The Long Term Investor

I don't see any interest in Tesla in this thread. Is anyone following it? Optimis v3 is a humanoid robot with considerable capabilities. Tesla has been using it in their factories for a while, now. I don't know how they use Optimus or if it is of benefit.

A video of the v3 hand shows it has similar dexterity to a human. It can thumb through pages of a book or wind a watch.

Elon is dedicating a very healthy portion of the Freemont factory to Optimus production.

Is anyone bullish on this potentially world changing product?

 

Well today was fun! I think we all got beat up pretty badly, on paper.

As for tesla robots, I think the markets are so messed up right now someone could find the cure for cancer and the markets would ignore it, or go down because we would live too long and deplete the food supply. All joking aside I think that is going to be a huge win for tesla but you're going to be sitting on the stock for a long long time to get anything out of it.

 

TB16 quote above is a good little investing nugget of wisdom that is rarely mentioned much anymore. Especially, in the current era of instant access to information and constant financial media noise.

Of course, we know why "portfolio watching" can be a nemesis. It invites decisions that often otherwise would not need to be made. It has the ability to lure one into the never-ending vortex of noise. Sometimes it makes us think we are "smarter" than we really are about certain things. It can be a dangerous little trap to get into.

Right now, I could not tell you the exact percentage of gain for this year in my portfolio. In general terms I know that I am in plus territory, but that is about it. I don't log-in daily or add up any weekly or monthly sums. A week or month is not going to derail my long-term plan. Those short time spans simply just do not matter.

I do participate in our thread YTD celebrations, or in some rare cases, pity parties at the end of the year. I will sometimes see the balance when going in and making extra contributions, but that is probably about it.

A good reminder to take things in stride. Investing for a long-term is more about the bigger plan and very irrelevant to the short-term.

 

Speaking of short-term. Friday turned out to be a bug versus windshield kind of day.

I don't know. In a way, I'm not overly surprised by it.

We have been rolling for a while now. Sure, we have had our little fits and episodes here and there along the way.

I always find it interesting. The investor reaction and behavior to some things. I am not immune to it either. Think of it another way.

I don't find it too surprising when considering some things. We have all benefitted from the TECH/AI stuff for a few years now. There have been some massive gains. From the index investor to the individual stockholders, we have made some good money.

There have been many days throughout that have seen some individual stuff gain 5, 10, 15% or more on some given days. Even bumper crop annual returns. Why would we be surprised to see some of those days go the other way in equal fashion? We really shouldn't.

For example, some of the stocks have about 100% to over 500% gains in six months. Why does it surprise us to see a 10-15% loss in a day on something like this. You mean there is volatility in volatile stocks? Shouldn't we almost expect it from time to time? I think so. It just doesn't go one way all the time.

Earnings. We have had several to many quarters of really good earnings. Our returns over these periods reflect this. If earnings had been slowing, lower, or even trending down we simply would not have had the boom in returns. I don't know when that trend will show up, but when/if it does you are certainly going to notice it.

Of course, the media is all over it. Just look at some of the previous posted headlines. "Worst ever," "Record breaking," "Plunge," "Trillions wiped out." Are we lining up for the bread line yet? Should we start readying our papers for government assistance yet?

It just doesn't surprise me too much. We obviously didn't enjoy it, but it kind of comes with the territory.

 

Oh yeah, I thought this little exercise by RTN was interesting.

No, I am wise enough to stay out of the AMD versus NVDA battles. People get very personal about those things in the investing world.

I did find it a good little read though. It is amazing to see the growth of some of these companies. The other thing is how quickly some of it occurred.

A decent point brought up above though. A lot of times people forget about room left for growth and how much of that was priced in early on. It gets harder and harder to keep that type of growth up. When you think about doubling or tripling in those terms it becomes much less likely.

That doesn't mean any particular company would become a bad investment over a long period, but explosive growth can become limited. The math just works that way.

Anyway, an interesting dive into some of the particulars in these two.

 

Nice post to share some of your thoughts on a number of companies. Always a good read from TB16.

 

I will post on value investing. Anyone not interested in value investing should skip.

From the mid 1990s to a few years ago, I followed Warren Buffett and studied value investing. Valuing companies isn't as hard as it seems to someone who cannot do it.

Three unique aspects:

- Value an industry leading company (Intel, nVidia, Exxon)
- Value a growth company (A company with unlimited growth potential, like Tesla was in 2016)
- Value an innovation company (new idea that will change the world)

It was getting increasingly difficult until last fall when I realized I could not do it for a ton of companies.

- I can still value an oil company with reasonable accuracy
- I can still value retail companies
- I cannot value the bulk of tech companies

AI

I have no idea who will win the AI race and I don't believe anyone else does, either. It could be Microsoft/OpenAI but they appear the least likely to me. Anthropic has a shot at carving out part of the industry. Google is the most interesting company in this space. While I'm not betting on Google, they are ahead of the industry in many ways. It's really everyone against Google (or tensor versus the world). I don't know how that will turn out. xAI... unlikely but possible. Meta.... they are definitely in the race and working harder than anyone realizes.

How do you value Palantir? We don't know the product. We can't see most of their contracts. To a large extent, their fate pivots on the will of the Pentagon. With Palantir, every data point needed to value a company is an unknown. And yet, people claim they can value Palantir; they cannot; it isn't possible.

The AI company most possible to value, in my opinion, is Anthropic. Some of the data needed to guess at a value is available but there are too many variables to have any confidence. I've placed a value on Anthropic. If I turn out to be correct, it will be a lucky guess.

Let's do some analysis on the easiest AI company to value: xAI. If we take all available information and carefully consider the value of xAI, we arrive at an extreme confidence result of $0.00. No problem. Unfortunately, we're investors so we must also consider future value. It turns out, that is also easy. The 10 year value of xAI is between $0 and infinity. High confidence.

In order for xAI to succeed as wildly as Elon imagines, they will need to accomplish the following:

- Starship becoming the space workhorse (95% likely)
- Orbital data centers being viable at the required scale (60% likely)
- IC production capability (this isn't strictly required but it's required for xAI to succeed wildly because we are going to learn next year that companies try to starve each other of chips in the upcoming street fight)
- Grok will need to evolve significantly (70% likely... Elon has been working on this for years and they've made considerable progress but, like self driving, they have never quite gotten there)
- They will need to retain staff in an industry where people are poached like breakfast eggs

That's a lot of dominoes to fall. Hence, I cannot bet on xAI.

Let's consider Tesla. In order for Tesla to grow, xAI must succeed. It's more than just building robots above the dexterity threshold required to make them useful, which is already wildly difficult.

SpaceX is the most likely to succeed, out of all Elon's companies. Starship will change the world, even if xAI, Starlink, and Tesla fail. If/when these three companies are combined, calculating value will be impossible.

I have no bets on AI companies but if I had to pick, it would probably go like this: Meta, Google, SpaceX/xAI/Tesla (this is my long shot), Palantir, Anthropic, Microsoft/OpenAI, et al. Confidence level: 0.


Digital Technology

CPU

An early look at Intel's Diamond Rapids is extremely impressive. They will close the gap considerably, perhaps at or near parity with AMD. Intel needs this to stay in business.


AMD/nVidia

The reason AMD is the favorite here is they have room to grow in the GPU/AI space. AMD is maybe over valued by 8x and that is surmountable with growth.

How is nVidia going to grow into their wild over-valuation? If there is a path, I don't see it. What's more, Jensen's rock star persona is wilting.

With these companies, you're not just betting on them to win, you're betting on them to beat the massive spread. The up side is not high but the down side is massive. Hence, I own neither.


Samsung/Micron

I like both of these companies because their growth is predictable with reasonable accuracy. I feel I can (have done) value them.

Samsung was first to the High-NA party to double their production speed.

If you consider 20% production increase from process shrink, 120% production increase from high-NA EUV, and 400% production increase from new construction, you end up in the range of 10x increased output. If you consider they will be able to sell 100% of their capacity into the foreseeable future, that made them considerably under valued. It was easy to see value with both of these companies.


Conclusion

Finding value is difficult and it takes different skills than it used to but it's still possible.

Valuing companies is still possible for some industrial segments but it's getting less. Basically, Buffett style analysis is going obsolete.

Valuing tech companies is basically impossible. Even picking winners and losers has become a low confidence game. I'm retired and remain comfortable with a high ratio of fixed income. Recent massive investment gains have helped me relax about the future. I pray my ego doesn't cause me to go broke (something we should all be concerned about).

 

There was quite a bit going over to defensive type stuff Friday like consumer staples and so on. Seen this a few times already this year with a bit of tech sell off. Although, there could have been some of that prepping for what you mentioned above.

If so, the private equity firms and the VC have to be literally licking their chops about it. They are going to be positioned beautifully at some point in their exit strategy. The fever and fluff surrounding it has to sound like a casino slot machine payout to them at this point.

 

Some interesting thoughts. GOOG has been steadily doing what needs to be done and executing at a pretty good level in this area.

MSFT has clearly had some second thoughts about hitching their wagon to OpenAI. Seems this has been a frequent deal with OpenAI and other companies they have announced big deals with. Only later we begin to hear or see a bit of disagreement, fallout, or significant contract change. Something just seems off when those same type of issues crop up with everybody you are dealing with.

Government contracts are a lucrative deal, not just to PLTR, but others as well. Of course, when the taxpayer is your bankroll, there is no contract too expensive. Nor is any product too overpriced to be bought. I'm not picking at PLTR. They are just one of thousands that get this type of deal. In addition, the government has been quietly (sort of) taking up some ownership/stakes in private companies as well. What could possibly go wrong?

"0 to infinity" means you will be right either way. Are you sure you haven't been paid to be one of these analyst for the media. Actually, with what we sort of know about it all at this point, that's a fair estimate. I think it was Peter Lynch that came up with the saying....IPO actually stands for Its Probably Overpriced.

All the above, it is an interesting time to watch all of this develop and take place. We are witnessing it as it evolves. Some years from now it will be very wild to see just how right and/or wrong we will be about some of it. Many, many years from now people may look back and think "what a time to have witnessed that" or "those were some dumb asses to think that was possible."

 

Thanks for the heads up TomB16, indeed the video's are pretty impressive.
What do think ? Buy some stock for the kids ?

 

Speaking of AI. The US is not the only place seeing a boom related to it. It is a global thing too.

https://awealthofcommonsense.com/2026/06/the-ai-trade-is-global/

 

Some interesting information on stock ownership and young folks. Market participation is a good thing. We often hear about the negative stuff going on with young investors, but as usual that is not always accurate.
https://awealthofcommonsense.com/2026/06/young-people-like-stocks/

 

I like the company but don't personally own any Tesla. It's a medium shot (neither a long shot nor a sure thing).

 

The final installment of my manifesto is on perspective. This is how my reality differs from what probably comes across in my posts.

I've posted some moves on this forum that have been tremendously profitable. Samsung was 3.75x. Micron is 10x, so far. Tesla was 24x.

I've been fortunate to have several other similarly performing investments which I haven't spoken of.

There was also an alternative financing company I owned for 10 years. I bought it, it distributed at 8~11% for a decade. It was one of my favorite holdings. In 2023, it stopped distributing and four months and then stopped trading. My gang buster distribution company had gone bankrupt. Even if you consider the distributions, the return was about 1.3x over a decade. 1.3x is a significant loss to inflation.

Two of my REITs performed poorly during the pandemic, although they are all distributing quite strongly again. I continue to be happy with them. These distributions are folded into money markets.

This is my last 20 years of trading history.

I am not capable of picking winners and losers. Investing isn't a lottery to me. I spend a huge amount of time researching companies, technologies, and thinking about the future.

When I find value, I'm not timid about moving in. These grand revelations have happened maybe fifteen times in the last 20 years. Very oddly, two good ideas have come to me in the last year.

I stay close to VOO, money markets, and various fixed income mechanisms, nearly all the time. If I see no obvious opportunity, I am wildly conservative. I worked way too hard for my money to gamble with it. That's why 99% of the time, I'm the most boring investor here.

 

Nothing wrong with that. Sometimes investors feel like they should always be doing something and tinkering to no end.

 

An article about SPCX IPO, from a Motley Fool website:

The unusual lockup period

When a company has an initial public offering, major shareholders, such as company insiders and early investors, are prohibited from selling their shares for a set period -- typically 180 days. This lockup period is designed to prevent insiders from artificially crashing the stock price, particularly if the stock price rises dramatically in the first few days after going public. In short, the idea is to allow the market to establish supply and demand, rather than institutional investors.

However, SpaceX is doing things differently. According to the company’s prospectus, SpaceX will allow investors to sell 20% of their stock on the second day of trading after the company’s first earnings report as a publicly traded firm -- in this case, its Q2 earnings report. Investors can sell another 10% of shares if the stock is 30% above the IPO price for at least five of the first 10 trading days after the earnings report.

There are other benchmarks built in as well -- at 70, 90, 105, 120, and 135 days after the IPO. Another 7% of SpaceX shares unlock at each of those points. Musk himself is not allowed to participate in any of the early-release provisions.