Kelly Granat
speaker
261 appearances
1 recordings
1 series
first heard Mar 2025
last heard Mar 2025
Kelly Granat’s voice in public audio — every appearance, attributed to the second.
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We rarely would do that. but we might be positioned differently. And I think the other thing I should have mentioned earlier in terms of just the difference of today versus before is, and this comes through at the portfolio level, is we are definitely running lower gross exposure as a firm than we did for the first probably 15 to 17 years of our existence as in deference to this dynamic, right?
So we want room to be adding to things when we think there are non-fundamental reactions that don't make sense or overreactions to things that we think aren't that big a deal, right? And so for the first bunch of years of our existence, we ran more like 170 by 200 gross.
And we've been consistently for the last six to eight years, we've been running more kind of 150 by 180 gross to give ourselves that room to breathe so that we can not have to play defense at the wrong time. And I can actually lean in when everyone's leaning out and vice versa.
It makes us kind of giddy. Can I geek out for a second? Yeah, please. Why, when I think about why did I get into this field in the first place, I think there's two sort of defining characteristics that I have that position me well to do this job. One is that I'm a wildly competitive human being. I was a junior tennis player for my entire junior career before going to college. I played in college.
I love to compete. I love a scorecard, right? That's just who I am as a human. Mm-hmm. The second is that I'm an incredibly curious person who is very focused on growth, and growth in lots of ways. I mean, growth in terms of learning about new things, challenging myself. I play instruments. There's lots of things I'm interested in as a human.
And I feel so lucky to have found a career where I get to actually learn a lot and then put that knowledge to the test by measurement, right? We can put capital behind those learnings and those insights and see if we're right, because there's a weighing mechanism every day, right, that gives us a scorecard.
So for me, the opportunity to do that at scale on a topic that is, I think, transformational, not just for the markets, but for society, is just intoxicating, honestly, as a notion, as a concept. And the fact that we can do tremendous amount of fundamental research and also have the flexibility, the capital base, the nimbleness to evolve our views as we learn is incredibly interesting.
It's also really fun as a manager to have a team of incredibly talented people who are both just professionally and personally engaged in this topic.
And so the amount of trial and error and the amount of testing that's going on on the weekends by our analysts who are downloading all these products and sharing through to the email distribution system their learnings to help inform how we're thinking about just what's happening, because things are changing so quickly and there's so much dynamism around this topic, is incredibly interesting, right?
And so our... The flip side of that is, you know, I've seen a lot of bubbles in my career. And so there's the appropriate amount of skepticism around where will the profit pools evolve? And that's an ongoing live conversation inside of our firm.
And everyone's got different opinions and over what time frame and where is their fake AI and where is their real AI and where is the value ultimately going to be created and harvested and realized? And so we debate that constantly. And I would tell you that we think different things today than we thought three months ago, six months ago and 12 months ago.
And they will be different, I can assure you, from what we will think in three months, six months, 12 months. And so that level of change and dynamism just as an investor is is gold. I mean, that's why we do this. Right.
I mean, you've had people on this podcast who are far more informed on this topic. So I feel humbled by even attempting to answer the question. But I would say at a high level,
Obviously, we have been of the view or questioning of the view from the beginning, I would say just stepping back, that LLMs would not be where the value was ultimately probably largely created and that the fact that there are six, seven, eight of these today would likely consolidate over time down to a few.
And so our view going back really from the beginning was that probably most of the value would be created at the application layer, right? And so that's part of why we have such a large position in meta and have for the last bunch of years as we feel like that's the... most real-life example at scale of commercializing a lot of the capabilities in core products today.
And you can see it kind of in their results and they're talking to you about it when they speak on their calls and so forth. However, there aren't a lot of opportunities yet to realize that in the public markets. I think a lot of those businesses are first probably being funded in the private markets right now or in the last handful of years.
in the same way that when the mobile transition happened and the iPhone came out, the Spotify's and Shopify's and DoorDash's and all these amazing companies that came out of that generation of startups came after, right? And so those generations of cohorts of companies I'm sure are being formed and have been formed in the last couple of years.
don't invest typically at that stage in the private market and certainly many of them are not public yet. And so our positioning has been more really around picks and shovels with the view that like, let's see how the ecosystem evolves. Let's see where profit pools are going to be created over time. But in the meantime, what we do know is that
There are constraints, and those constraints are shifting, obviously. They started on the SEMI side. Now it's more on the power side. The next piece, we'll see where that goes to.
And so that's more what we're tracking, right, in terms of where are the constraints, where are the profit pools being generated that we believe are sustainable that are not a function of supply-demand dislocation, and then how do we want to be positioned behind those, right? And so that's the framework that we've kind of used, and obviously we're doing...
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