Assertion Not checkable as stated
Sundheim: Chinese tech firms avoided beating earnings to dodge scrutiny
“For a while we were seeing Chinese internet companies, like, they didn't want to beat earnings. Because if you beat earnings, your stock goes up too much. You know, you might be flagging that, like, you're over-earning”
Opinion
Sundheim: Nvidia is not expensive and public AI stocks aren't in a bubble
“I would tell you, like, NVIDIA is, we can have a debate about what the earnings are going to be in a few years but it's not expensive.
Like, NVIDIA trades at twenty-something times multiple.
that's, you know, I think within reason, and I don't think there's…”
Insight
Sundheim: The biggest investing mistakes come from selling great compounders too early
“The biggest mistakes are selling the Costco's too early, because you know, the IRR is totally dependent upon what you assume the exit multiple is, like, and that is difficult to be precise about, you know, what the right exit multiple is for a business.”
Insight
Sundheim: Private market illiquidity is a huge benefit for holding great companies
“That's the nice thing about the private markets is that Once you invest, you can't sell, and usually for the best companies, that's a huge benefit ultimately.”
Assertion Not checkable as stated
Sundheim: Hiring lateral portfolio managers from other funds almost never succeeds
“If I hire somebody laterally, who's a portfolio manager in another fund, that's rarely been successful, almost, almost never.”
Insight
Sundheim: Managing risk after a position moves destroys capital
“Risk management cannot happen after the fact. Like, anything you do after the fact is not risk management. It's actually just destroying capital. Risk management has to happen before the fact. Meaning, like, you size these positions so that, like, When it goes…”
Disclosure
Sundheim: D1 Capital does not use derivatives due to timeframe risk
“I don't use, I really don't use derivatives at all. The problem with derivatives is like, look, At the end of the day, when you break down, what is a derivative? It's just leverage and implied volatility. Like, if I want leverage, I can go, you know, get lever…”
Insight
Sundheim: US markets price turnaround stories far faster than Europe
“Like, the U.S. Is pretty quick at, like, seeing change happening, and then pricing in that change. In Europe, I find you know, once a company, like a company like Rolls had underperformed for so long, I guess that European mutual funds, they just kind of got i…”
Insight
Sundheim: Investors always make the most money from multiple expansion
“You're always gonna make the most money from multiple expansion. Just like it's hard to have that differentiated view on a company's growth rate.”
Prediction Not checkable as stated
Sundheim: Gas turbines will face shortages for a very long time
“I think that gas turbines are going to be in shortage for a very long time.”
Prediction Open · timeframe Oct 2045
Sundheim: US electricity demand will grow 4% annually over 20 years
“Electricity demand in the United States grew at zero percent for the last 20 years. And so, if you think about the next 20 years, I think electricity demand will grow at four percent.”
Assertion Supported
Sundheim: GE Vernova trades at 2x Siemens Energy's enterprise value
“G Renova trades at two x the enterprise value of Siemens energy, just to give you a sense of like, and ultimately, there's no reason why the margin should be higher at G Renova. The revenue base is the same.”
Prediction Not checkable as stated
Sundheim: AI market correction will hit when training returns asymptote
“At some point, they're going to say like, well, we're asymptoting out, like the returns on this new investment are actually not working. That's when I think you'll see a pretty big correction.”
Prediction Not checkable as stated
Sundheim: SpaceX will capture more global telecom market than expected
“And I think that will continue in a way that probably surprises people, in that like, I think SpaceX will probably capture more of the global,
Telecommunications market than people expect.”
Prediction Not checkable as stated
SpaceX can triple in value without relying on speculative new use cases
“Like, I look at it and say, like, I think the business can triple
Without having to make any big bets about people traveling 30 minutes across the world or, you know, data centers in space.”
Opinion
Sundheim: Elon Musk is an even better businessperson than inventor
“I think he's a better business person than he is inventor.
He's amazing at both, but like, people don't understand, like, he just naturally understands, like, just get the cost down, and that's very hard to compete against.”
Opinion
Sundheim: Premier private companies like Stripe should not go public
“I mean, if I ran a private company like Stripe, I wouldn't go public.”
Opinion
Public stock markets have become less efficient despite universal access to information
“It should be correctly priced because everyone has access to the same information. It's actually gotten less efficient over time, for sure.”
Disclosure
Sundheim: Over 90% to 95% of D1 trades are his own decisions
“90, 95% plus.”
Disclosure
Sundheim: D1 usually buys public stocks before finishing investment memos
“We're having to get to the memo stage, and usually we start buying it before, because in the public markets, you know, if you have a good idea, you could take a month and a half to, like, write a memo, but by that time, the price may have moved. So usually we …”
Insight
Sundheim: Private secondaries only offer easy liquidity for companies you shouldn't sell
“You can sell, like, the best companies you can sell easily, but those aren't the companies you want to sell. You know, it, it's, ah, we rarely transact in the secondary market because, you know, we don't want to sell the best companies, and it's hard, like peo…”
Disclosure
Sundheim: D1 Capital avoids hiring portfolio managers or public equity veterans
“One, we don't hire portfolio managers. I pretty much only hire people who've never done public equity before which has pros and cons.”
Disclosure
Sundheim: D1 analysts must submit weekly mock portfolios allocating capital
“We, yeah, we, everyone has like a, what we call a mock portfolio. So every week they have to take the positions they cover and they have to say, if I was managing capital, here's how I would allocate capital.”
Insight
Sundheim: Monthly and quarterly returns are arbitrary outputs of past decisions
“If you have a portfolio of things that you've built over time, our monthly returns and quarterly returns are purely an output. Like there's nothing, it's, it is arbitrary in some respects.”
Dan Sundheim