David Eborall
@davideborall
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SaltLight Capital Management - Portfolio Manager. Betting on Durable and Indispensable Businesses across the Globe. 🏋️♀️ Long-Term Investing Takes Courage !
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Joined June 2009
Our SaltLight 3Q24 Letter is out. Game industry growth is slowing (2%-4%). Our thoughts on how we think this industry will evolve. Bucket 1: Evergreen franchises Bucket 2: UGC Bucket 3: The shrinking rest $APP $SE $TCEHY $RBLX
Our SaltLight 3Q24 letter is out. We talk about the future of the game industry. $APP, Tencent and $SE
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Always good to hear a bearish takes. A few things to add to the conversation: 1) It’s worth looking at the history and business model of Swagbucks which is essentially affiliate marketing: 2) Games part of $APP business has been stagnant compared to the "matchmaker" part. 3) $APP makes money on performance (Return on Ad Spend) - so if users acquired from Swagbucks were low quality, return on spend would be very low and advertisers would simply stop spending money. I’d be interested to hear how the author reconciles this? 4) Zynga (FB publishing risk). Not sure about Meta, but Google’s networks business has been in decline and in fact Google uses $APP traffic through header-bidding as a traffic partner. Likely $META is in the same situation that they just want as much inventory as possible. Header bidding is a win-win to publishers (who maximise yield) and advertisers who just want ROAS. 5) Insider selling. Perhaps the most interesting insider-selling is when KKR sold down significant portions of $APP stock in the < $55 ($APP bought most of this stock back). It’s not like there was information asymmetry as the $APP CFO at the time was the deal partner.
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RT @FunlessSponsor: We closed our first deal as an independent sponsor a few weeks ago. It’s a nice service business with good margins in a…
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This some great writing on AI ROICs for hyperscalers.
Scaling laws, and the resultant belief that to the biggest spender go the spoils, have turned AI into a manufacturing and infrastructure problem. The capital intensity of our largest tech companies is now significantly higher than the broader S&P 500.
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Here is a TV segment from Cyber Monday last year at the new $AMZN 'state-of-the-art' Shreveport facility. Busiest e-commerce day of the year (1m packages throughput). How many people do you see picking and fulfilling? 2500 employees work there at full capacity. 10% are there to maintain infra.
Surprised not more noise about Andy Jassy's tenure to make $AMZN more efficient. Since COVID re-opening, employee growth stagant at ~1.5m (last 10 qtrs) - despite $150bn of incremental revenue (LTM run-rate). Robotics and AI prob taken the incremental labour tasks.
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@FinanceGhost @MagicMarketsPod The greater question is why hasn't $ASML raised their 2030 revenue guidance since 2022 (despite AI hype and stratospheric capex budgets)?
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2/ in 3Q24, he was asked the question about Robotics, AI and the logistics network:
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I’ve been really lucky (career-wise) twice in my life: First, as as a teenager in the mid-90s, when the Internet was born and I could earn university money through a software dev hustle (because nobody understood HTML). Second, is in the last few years with the proliferation of AI just as I started an investment fund.
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Fascinating where the discussion is going on future proofing coding jobs.
"If you're in tech, run in one of these directions." In this clip, @amasad (CEO @Replit) shares two paths to future-proof your career in the AI era: 1. Get as close to the metal as possible (e.g., NASA won't use GPT-Javascript to run rockets) OR 2. Become a generalist who can go from idea to end product with AI end to end. Amjad and I had a great chat covering: • Why now's the best time to learn to code • A live demo of building a nutrition tracker app • The rise of personal apps and the future of work Some quotes from Amjad: "The return on learning to code doubles every 6 months. AI automates many of the boring parts. What's left is you and your creativity — the most exciting part of coding." "The ultimate test for an AI coding agent is if you can make an app faster than you can Google for it. I think we've done it." "I’ll be honest with you. I think roadmaps are dead. Here's why..." 📌 Watch now:
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A wake-up call. Afrikaners make an outsized contribution and are vital for the SA economy. Political leaders are gifting the US with skilled people who take all the risk for national food security. What happened north of the border when their farmers left?
[WATCH] Neil Diamond, President of the SA Chamber of Commerce USA, says in the 18 hours since the executive order was signed by U.S. President Donald Trump, they have received more than 10,000 requests from South Africans who wish to relocate to the United States.
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This is what it is all about.
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@madaboutmarkets I’ve seen articles where folks who had mastered slide rulers said the same thing about calculator technology. Humanity seemed to still innovate more after that. GPUs wouldn’t exist if we hadn’t ceded our thinking to calculators.
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Amazon North America operating margins are now 8%. Few retailers achieve this. $AMZN can do it because they have the eyeballs to sell advertising.
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Brookfield Corp's core business valuation is nuts. $BN Work with me here.... $BAM - they've just restructured equity to be included in major indices and open the free float - nice and easy to work out the BAM market cap = $95bn $BN owns 73% = $68bn. Ok, $BN market cap is $95bn... (keeping up here?).. so $26bn for the remaining "capital-intensive" business. Insurance biz alone is doing $1.4bn LTM CF. Then... you get permanent cap vehicles (doing $1.6bn LTM CF)... Property biz CF is awful ATM, but anyway. Debt and prefs ($16bn) Core EV $26+$16 ($42bn) Nuts.
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