Nearly all “real” growth (adjusted for inflation / asset-inflation) will come from those companies and economic models which are focused on (1) machine networks (2) operating system logic layers (3) data (4) AI/ML/neural nets (5) network effects. These together create a flywheel of exponential value creation we’ve never seen before and it is our view that this is an unstoppable force you cannot afford to be under-invested in.
While the New Economy is rapidly growing, we continue to maintain quality investments in the Old Economy. We invest in quality real estate as a means of shorting fiat currency via mortgage debt at, what we believe are, significantly negative real interest rates. We believe we have been in a period of negative real rates for many years and will continue to be until a monetary reset occurs. It is our bet that based on the levered-long state of the global economy (governments, pensions, corporates and households are all net levered-long) an asset-deflationary period is not likely as it would result in the complete devastation and reorganization of global wealth. Much more likely is a continued and accelerated inflationary reset until an eventual global cooperation event occurs to introduce a new financial system. We aren't holding our breath, but we are diversifying.
We look for investment opportunities in which the economic model combines strong network effects, high gross margins / unit economics, capital-lite scaling with emerging technologies such as neural networks, AI, machine learning, VR, distributed computing and distributed ledger technologies.
Examples: Businesses (ie, Amazon) and platforms (ie, Bitcoin/Ethereum) which offer clear incentives to participating in the network (lower prices, faster shipping, mining revenues, etc); and which offer exponentially increasing value to existing participants with the addition of each new participant (network effect); and, while scaling exponentially into a monopoly it is maintaining or improving customer / user satisfaction (Google/Amazon/Tesla... and not ATT/Comcast).