We Study Billionaires - The Investor’s Podcast Network

PayPal Entry Reassessment at $90

+0.75%current return

"It wasnt really making new lows. So you could say, okay, its still, the space is still forming, but I need more evidence. It probably will be a better buy to buy at $90 after weve get some confirmation of good news."

The manager observes that while PayPal (PYPL) has stabilized after forming a base, the current price action indicates that waiting for further confirmation may offer a more attractive entry point around $90, improving the asymmetry and lowering downside risk.

Robinhood Turnaround: Short-to-Long Trade Strategy

-5.95%current return

"I knew they had $8 a share in cash, and I sorted it from 25 down to 10. And then at 10, with $8 a share in cash, I was like, the short's done. But I continued to follow the company and was impressed with their business changes."

The fund manager describes his tactical shift on Robinhood (HOOD), initially shorting the stock during a period of speculative excess before exiting his shorts as the stock built a technical base. He then went long to capture substantial upside, anticipating a multi-bagger outcome with catalysts such as improved business fundamentals and product innovation.

Tesla Shifts Dojo Focus Toward AI Inference Chips

-1.36%current return

"But I also think that, more importantly, it's probably this, that Tesla has always made its own AI inference chips that are essentially in the car... And Tesla knows exactly what they want from the inference chip because they're building the software that's going to run on the chip."

The discussion highlights Tesla’s strategic pivot from developing a full Dojo training supercomputer to focusing on producing AI inference chips. This shift underscores Tesla's aim to optimize real-time decision making for autonomous vehicles and robotics while reducing reliance on external suppliers like NVIDIA. Investors should consider how this move could enhance cost control, efficiency, and competitive positioning in the rapidly evolving AI and autonomous driving space.

Long Walmart and Short Competitors Strategy

+3.07%current return

"Walmart was noted as a resilient, low-cost provider. Tiger Fund went long on Walmart and shorted its higher-priced competitors, capturing value from its dominant market position."

Robertson’s strategy included taking a long position in Walmart due to its competitive moat as a low-cost operator in retail, while concurrently shorting competitors trading at premium valuations. This trade idea underscores the benefits of exploiting mispricings between industry peers.

Ford Motor Company Capital Allocation Commentary

+2.71%current return

"Ford, a business that I’d already mentioned that Julian really liked, was partaking in what he felt was some subpar capital allocation... He believed that if Ford sales were to plunge, a leveraged buyout could occur at around $77 per share, which, given its mid-single-digit PE multiple, presented a compelling risk/reward profile."

Robertson highlighted Ford as a recession-proof play with low downside due to potential LBO activity and attractive valuation levels. His criticism of Ford's capital allocation and emphasis on buybacks implies that investors might benefit from reassessing Ford’s valuation and governance practices.

Historical Short Copper Trade by Tiger Fund

-1.52%current return

"So Robertson observed that copper prices were continuing to climb, even though demand was not increasing and actually might have started to decrease. Then the hammer dropped when a major copper trader dumped his position, driving prices down to about $0.87 per pound by late 1996."

Tiger Fund initiated and then increased a short position on copper based on a clear supply-demand disconnect. Despite initial price rises, fundamental inventory data and on-the-ground checks indicated an eventual correction. The trade produced $300 million in a single day and serves as a classic example of exploiting mispricing in commodity markets.

NVIDIA Speed of Light Principle and Production Innovation

+2.63%current return

"I want to know the speed of light. I want to know absolutely the best you can possibly do in whatever the cost is. I don care. Just tell me that number."

The speakers discuss Jensen Huang s approach of demanding vendor estimates that mirror the theoretical fastest production speeds—termed as the "speed of light principle." This method forces suppliers to reveal the absolute best performance figures, thereby allowing NVIDIA to optimize production schedules, reduce cycle times from annual to semi-annual launches, and maintain technological leadership. Such operational rigor is viewed as a key competitive advantage.

NVIDIA Strategic Pivot to Fuel the AI Revolution

+2.63%current return

"And at the bottom of that funnel is NVIDIA, right? Like NVIDIA is literally harvesting any type of revenue that is hitting any of these AI companies. And it shouldn;t be any surprise as to like why the market cap is in the trillions of dollars."

The speakers highlight how NVIDIA transformed its business from a gaming graphics company into a pivotal player in the AI revolution by creating its CUDA platform. This strategic pivot enabled broader applications of its GPUs beyond gaming, generating a sticky ecosystem among researchers and developers. The discussion emphasizes NVIDIA s ability to innovate, pivot quickly from niche gaming applications to broader market opportunities, and ultimately shape the future of tech.

Aritzia as a Core Quality Business and Long-Term Hold

+0.66%current return

"But one stock I do own that I've owned the longest and has been a major winner for me is Aritzia. And it's a business where, you know, over the last year or so, I've constantly wondered if I need to sell just because the returns are definitely pulled forward, but it just doesn't quite get to that five plus year mark. So I end up holding it..."

Kyle Grieve highlights Aritzia as a standout quality holding in his portfolio. Despite periodic concerns about valuation being pushed forward, he remains committed to the stock due to its strong fundamentals, sustained earnings growth, and its capacity to compound over the long term. His approach emphasizes adding to winners rather than engaging in frequent trading, reaffirming his business-owner mentality.

Axon Enterprise: Innovating in Law Enforcement Technology

-12.54%current return

"Axon Enterprise, formerly Taser, has transformed itself by integrating body cameras and cloud-based evidence management. There’s simply no clear competitor – no Pepsi to its Coke in the law enforcement technology space."

David Gardner highlights Axon Enterprise as a rule breaker stock with a unique competitive position in law enforcement technology. Transitioning from non-lethal weapons to offering body cameras and subscription-based cloud storage for video evidence, the company stands out in a market with few true rivals. This innovative positioning makes it a compelling long-term investment.

Intuitive Surgical: Dominant Force in Robotic Surgery

+2.56%current return

"If Tiger were a stock, I'd still be holding it. Intuitive Surgical, with its groundbreaking DaVinci surgical robot, has no clear competitor – there's simply no Pepsi to its Coke."

David Gardner identifies Intuitive Surgical as a rule breaker stock with a sustainable, dominant competitive advantage in the field of robot-assisted surgery. He emphasizes its unique market position, comparing it to the 'Coca-Cola' of its industry, and highlights its long-term potential for multibagger returns.

NVIDIA: Letting Winners Run Through Volatility

+3.92%current return

"When NVIDIA went from a four-bagger to an 80% drop in 2008 and even lost two-thirds of its value in 2022, it was a grim reminder that even the greatest stocks have rollercoaster rides. But the long-term story still made it the best stock of the last 20 years."

David Gardner recounts the dramatic journey of NVIDIA, emphasizing that despite severe drawdowns—over 80% in 2008 and 60% in 2022—the stock eventually recovered to deliver extraordinary long-term returns (reportedly up to 1300x). This underscores his principle of letting winners run and staying invested through market volatility.

Bath & Body Works (BBWI): Undervalued Retail Opportunity

-8.31%current return

"My pick is called Bath and Body Works. The ticker is BBWI. The stock price is $28 and analysts are targeting somewhere around $41 to $45, which represents a 50% to 60% upside."

Toby presents Bath & Body Works (ticker BBWI) as a compelling retail investment. Trading at around $28, the stock offers a robust free cash flow yield (approximately 12%), strong member loyalty (80% of sales), and aggressive share buybacks. With analyst targets in the $41-$45 range, the upside potential is assessed at 50% to 60% over a 2-to-5-year horizon.

Merck: Long-Term Value Amid Patent Headwinds

+3.29%current return

"My pick today is Merck... it is one of the cheapest now among all the big pharmas... holding this stock for the next five years will help us earn the dividends of 4% while potentially delivering a 15% internal rate of return."

Hari pitches Merck (assumed ticker MRK) as an undervalued pharmaceutical with strong oncology leadership via its blockbuster drug Keytruda. Despite the upcoming patent expiry in 2028 and regulatory headwinds regarding drug pricing, Merck is trading at a lower PE relative to peers and offers a 4% dividend yield along with potential long-term IRR of around 15%.

Uber Position at $91 with Long-Term Growth Thesis

+3.36%current return

"I probably would take a position, a 1% position here at today's price of $91. I strongly believe that this is a double digit compounder over the next decade."

Stig outlines an actionable trade for Uber, suggesting a small initial position at $91, based on his conviction that the stock can compound at double digits over the next decade. With the company already at a large market cap and unique growth drivers, he believes Uber (assumed ticker UBER) is positioned for significant appreciation if it reaches a trillion-dollar market cap.

Long Remitly on Discounted Valuation

"Yeah, it's trading under three times revenue. And I think that it's a company that has really not reached its potential profitability-wise. Even in that situation, you have a forward P.E. of close to 20. This asset should be trading at north of 5X sales, and it's trading right around 3."

Remitly is being highlighted as an attractive long-term stock due to its undervalued trading metrics. With the stock trading at under 3X revenue and a forward P.E. near 20, its current valuation is seen as a significant discount relative to its potential, especially if revenue growth continues at 30%+ per year. The analyst believes that, given robust digital remittance tailwinds and a superior digital solution compared to legacy players, Remitly is set to gain market share and deliver substantial returns.