George Vanderheiden is one of the best investors I’ve ever known. He chose to retire in early 2000, massively underweight technology and massively overweight home builders, tobacco and other value oriented stocks. He had written “Tulip bulbs for sale” on the whiteboard outside his office and left a package of them underneath in late 1999.

2020, especially the end of it, has me thinking of George and what I have learned from listening to him over the years.

Manias often end at the end of a calendar year. To quote George via a New York Times article dated January 13…


Business travel is coming back for the same reason that suits always come back.

Suits are cyclical. Almost all offices go casual late in the cycle. Then the economy rolls over and a few months into the recession, someone shows up at the office wearing a suit because they are worried about their job. The next day everyone is wearing a suit.

Business travel will be the same. Every business will try to avoid travel and stay on Zoom. But then one company, struggling with sales, will send their sales representatives on the road and conversions will increase. The next quarter all of their competitors will be on the road. The same will go for conferences, for diligence, for deals, for executive retreats, for everything.

Business travel will come back.


I believe the biggest long term beneficiaries of Covid will prove to be category leading brick and mortar retailers. By this I simply mean brick and mortar retailers who have dominant share in a category — whether it be home improvement, general merchandise, electronics or any other retail category. Their destiny has likely changed forever. Many of the perceived Covid winners such as e-commerce, videogame and streaming media companies have simply been pulled a few years forward into a future that was inevitable. Their destiny did not change. The future for those businesses simply accelerated whereas the future for category…


Investing is a difficult, humbling pursuit. I am often asked about mistakes I have made. While the list of my mistakes is quite long, I thought I would write up my most recent mistake of commission, i.e. a mistake based on an action I took that resulted in a loss of capital as opposed to a mistake of omission that resulted in missing out on potential gains. I have been following semiconductors for 20 years and had never been bullish on Intel until June, 2020 when I bought the stock and made it a significant position for the first time…


The “Three-Body Problem” is a reference to Poincare’s 1889 work showing that there was no closed form solution for modeling three point masses (planets or moons) according to Newton’s laws of motion and universal gravitation as the resulting dynamic system is chaotic for most initial conditions. It is also a fantastic science fiction novel by Liu Cixin. The market faced a three-body problem in late February and now faces one again. Political risks, virus risks and economic risks are again converging.

In late February, the market faced the prospect of Bernie Sanders as the Democratic nominee, rising Covid-19 cases and…


Scale and loyalty are generally the most important metrics to me as an investor as they are the most sustainable — and measurable — competitive advantages. They are *much* more important online than offline, which is why the internet economy has such pronounced “winner take most” dynamics relative to the offline economy. Barriers to entry on the internet are low, but barriers to scale are high.

Scale and loyalty are more important online than offline primarily for four reasons. 1) The fact that “CAC is the new rent,” 2) the mechanics of how the Google and Facebook auctions work, 3)…


I recently had the pleasure of giving a talk to CSIMA, which is the Columbia Student Investment Management Association. Afterwards, they asked for a list of investing book recommendations. I thought I would post it here on Medium for the benefit of anyone who was interested. The list became quite long, so I italicized the ones that were most important to me.

Recommended reading order that I think builds knowledge in a logical way:

1) “One Up on Wall Street,” 2) “The Warren Buffett Way,” 3) basic accounting via “Why Stocks Go Up and Down,” 4) basic valuation via Bruce…


Robert Smith, CEO and founder of Vista Equity Partners famously said: “Software contracts are better than first-lien debt. You realize a company will not pay the interest payment on their first lien until after they pay their software maintenance or subscription fee. We get paid our money first. Who has the better credit? He can’t run his business without our software.” He used this insight — which has been absolutely correct to date — to build one of the most successful private equity firms in the world and generate exceptional investment returns.

We are about to find out if Robert…


Six weeks ago the idea that America would be shut down and in the grip of a severe recession was unimaginable to many. And rightly so. We are living through a very low probability public health and economic outcome that was mostly created by institutional failures around virus containment.

Now the idea that America — and the world — will begin to restart in three to six weeks is similarly unimaginable to many despite this being a *much* more likely scenario than the current shutdown was only six weeks ago. In fact, I would go so far as to say…


We are in a severe recession right now that is unlike any other in recent history. Tolstoy’s Anna Karenina begins with the sentence “All happy families are alike, each unhappy family is unhappy in its own way.” This recession makes me think of this quote as it is quite distinct from other recessions dating back to the early 1970s. This is not a financial crisis. This is not an oil price induced recession. This is not an asset bubble popping induced slowdown exacerbated by a terrorist attack. This was not caused by the Fed raising rates to prevent inflation. Nothing…

Gavin Baker

Founder, CIO & Managing Partner, Atreides Management LP. Former Portfolio Manager, Fidelity OTC Fund. No investment advice, views his own. More: gavinbaker.net

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