![]() ![]() S&P 500 Index lost 10.8% in 1957, so Buffett’s investors actually thrilled to beat the market by 20.1 percentage points in 1957.īetween 19 Warren Buffett’s hedge fund returned 23.5% annually after deducting Warren Buffett’s 5.5 percentage point annual fees. That year Buffett’s hedge fund returned 10.4% and Buffett took only 1.1 percentage points of that as “fees”. His investors didn’t mind that he underperformed the market in 1958 because he beat the market by a large margin in 1957. That would have been 9.35% in hedge fund “fees”.Īctually Warren Buffett failed to beat the S&P 500 Index in 1958, returned only 40.9% and pocketed 8.7 percentage of it as “fees”. secretly invested like a closet index fund), Warren Buffett would have pocketed a quarter of the 37.4% excess return. If Warren Buffett’s hedge fund didn’t generate any outperformance (i.e. Warren Buffett took 25% of all returns in excess of 6 percent.įor example S&P 500 Index returned 43.4% in 1958. Back then they weren’t called hedge funds, they were called “partnerships”. He launched his hedge fund in 1956 with $105,100 in seed capital. Warren Buffett never mentions this but he is one of the first hedge fund managers who unlocked the secrets of successful stock market investing. There is a good chance, in our view, that it will be blocked by regulators, which would mean the future opportunity to expand its offerings to the developer community (beyond designers) may not occur.” For Adobe, the status of its pending $20 billion-plus Figma acquisition is also uncertain. As a result, our position sizes in Adobe and Alphabet remain sizable. There are also significant barriers to building leading AI offerings in these areas. ![]() While we think it remains early days for ChatGPT and the capabilities of these types of LLMs and generative AI programs like DALL-E, the technology seems to be progressing at a fast rate and will at least require a strong response from incumbents.Īs of now, we believe Alphabet and Adobe are leaders in their own right in these areas and have a clear path to improving their existing offerings with AI advancements, which would allow them to be net beneficiaries of AI. We now see AI systems others are developing, including LLMs and generative AI offerings, that could be more competitive in the future. At the same time, breakthrough technologies like AI can open the door to additional competition and/or impact a company’s profitability levels. Both companies already use generative AI to the benefit of their users in anticipating how content creators edit their work (Adobe) and in how search results are anticipated and generated (Google). Interestingly, both Adobe and Alphabet could see benefits or threats from the emergence of generative AI and large language models (LLMs). (NASDAQ:ADBE) is AI systems and their capabilities, including generative AI. “One area we are watching regarding Alphabet and Adobe Inc. (NASDAQ:ADBE) in its Q1 2023 investor letter : Polen Focus Growth Strategy made the following comment about Adobe Inc. Ken Griffin’s Citadel Investment Group is the largest stakeholder of the company. (NASDAQ:ADBE), with collective stakes worth $7.3 billion. According to Insider Monkey’s first quarter database, 99 hedge funds were bullish on Adobe Inc. ![]()
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