Issue No. 10: The Rate of Change for Change is Accelerating (Google & OpenAI)
Thoughts on selling my shares in $GOOG
‘We feel change is likely to work against us. We do not have great ability to predict where change is going to lead…
If you’re going to bet on somebody to see out and do what we can’t do ourselves… but I don’t want to bet on anybody else. In the end we want to see where a business is going ourselves… In Wall Street they love to tell you how a business is going to change a lot, and they say that is a great opportunity. They don’t think it’s a great opportunity when Wall Street is going to change a lot.
Why go around betting on things we don’t know when we can bet on simple things.’
Warren Buffett - 1996 Berkshire Hathaway Annual Meeting
After initially making a defence of Alphabet’s search position in response to the fanfare surrounding ChatGPT 3’s launch late last year, I have sold my shares. I originally had made an investment in the company during the March 2020 Covid sell-off, and added some shares later that same year.
At the time my understanding of Alphabet’s core search and video sharing properties were that these were indispensable utilities with respect to digital media growth. It was hard to see how change could be brought to the essence of this core search offering. After all, it is vertically integrated in devices, browsers, increasingly in the cloud, and enjoys a cognitive referent status augmented by a level of branding. YouTube enjoys a similar position, and again, accrues value as it scales. The associated digital advertising businesses are likewise high quality, and the value proposition they provide far exceeds the taxes they derive from operating it.
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