The Sunday Times had an article around tracking other people investments and specifically the Nancy Pelosi tracker on Autopilot.
It actually isn’t following Nancy’s investment it’s actually following her husband’s Paul investments.
It had some interesting references to being US centric in the portfolio. It also talked a lot about a “tech” bubble or correction.
For reference, I was right in the middle of the dot-com boom and bust. I lived in Palo Alto from around 1997 to 2001.
There are distinct differences in valuation metrics between tech then and tech now. Firstly most of the dot-com cohort didn’t have products, profits or predictability which made metrics difficult to track.
It was also linked to new companies. These companies were going to disrupt the sector. They were expected to kill all of the old companies (think Netscape v Microsoft). Now the large companies are still the ones disrupting. They have large amounts of capital. They also have access to capital to disrupt.
Also let’s get to financial metrics. Meta, for example, is trading on a PE of 30. It made $53b of free cash flow in 2024, up from $44b a year earlier.
There is an expectation of correction or adjustment in the equity markets. This has been the case since the beginning of time. So let’s say we sell all of my Meta shares on Monday. Where do I put the money to get similar FCF growth?
Taxi drivers in Silicon Valley mortgaged properties to invest in tech businesses during the dot-com boom. They now seem more likely to invest in crypto than in large tech.
So back to Pelosi, they are tech and US heavy like the S&P500. I am not sure there is an hedge here.
However, I see a hedge against tech as something that I need to consider over the next 10 years. No rush!
Kevin Dorren 