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🗞 The Best Investor That No One Talks About

The world's most selective fund manager bought a new stock for the first time in 3 years.

Written by: Ryan Henderson & Braden Dennis

Happy Sunday!

Here’s what’s on the docket for this week’s newsletter:

  • 📊 The Most Insane Charts of 2024

  • 🔈️ Introducing A.U.M.

  • 💼 The Best Investor That No One Talks About

Let’s dive in!

Charts from Custom Metrics

2024 was a wild year.

From soaring equity markets to billion dollar meme coins, a lot happened in 2024.

So as Q4 earnings officially come to a close, we’re taking a trip down memory lane.

Here are some of the wildest charts from this year:

Excitement around the data fusion company Palantir ballooned in 2024.

So much so, that to kick off this year, Palantir nearly surpassed Salesforce to become the world’s most valuable SaaS company.

That’s particularly astounding considering Palantir generates just 7.5% of the revenue that Salesforce generates.

Due to heightened competition in the energy drink sector, Monster Beverage’s competitive position was called into question in 2024.

In response, Monster’s management team let shareholders know exactly where they stood on the long-term potential for the business.

This year, the energy drink giant repurchased $3.8 billion in stock, with the bulk of those buybacks coming through a one-time dutch auction tender offer. That’s nearly 6x as much as they spent on buybacks in 2023.

After dropping nearly 90% from its all-time highs in 2023, MicroStrategy shareholders experienced a major rebound thanks to the meteoric rise in the price of Bitcoin.

Thanks to a dose of leverage and soaring Bitcoin prices, the value of MicroStrategy's Bitcoin holdings reached ~$42 billion, a 5x increase from just 12 months prior.

  1. Big Tech - Capital Expenditures

As the proliferation of AI increased the need for more computing power in 2024, the big tech giants grew their CapEx at a rapid pace.

Together Amazon, Alphabet, Meta, and Microsoft spent $228 billion on capital expenditures, which was a 55% increase from the same period a year prior.

By the start of 2025, AppLovin's market cap had increased by more than 4,000% over just a 2 year timeframe.

That means AppLovin went from a small-cap stock to a near mega-cap stock in 24 months.

FinChat Update

Launching A.U.M.

This week, FinChat officially launched its first ever podcast, A.U.M.

A.U.M. includes weekly conversations with exceptional asset managers from all around the globe. Each discussion dives into the process, strategy, methods, and lessons from their respective investing careers.

Featured Story

The Best Investor You’ve Never Heard Of

Earlier this month, one of the most selective hedge fund managers of all time purchased his first new position in nearly 3 years. Before examining the business he bought, let’s give some background on who this relatively unknown figure is.

If you Google the name Norbert Lou, you won’t find any pictures, you won’t find interviews (except for single written interview from 2011), and you won’t find investor letters.

But over the last 30 years Norbert Lou has crushed the market.

Here’s how the founder of Punch Card Capital outperformed while owning very few stocks:

Lou started his career as an analyst at Brown Brothers Harriman and from the beginning his analytical abilities were obvious. Here’s what one partner had to say:

"In my opinion, he was the go-to analyst. If you had a tough project, you wanted Norbert on the team.”

Following Brown Brothers Harriman, Lou accepted an offer to work for the prestigious activist investment firm Elliott Management. While the company generated great returns during Lou’s time there, he quickly realized that the activist style wasn’t for him.

Instead, Lou preferred to search for companies where he could sit by passively and watch the business generate extraordinary returns on capital without the need for investor involvement.

Insert NVR. 

NVR was a homebuilder that was forced into bankruptcy in 1992. However, after emerging from Chapter 11, the company introduced a unique strategy to the homebuilding industry.

Instead of purchasing plots of land outright, NVR would buy "options" on the land. This kept the inventory off of NVR's balance sheet (which helped in tough times), and enabled them to expand quicker.

Ironically, Lou found NVR because the company announced a large buyback program. However, with their new asset-light strategy, he quickly discovered that the company had much better uses for its capital.

Lou made NVR 35% of his portfolio at roughly $23/share and within a decade he netted himself more than a 30-bagger.

While managing his own money, Lou applied to a members-only online forum called Value Investors Club (VIC) under the anonymous handle “Charlie479”.

Lou was quickly accepted and his write-ups were actually so good that one of the founders of VIC Joel Greenblatt, began using them as samples for his students at Columbia Business School.

"To this day, I hand out the first 3 write-ups he wrote on the Value Investors Club to my students at Columbia"

After a few more impressive write-ups, Joel Greenblatt actually invited Lou to meet him in person and convinced him to start a fund of his own with backing from his own firm Gotham Asset Management.

So in 2004, Lou launched Punch Card Capital which he still runs today.

Returns:

While we don’t have Punch Card’s full audited returns, it is reported that from 1994-2003 Lou generated 38.5% annualized returns in his personal account. And from 2004 to 2011, Punch Card Capital generated 14.5% per year net of fees, during a period when the S&P 500 earned just 2.2% annually.

Since 2011, there ‘s very little public information. But from looking at his holdings, we know that for the majority of the last decade Berkshire has accounted for ~50% of his portfolio. Over that time, Berkshire has outperformed the market.

Last month, all investors with more than $100 million in assets had to report their US listed holdings to the public.

Most of the time this means very little for Norbert Lou since he seldom buys or sells, but this quarter Lou introduced his first new position in nearly three years in Pinduoduo.

The Chinese e-commerce company behind the Temu platform has caught fire as of late, but given the aversion from many foreign investors to investing in China, the stock has gone virtually nowhere since 2021.

Meme of the week

It was reported this week that in April of last year Citigroup, the 4th largest bank in the US by deposits, nearly made two massive errors.

The first incident was that Citibank accidentally credited $81 trillion (yes, you read that right) to an account that was supposed to receive $280.

And the second incident, which was made in the same month, was a copy and paste error that almost credited $6 billion to an account.

While both of these incidents have now been resolved, two “accidental” transfers of this size might have people thinking that maybe they should open an account and test their own luck. And if that’s the case, it does make you wonder if this somehow could have been a “Nathan for You” type publicity stunt.