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Last edited 2 months ago

An ETF with some of the largest technology companies in the world. 

The constituents:

  • Tesla (The renewable energy + transport company) with future growth in their Energy business and Autonomus business (that is if you believe in management to execute for the next 10 years) 
  • Baidu (The Google of China that have plans to build the autonomous driving tech in China)
  • Twitter (Not the best social media company but the utility is valuable for politicians, businesses and entreprenuers to send their message) 
    • The catalyst would be the integration with Square's cash app to monetise users in some form of payment ecosystem. 
    • Prone to regulation especially when they deplatorm high profile people it leads to backlash. So they will face some form of regulation. 
  • Alphabet 
    • If you believe Google will maintain their monopoly with lobbying efforts and become the global brain of the world. 
    • They have other projects but Deepmind is the most advanced. That project is the most promising in AI especially for healthcare (predicting protein folding) will transform medicine.
      • Alphazero is the most advanced AI in the world at 2 player closed games. I used to play chess against stockfish and the way it beat me was through calculation. However Alphazero plays like a human + it can calculate. Virtually impossible for a computer to beat Alphazero. 
    • Waymo - I don't see it scaling despite having good AI algorithms. 
  • Nvidia 
    • Supply chips to many customers. Apparently customers find the cost is increasing and they are switching to other chip suppliers. 
  • Apple 
    • They can maintain their valuation if people are willing to buy iPhones. 
    • Apple is a cash machine generating $40B a cash every quarter, even after paying dividends to investors. 
    • They should have bought Tesla but are rumored to develop an iCar (wheels come seperately of course :P). Tesla has ate their lunch and had their Steve Jobs iphone moment with Battery Day showing how Tesla will drive down cost and scale battery production.   
  • Amazon (Jeff who?) 
    • Bezos stepped down as CEO but he is the executive chairman so he has a lot of say on the vision. 
    • They are a monopoly driving down logistics cost and maintain scale. 
    • Invested into EV space to decarbonise their fleet with Zoox and Rivian 
  • Alibaba 
    • Largest ecommerce platform in China with very strong network effects. 
    • They have problems with regulatory authorities in China. However, they are soo large it is hard to see them go down. 
  • Netflix 
    • We all use this streaming platform. They are investing heavily for local content creation. More people are watching Netflix than cable tv. 
    • They face intense competition with Disney+ who are the entertainment juggernauts. 
  • Facebook 
    • If Google & Baidu is the world's brain then Facebook/Wechat/Twitter is the world's voice. Facebook in particular have the most users. 
    • They will face intense regulation and maybe forced to split.

I find it very hard to see these businesses going out of business in this decade (maybe Nvidia). FANG to me is a good long term ETF. Even though all of them are unethical to some degree, but they are the leading businesses of the world. It is highly concentrated and more volatile compared to the Nasdaq 100 ETF, but that's where you could get outperformance. 

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