Can you outperform the market without its biggest, best-known names?
That is the self-imposed charge of with Kevin Landis, founder of Firsthand Funds. The firm’s Firsthand Technology Opportunities Fund (TEFQX) gained 102% over the past 12 months, which is impressive enough; But Landis accomplished this without many of the biggest market drivers of 2020: No Apple, Amazon, Tesla, or Netflix. The fund was created in 1999, and has gained 21.1% annually over the past 10 years vs 13.9% for the S&P500 and 18.5% for the Nasdaq Index.
Landis explains “You don’t need me to tell you to own Microsoft. What value do we add owning Apple, one of the most widely held stock in the world?” Instead, he sees his role as seeking out new technologies and business models that will shape the future of the economy generations hence. The key questions to be asked: “Just how big can this market become? How big is this opportunity? When a company is in the right place at the right time, on the right track, the question is: How high is up?”
He credits the advantage of being located in Silicon Valley – he is always seeing new ideas and entrepreneurs and start-ups in his backyard. He sits on several boards, and in order to invest in pre-IPO companies, he launched Firsthand Technology Value Fund (SVVC), a publicly-traded venture capital fund focusing on emerging technologies. The fund was a pre-IPO investor in companies like Facebook, Twitter, SolarCity, Yelp, and Roku.
A list of his favorite books are here; A transcript of our conversation is available here.
You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here.
Be sure to check out our Masters in Business next week with Ben Inker, head of Asset Allocation at GMO, which manages about $60 billion in assets. During Dotcom implosion, GMO’s US Aggressive Long/Short Strategy achieved 80+% cumulative net returns for their clients. Inker is widely regarded as founder Jeremy Grantham’s heir apparent.
