While high capex is often seen as a negative, for giants like Alphabet and Microsoft, it functions as a powerful moat in the AI race. The sheer scale of spending—tens of billions annually—is something most companies cannot afford, effectively limiting the field of viable competitors.
To combat the urge for constant activity, which often harms returns, investor Stig Brodersen intentionally reviews his portfolio's performance only once a year. This forces a long-term perspective and prevents emotional, short-sighted trading based on market fluctuations.
An effective investment strategy involves identifying your personal 'unfair advantages'—be it temperament, specialized knowledge, or even a favorable tax situation. Leaning into these unique strengths, rather than competing where you are weak, can provide a significant edge in building and managing your portfolio.
While having a disciplined rule like reviewing a stock after 24 months is useful, it should be subordinate to a more critical rule: sell immediately if the fundamental investment thesis breaks. This flexibility prevents holding onto a losing position simply to adhere to a predefined timeline.
Instead of seeking feedback broadly, prioritize 'believability-weighted' input from a community of vetted experts. Knowing the track record, specific expertise, and conviction levels of those offering advice allows you to filter signal from noise and make more informed investment decisions.
True understanding of a business often comes only after owning it. Taking a small (e.g., 1%) starter position can initiate the research process and shift your perspective from a casual observer to a critical owner, revealing nuances and risks not apparent from the outside.
Unlike industrial firms, digital marketplaces like Uber have immense operational leverage. Once the initial infrastructure is built, incremental revenue flows directly to the bottom line with minimal additional cost. The market can be slow to recognize this, creating investment opportunities in seemingly expensive stocks.
Beyond AI infrastructure providers (NVIDIA, AWS), a key opportunity lies in the 'layer below'—companies like Uber and Spotify. They leverage big tech's tools but dominate specific verticals because they possess superior, niche-specific user data, which AI then supercharges for monetization and personalization.
While many see autonomous vehicles as a threat to Uber's ride-hailing, its delivery segment may be more important and defensible. Automating last-mile delivery of goods from varied locations is significantly more complex and less economical than automating passenger transport, providing a durable moat.