Django Davidson is a fund manager at Hosking Partners. We discuss the nuances of capital cycle investing, the role of human behaviour in amplifying cycles, and Django’s thoughts on the unprecedented capital cycle we are currently living through.

Show notes:

[01:03] Django discusses his early career

[03:32] Formative lessons from the GFC

[05:20] The importance of independent thought

[07:44] The capital cycle framework

[09:23] How valuations and profits impact human agents

[12:38] The impact of interest rates on capital cycles

[15:09] Does the capital cycle framework work everywhere?

[17:44] Japan’s improving returns

[19:50] The importance of people and capital allocation

[21:19] The advantages of broad diversification

[23:57] Timing capital cycles and the risk of terminal decline

[27:51] Portfolio themes

[29:17] Navigating an extraordinary memory cycle

[33:02] The hyperscalers are in a race

[36:24] Views on growing AI demand

[39:11] Undersupply in mining and energy

[42:45] Death of the brand

[47:04] Stay broad and focus on business and industry analysis

James Davolos is a portfolio manager at Horizon Kinetics, a US-based asset manager with a distinctive and long-term investment approach. We discuss James' evolution as an investor, how the investment and inflation backdrop is changing, and the merits of capital-light, real asset businesses.

Show notes:

[01:48] James discusses how he got into investing

[04:18] The formative years

[06:29] The importance of having a good mentor

[08:47] Horizon Kinetics' core principles

[11:24] Going off the beaten path

[14:15] Capital-light, real asset businesses

[21:51] Structurally higher inflation

[26:30] Localised vs broad inflation

[30:11] LandBridge and Miami International

[36:19] Optionality

[40:00] The best time to be a royalty company is in a bear market

[43:29] Risks to be aware of

[46:26] Focus on what matters

Alastair Unwin is a fund manager on Polar Capital’s Technology team. We discuss Alastair’s career as a technology investor, AI’s exponential curve of improvement and potential as a general purpose technology, as well as the issues that investors should consider as ever more capital is spent to realise AI’s promise.

Show notes:

[01:33] Alastair discusses how he got into investing

[03:14] Lessons from Herald, Neptune and Polar

[05:05] Heuristics for technology investing

[07:29] AI scaling laws

[10:10] AI bottlenecks

[13:45] Capital formation and AI’s new infrastructure

[17:42] A hardware cycle

[19:37] Motivations for increasing capex

[25:08] Capex in the context of improving models and the global wage bill

[28:49] Increasing circularity of AI financing

[31:14] Is it winner takes all or will models be commoditised?

[33:34] Nvidia and the depreciable life of chips

[37:52] Hyperscalers’ ability to win in the new paradigm

[40:32] Alphabet’s prospects

[44:21] Adoption rates and use cases

[49:03] Sitting with ambiguity and not being dogmatically convicted