I have been using frequently over the last few months.

    I have started using Cubby to manage all the highlights from annual reports, earnings transcripts, blogs, podcast etc. in one place while working on a Deep Dive. The biggest benefit from having all of my highlights in one place is that it is searchable, so it is lot more convenient to find the source of a particular quote or excerpts quickly. If you want to try it out, you can use the code "MBI" (disclosure: I have no financial interest in this recommendation).

    I have also been using Perplexity for mostly two types of things:

    a) to understand complex topics which was quite handy while studying semiconductors. Asking follow-up questions and requesting it to simplify the jargons certainly helped while going through jargon filled world of semiconductors, and

    b) uploading earnings transcripts and asking questions about the recent earnings call. While I still read earnings transcripts in full for my largest holdings, for smaller positions I have resorted to this method to stay updated. As someone running one-person investment research service, I appreciate this efficiency/productivity gain.
  2. Finally, last month, I went to Omaha to attend Berkshire's AGM. One of the best things about attending this meeting is the opportunity to meet some of my subscribers. As I work from home writing Deep Dives, my work can feel a little amorphous at times; so I enjoy the fact that it feels a lot more tangible when I meet some of you.

    Thank you for supporting my work. I appreciate it very much!

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