Big Tech and the future: A mini-manifesto. 

Stocks stage major recovery, with the S&P 500 and Nasdaq up a record eight session in a row. What a perfect V-shaped recovery for the Nasdaq as shown below. You cannot ask for a more symmetrical recovery, exactly as I said would happen 2 weeks ago, having bought  the dips like on Meta and SVIX (up bigly on those):

I more or less agree with Marc Andreessen’s viral tech manifesto, but the future is one of bigger and more dominant tech companies, not cryptocurrency, which is where I disagree with Marc, Chamath, Balaji, et al. My thesis is that an increasingly large share of economic activity will be funneled through these dozen or so huge companies, like Meta/Facebook, Alphabet/Google, Amazon, Tesla, Uber, etc. These companies are laying the digital (or in the case of Tesla and Uber, physical) infrastructure for the 21st century, such as for retail/commerce (Amazon), logistics/delivery (Amazon, Uber), advertising (Meta, Google), content (which includes search engines, YouTube, and social media), AI (all), transport (Uber and Tesla), software (Microsoft), cloud (Amazon, Google, Microsoft), energy (Tesla), etc.

I figured this out 15 years ago, predicting in 2007 that Facebook would be worth $1 trillion, which is now just 15% from that target. That post still exists somewhere. Once a company hits critical mass, its potential is unlimited.  Social networks, mobile advertising, search, and software, unlike cars and hardware, are infinitely scalable, although Tesla and Apple are exceptions. Apple is worth $2 trillion, on its way to $10 trillion. Meta, Amazon, Tesla, and  Alphabet will be worth $5+ trillion each. Their founders will be among the first trillionaires.

In my September 2020 post, How big can the tech giants become?, I lay out my case in more detail that the aforementioned companies, in the distant future maybe 50 years from now, will attains a sort of quasi-sovereignty, blurring the lines between a company and a federal or state entity.  To save money, the federal government will outsource an increasingly large share of roles to Amazon and Google, like Medicare, which is more efficient and will save money. In return, Google will be able to raise revenue from taxpayers directly. Short of issuing its currency, it’s bonds will be treated as effectively the same as Treasuries on the global market.

[Of course, this would run into obvious Constitutional legal hurdles, and it’s not like the federal government does not already rely extensively on private companies. The key difference is raising money directly instead of being a middleman.]

However, it took another 7 years from 2007 to invest, having wasted time and money on bad strategies, until finally figuring out what worked. Since 2014 I have made over 10x returns on the leveraged tech portfolio betting precisely on this outcome, and I expect make another 10x.  If you want to make money, why waste your time with crypto when leveraged tech or leveraged S&P 500 is better. (I wish there was leveraged Walmart, Broadcom, Visa, Mastercard, or McDonald’s stock, but no such thing yet.)