A Breakdown of Chamath Palihapitiya’s 2021 Portfolio

Speaker 1: Samarth Paly Sabatier, I don’t know if you guys know much about him, he’s one of the better modern day investors of our time. He founded the venture capital firm Social Capital, and he’s achieved amazing results with his investing company so far between 2011 and 2019. Social capital has delivered a gross, absolute return of 997 percent. This is more than three times the 325 per cent returns of the S&P 500. If we look at that annually, that’s an average return of thirty two point nine percent.

Not bad in the slightest. So what I’m going to cover in this video Chamas portfolio over at Social Capital now, they own 74 different investments in their portfolio. However, most of these investments are private, which we can invest in. So instead of going over 74 different investments, I’m going to pick out the ones that are relevant to us, the major investments that he’s made and the major ones that we, too, can invest in. What I first point out about each one of his positions is we do not know the exact size that he has in each one. He doesn’t have to disclose this. His investing company, Social Capital, is not public, unfortunately. Now, one of the stocks that Yarmuth has been a long time investor in is Tesla Tesla. I’m sure you know what the company does. The other electric vehicle and clean energy company. Now, this clean energy part is the game changer.

Why? Because the world is quickly clicking on how important sustainable energy is. At the end of the day, there’s only so long that you can keep polluting the earth before things go bad. So the world wants to change to a better form of energy. This is where Tesla comes in. They are the king when it comes to electrification and decarbonization. This is why Thomas says the company can be worth a lot more money than it is today because of how big the market actually is. He said there are trillions of dollars of bonds of capex and value sitting inside the energy generation infrastructure of the world. That’s going to go upside down. And when that goes pear shaped, Tesla will double and triple again. Delivering clean energy and allowing the world to be sustainable is an incredibly important thing that will be rewarded by markets and individuals.

That’s what we’ve seen so far with Tesla and the way the world’s going, we’re only going to see more. So Jamad, he’s a big fan of finding companies that have high potential and then betting big on them, one of those investments is slack. In fact, he wished that he put even more money into slack from day one. He said one of our biggest investments is the company called Slack. And I still think to myself, why did we not lead every single round and write the entirety of the fund into that company? It was obvious from day one that Stewart Butterfield is an iconic CEO and that Slack is going to be one of the most important tech companies in the world. So those are big words. You know, slack at the moment is valued at 24 billion dollars. It’s a publicly traded stock that we can all buy. And of Chamas words do come to fruition. Slack would be worth trillions of dollars, just like the other most important tech companies in the world. That means it’s got the potential to not just ten times its original investments, but 20, 30, 50 times return. This is why he invested so heavily into it. He saw a regular risk compared to the potential return. So to all you out there, I just want to quickly explain what Slark is for those who don’t know. OK, think of email. We’ve had email for how many years?

Around 50 years. And its technology has not really been updated. This is where Slack fits in. Unlike email, conversations and Stack are easy to follow. There are more than conversations. You can make calls, share files and connect with other apps. So just think of it like a modernized version of email, similar to how Facebook is a modernized version of Bebo and Amazon Messenger. And it’s for these reasons why, Polyposis said. I think it is the most incredible business that we have seen, probably the next closest thing to it as a company that just went public recently, which is zoom and quotes. And by the way, he said that way back in 2019 and we all know what happened to Zoom. Since then, it’s become widely used pretty much throughout the whole world and the stock has gone up over 300 percent. Slack has the potential to do the same over the next couple of years. For anyone that has followed your math over the years, you will know he is a big fan of Bitcoin. In fact, all the way back in 2012, he was talking about buying Bitcoin when it was just 200 dollars a coin or crypto fans will be glad to know that even today he is still a big backer of Bitcoin as an investment. He said, where is it going? Is probably going to 100K then a hundred and fifty, then two hundred thousand in what period? I do not know, five years, 10 years. But it’s going there and you might rightfully ask why? Because Bitcoin is a hedge against global uncertainty and a hedge against these weird economic and governmental conditions that we’re in. Yeah, but he said the reason is because every time you see all of the stuff happening, it just reminds you that, well, our leaders are not as trustworthy and reliable as they used to be. So just in case, we really do need to have some kind of, you know, insurance we can keep under our pillow. That gives us some access to an uncorrelated hedge. Its Money 2.0, a huge, huge deal. OK, these next two companies that Yarmuth owns, there’s a good chance that you haven’t heard of them. That’s because they’re still in their high growth phase and they’re not big name companies. Yet these two stocks are going to be made available to the public in the short to medium term future. And they’re ones to look into if you’re looking for the next Amazon, Facebook, Netflix, etc. Not saying that they will be, but they could be. OK, so the first one of Thomas stocks that he’s going to put on the public market is called Sophi. And Sophi is a personal finance company.

Their products include student loan refinancing, mortgages, personal loans, credit card investing and banking through both their mobile app and desktop interfaces. Now, essentially, what they’re doing is disrupting the banking sector. Here’s what your math said on his sci fi investments. A lot of the things that I do is try to look back on the investments that we’ve made like Amazon and Tesla, and try to find patterns. And in this investments, what I was trying to do is map those patterns into financial services just because we’re at a point in time where it’s clear that banking infrastructure isn’t meeting the needs of US consumers. And so what I did was try to figure out what was broken in banking and then try to figure out which company was best representative of the solution that people wanted. And quotes essentially the company that he found that would do this was Sophi Lozano fees, fair and transparent lending and a full suite of products for a one stop shop so far is the new disruptor in banking. Another big disruptive aftermaths is called open door. I’m going to let him explain this investment for himself.

Here’s what he said on it. The reality is in the last 20 years, but even specifically in the last six months, everything that could be bought and sold online has moved online except real estate. And it’s interesting because this is a category that touches every single American, 68 percent of Americans own a home, 32 percent probably want to at some point, five million homes are sold every year. This is the largest undisrupted market in the US. It’s worth one point six trillion dollars. And this is where we found open door. How does this work? You as a consumer can now go to open door Darkon and within 24 hours they will give you an all cash offer for your home. So the more offers that they’re able to make, the more homes that they will buy and sell, which means the more value added services that they can automate online. For example, mortgages, title escrow, all of these things where you used to have hundreds of pages of documents can now all be done online with Open Door. The last major investments that I would be remiss if I did not mention it is Amazon. Amazon is one of my last great investments that he’s made a lot of money on. I wish I invested in a back when he did. We all know what the company does. The other e-commerce platform. You don’t really need to take your car to a shop anymore. Just make a couple of clicks on Amazon. It will be delivered straight to your front door. So that’s e-commerce. Then they’ve got their A.W. segments, ranging from database services to machine learning, to robotics to virtual reality. Their AWG segments has done extremely well for Jeff Bezos and Amazon. So it’s fair to say that they have earned their growth over the past 10 or so years.

The stock is up over 2500 percent from one hundred and eighteen dollars a share in 2010 to above three thousand dollars today. And that’s the breakdown of the key investments relevant to US investors in his portfolio. Obviously, I don’t want to go over every single one of the 74 privately held stocks that we couldn’t buy. I wanted to go over the ones that I thought were the most important. So I hope it was helpful. And in the years to come, I think this guy is someone that we’re really going to need to follow. His goal is to be our generation’s largest investment company, he said. I don’t think social capital will be a venture capital firm. I think eventually what I’ll do is take social capital public. My ambition is to be our generation’s Berkshire Hathaway Sharma. I pity someone that I’m going to be following pretty closely in the years to come.

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