Ankur Crawford Call Transcript


Ankur Crawford (continued): Oftentimes what I am doing is looking at each of these businesses and saying, “Where do I think that the risk reward for either a Wayfair or a Qualcomm or a TSM–where is that risk reward compelling? And where is it full?” I’ll give you a great example. We bought Shopify during the crisis. At some point, the stock had gotten to like $380 or something and had fallen apart. And we bought Shopify. The stock proceeded to go to $1,200. And we trimmed it because we thought that the growth for the next few years was being fully kind of baked in given our numbers at the time. And recently, it came down 25 percent. They did an offering. The stock went down to as low as 850: from 13-something to 850. We’ve set an opportunity to take the position back up. Speaker Question: I understand. Do you do it over a course of a couple of days? Or do you basically just say, “Listen. Regardless of the price the streets are thinking of on Shopify, we think that the stock is more than appropriately priced. And if it goes down more, that’s OK. We just buy it all in one day.” Ankur Crawford: No. I usually pare in a little bit. I usually don’t ramp the position up all in one day because it could keep going down. I want to be able to get the position on at a price that is good for our clients. I’ll give you an example of when we bought Qualcom. I didn’t pare into that because that was an event that made it very clear what was going on. Also, when I started buying TSM, I was more aggressive at that buy. There was an event that changed the dynamic of how I thought the stock would trade versus these one offs, the market selling off. For businesses that we think have duration, it gives us the ability to buy into that kind of pullback when other people are scared.

a bigger position in Tesla. Tesla kind of meets the criteria of everything that I was just talking about. It is driving an entirely different kind of industry where it is shepherding in the change in the auto industry and is so many years beyond its competition that it has a definitive first move. That’s the auto portion of their business. I also think about what is going on in battery, what is going on in other kind of light vehicles, what is going on in buses. That is an opportunity that we haven’t really even tapped into. They had a battery day and had been highlighting how big the opportunity for them can be. You know they think their revenue opportunity is tens of billions. I think this is one of those businesses that has several levers of growth in it, and some of which we haven’t fully contemplated, so it’s a really dynamic, interesting business. What has held us back historically has been a few red flags on the governance aspect, for example, for Tesla. There was a period of time when I think three or four of the board members just picked up and left. That has given us a bit of pause because we want to make sure that the stewards of the capital in the businesses that we’re investing in are doing the right thing and have the right governance structure.

But it’s truly a remarkable company. Elon Musk is, I might venture to say, a genius and a visionary at least.

Speaker Question: Do you think at some point in the future you would potentially increase your position in Tesla?

Ankur Crawford: Yes. If it pulls in and the risk reward looks favorable, of course we will. We’ll do what we think will give us the best returns.

Dennis Hearns: I have one question that was emailed to me. Can you talk about how research has changed now that we’re work from home? Are you and your analysts getting more access? Is management getting better at providing information? Is working from home allowing for more or less effective analysis of companies?

Speaker Question: Want to get your opinion on what you think of Tesla.

Ankur Crawford: When I look back at the mistakes I’ve made, one mistake that I made this year was not having

Conference Call 8/11

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