Reflecting on 2022, investment themes and the next iteration of The Long Game

Reflections on the first year of writing

“All of life’s great returns come from compound interest. Whether you are compounding money, relationships, or skills, time is your greatest force multiplier,”

I created my Substack in January, but started posting in earnest April before taking a break for the last few months as work travel ramped up. I’m proud of the product, but even more proud of the quality of the subscriber base. Without naming any names, there are a few folks from institutions I admire deeply who are highly engaged subscribers - that’s pretty cool for an anonymous writer.

Since April, this publication has grown from 3 subscribers (me, my wife and a friend - so really 0 subscribers) to over 700 subscribers. Twitter and Substack recommendations have driven the majority of my subscriber growth. Being anonymous has made growth harder to come by. I feel confident I could quite easily double my subscriber count if shared this within my professional circle. I choose to write under a pseudonym so people are only able to judge this publication by the quality of my content and not my background.

Since April, this Substack has had 14 posts which include 5 investment notes / company deep dives, 7 monthly wraps and 2 other pieces. Not as consistent as I’d like, but I feel good about the quality of posts. To date, my first set of investment notes on Spotify has been the most popular piece.

Open rates have consistently been above 50% and have approached ~60% for my company investment notes. For someone who is not a natural writer, the process of distilling an investment thesis to ~2000 words has been challenging, but a worthwhile process.

I’ve also toyed with the idea of a rebrand, but the more I think of the philosphy of playing “The Long Game”, the more convinced I am that it’s the right title for this publication. Playing the long game is a reasonably simple concept where every decision made is designed to optimise for the long term result. While this approach may not yield immediate results, overtime these small acts compound over time to create a outcome that is order of magnitudes larger than any other approach. I am firmly of the view instant gratification cannot build a legacy. Playing the long game is critically important for the way I want to invest, and more importantly, how I want to live my life. So The Long Game is here to stay.

Thanks for reading The Long Game! I’m thrilled that this newsletter has found its way into the inbox of analysts from some of the most well known hedge funds in the world. Subscribe for free to receive new posts and support my work.

Investment themes to be explored for 2023 - Trying to find the next generation of durable compounders

I’m fortunate enough that I have a job that I love. I get to talk to some of the smartest investors in the world on a daily basis, often in their offices. I’ve spent the last 3 months travelling the US and Asia, and these a few of ideas I collected from my discussions with various investors (special sits, venture, buyout and public investors). Admittedly, I haven’t done any deep work to test the validity of these, but they do form a good starting point to where I plan on focussing my energy in 2023.

• Sustainability and stakeholder capitalism will be core to becoming an enduring company - sustainability is a term that seems to be coming up more frequently in earnings calls and annual reports. It’s a topical point, given the climate crisis we are all in. I truly believe the next generation of great companies will need to be more holistic in their approach to value than perhaps what we have seen historically. Consumers (including myself) are also starting to consider the impact of their own actions and purchasing decisions, which I think will result in a new generation of consumer company. One example that comes to mind (despite a horrific start in the public markets) is Allbirds (BIRD 0.00%↑) , a company that has literally reimagined the shoe to make it more sustainable and environmentally friendly.

• Considering the relative value of the number 2 player in large markets - I was previously an investor in CrowdStrike ( CRWD 0.00%↑ )and have also spent a significant amount of time looking at the NoSQL database market, where MongoDB ( MDB 0.00%↑) is the clear market leader. Both are great companies, serving very large end markets. These two companies dominate investor mindshare given their scale and growth rates. They also trade at substantially higher valuations than the number 2 player in their respective markets. SentinelOne (S 0.00%↑) , for example, trades at half the multiple of CRWD 0.00%↑ but is growing twice as quickly (admittedly with worse unit economics). Couchbase (BASE 0.00%↑), another example, competes with MDB 0.00%↑ , and trades at ~2x revenues (but growing much slower, with a less efficient sales motion). The point is the relative value here could be interesting. Again, the thesis is early, so it may amount to nothing, but one I think is worth exploring.

• The power of the platform and under appreciated network effects- I have written extensively about SPOT 0.00%↑ and CVT 0.00%↑ this year. In my opinion, both are companies that fit this theme. GOOG 0.00%↑, AMZN 0.00%↑ and META 0.00%↑ are examples of what happens when the platform and corresponding network effects compound. There are three additional companies, SQ 0.00%↑, NET 0.00%↑ and HUBS 0.00%↑ that I am spending time on which I think could also be interesting and fit this thematic. More to come on those in 2023.

• Dislocation in public markets has created opportunities to own high quality companies at attractive prices - This one goes without saying, but the current market conditions has resulted in a number of high quality companies trading at compelling valuations. SPLK 0.00%↑ , which I have written about previously, is one example I expect to own during 2023.

• The US healthcare system is broken and needs to radically change - this is something I have recently started to spend a bit of time on. Given the total cost and inefficiencies in the US healthcare system there is clearly a need for a shift away from fee for service to fee for patient outcomes (i.e. value based care). I also have a thesis in the US that care is going to be taken out of the hospital settings into the Home, OBL’s and ASC’s. More on this next year.

The next iteration of The Long Game - what this publication will look in December 2023

My hope is that in 2023, The Long Game will be known for its constancy and high quality content (per the goals below). I plan on doing some research into specific areas of interest (i.e. US healthcare) which I may turn into some longer form pieces. The introduction of quarterly investor letters are likely to occur at some point during 2023. I didn’t invest at all this year, but expect to start iniating positions during the course of 2023. The investors letters are for my own benefit of journaling my process, and tracking my results. I plan on writing a longer post on how the pseudo hedge fund (i.e. how I invest my own capital) is going to operate and will include such topics including investment strategy, performance reporting and other relevant su early next year.

Finally while I have decided against a rebrand, at some point I’d like to professionalise this newsletter with better graphics and charts.

Goals for 2023

For the first time, I have decided to publicly list my goals for 2023. These will hopefully keep my accountable, and I can revisit this in 12 months, and assess how I went.

The Long Game

• One monthly company or industry deep dive to be released mid month (on or around the 15th)

• Continuation of monthly wraps for now. I had initially thought about scrapping these but the monthly wrap serves 2 purposes:

  • Allows me to keep track of interesting things I read, watch or listen to. Also keeps me accountable to make sure I spend time daily on focussed reading

  • Helps me build my writing muscle

• Getting to 1500 subscribers (a little over 2x current subscriber base)

• Quarterly investor letters / portfolio updates once I start to invest

Personal

• Read 6 books (1 every 2 months)

• Run a sub 2 hour half marathon

• Lose 10kg

• (Restart) meditating - initial goal is 10 minutes a day

• Relationship goals (which I won’t share here)

• Financial and investing goals (which I won’t share here)

Thank you

I’ve met some wonderful people as a result of writing this Substack - literally all over the world. From coffee catch ups in New York and Singapore to Brunch in Boston, it’s been great to connect with some unbelievably smart folks.

Finally, cheers to over 700 of you who subscribe to this publication. I’m grateful for the support.

Stay patient, focussed and rational.

TLG

Keen to read a bit more, you might enjoy:

• Cvent (potentially) a quiet compounder in the making

• Investment notes: Splunk - analogies to Adobe and Microsoft

• Investment notes - GoPro: "I'd love to answer that, but Brian would kick me..."

• Charlie Munger: "I wouldn't want any one of them to marry into my family."

• Investment notes – Spotify ($SPOT)