00:00 Speaker A
year to date, bit disappointing because we’re not seeing any outsized gains. Microsoft and Tesla down 20% plus, 23%. So, which ones do you like?
00:13 Speaker B
Microsoft and Google offer strong risk-adjusted returns. Um, we think a lot about the price you pay for the risk that you’re taking. And really the others in the MAG 7 are way too pricey for a value investor such as ourselves.
00:36 Speaker A
So, is this a valuation call itself on these two stocks, Microsoft and Alphabet? Um, what’s what specifically about these companies do you like?
00:48 Speaker B
We don’t have a valuation call per se. We look for businesses that we want to own for the long run. And Microsoft is dominant across all of its major business segments and they have strong executive leadership and they just continue to innovate. And then Alphabet is a, it’s like a core, like their scientific ethos, it’s like none other. Their Deep Mind team, before we even heard about them and before any of us could spell AI, um, they’ve been AI leaders and they’ve been innovating from a science perspective perspective at the company since its very early founding days. They also have a a culture of delighting uh users. Remember the predictive tech text that we all tried out when Google search was very new on the market. Yes. And then you get, you know, sort of hidden assets if you will, with Google as well, like YouTube and Waymo. and you’ve got an opportunity to have um lots of ways to unlock value um with a name like Alphabet as well.
02:00 Speaker A
We’ve seen a number of different faces, uh not only at the helm of Microsoft, but maybe for the company itself. It’s really gone through some evolution from the PC office era into the modern cloud era. What do you see on the future on the horizon for them?
02:18 Speaker B
I mean once upon a time, Mark Microsoft was, you know, a company that shipped software with PCs loaded on it. I mean it was a these were early days with Microsoft and what we see with the with the company, kind of fast forward today and they’re a leader in in cloud. When we invested with them, before there was no cloud business and now Azure is one of the dominant players in their space. and uh and and we just see lots of room for upside.