Henry Ellenbogen explains why his investment philosophy at Durable Capital heavily emphasizes small-cap public and late-stage private companies.
Assertion Not checkable as stated
Quants and short-horizon platforms drive 80% to 90% of institutional market flow
“We estimate somewhere between 80 and 90% of the institutional flow is basically driven either by the firms that have one month and three month agency or the quants that have to take these price signals into account, and then their models are optimized for this…”
Prediction Not checkable as stated
AI will probably be more impactful than the internet was
“Think it probably is more impactful than the internet was. It's not only gonna affect obviously every technology company, which, you know, you see in the markets, but it's also Going to impact in this case, I think almost every company that, you know, needs wh…”
Prediction Not checkable as stated
Robotics costs will likely drop 15% to 20% annually due to scale
“And the cost on the existing use cases probably don't go down at three to five percent at this point in the curve because of the scale brought in, the human capital brought in, the IP bought on, and the fact that you're going to be able to use these general pu…”
Assertion Supported
Only 1% of public stocks compound at 20% over 10 years
“The philosophy we have today is predicated that over a rolling 10 year period, you have about 40 stocks that compound wealth of 20% a year or go up a little bit over six X. So about one percent of the stock market is the, are the valedictorians.”
Insight
Physical businesses that successfully adopt tech often make the best stocks
“And often those are the best stocks when you go study the markets because you're already in a physical world business where the technology advantage transitions into a physical mode advantage or a distribution or scale advantage.”
Opinion
Colliers is an asset manager, not a cyclical commercial real estate brokerage
“The asset quality of Collier's is not the quality of a commercial real estate. Firm that's cyclical. It's actually a really good real estate asset manager and a emerging really strong consulting firm.”