Welcome to The Nightcrawler, a weekly collection of thought-provoking articles and analysis on technology, innovation, and long-term investing. The Nightcrawler is published every Friday evening by Eric Markowitz, Nightview Capital’s Director of Research.

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In this evening’s email… 

Quote of the week: “Waiting helps you as an investor—and a lot of people just can’t stand to wait.” — Charlie Munger

Why I play the long game

This week I’m sharing a very personal story: one year ago, I underwent emergency brain surgery to remove what—at the time—doctors thought could be a stage IV glioblastoma (GBM) tumor that had developed on my brain stem. I was told that—if I survived this highly risky surgery—I could expect to live, potentially, another six months. At the time, I was 35-years-old with an 18-month-old daughter. 

Miraculously—and thanks to my fantastic brain surgeon and care team—I not only survived the surgery, but the pathology came back with surprising result: it wasn’t cancer, but rather a bizarre, unexplainable bacterial abscess. Recovery has been a process, but I’m doing just fine now. My wife and I are even about to have our second baby: another girl.

In partnership with the publication BigThink, I wrote an essay about my story: How a brush with death shaped my long game.

In this newsletter, I often write about the powers of being patient, long-term thinking,and the importance of compounding. And all of that is undeniably true. But my experience shifted my perspective just slightly: we should never take being a “long-term” investor for granted. Compounding over time is a privilege—not a right.

In a new series of columns for Big Think called The Long Game, I’ll be writing more about the idea how to make decisions (whether in business, investing, or life) that optimize for positive long-term outcomes.  “Playing the long game isn’t just about structure and process and systems that are designed to withstand the long-term: it’s about the joy and gratitude of getting to play the game in the first place,” I write in the piece. 

  • Key quote: “Much of our popular media tends to focus on overnight successes, the ’30 under 30′ lists, and so on. This column is different. It’s about how to think long-term, while still acting decisively in the moment. As an investor, this is all I think about: how do I make decisions today that will play out well in the coming years? There is a playbook, and I want to share it.”

***

The decade ahead for Amazon

Over a decade ago, we made our first investment into Amazon. The company has evolved and grown in dozens ways, and so we felt it was time to update our views (and thesis) on the company. This week, we published Nightview Capital’s Q2 Investor Letter which contains our updated, long-form thesis on Amazon—and where we see potential for significant growth in multiple lines of the business. (Click here for Nightview Capital’s updated Fact Sheet with performance and additional disclosures.)

  • Key quote: “Like many companies during the pandemic, Amazon faced immense challenges in near-term forecasting. These challenges led to a significant dislocation in company resources and capital allocation. However, coming off a period of over expansion, we have tracked significant adjustments in the last 24 months that we believe have re-aligned company resources to better reflect the go-forward market opportunity. In a nutshell, we believe AMZN is stronger than ever, and that there could be a multi-year diversified business opportunity ahead of us. We remain highly positive on the business—and optimistic about both the company and equity over the next 12-24 months.”

A few more links I enjoyed: 

Direct and indirect – via Josh Tarasoff / Greenlea Lane Capital Management, LLC.

  • Key quote: “A different perspective is that an investment thesis should be firmly grounded in reality, so it is sensible to concentrate on just that. In this way of thinking, enthusiastic study of the past and present of companies and industries is the bedrock. When a strong view of the future comes into focus, it is not quite a forecast but an insight about where things are headed. Seeing that a company has a bright future is like identifying a sapling as a sequoiadendron giganteum—also known as a giant sequoia, among the most immense and longest-lived of tree species—planted in nourishing soil and uncrowded by other growth. This assessment is not, in point of fact, a prediction, but rather a perception of potential embedded in the present situation. Forecasts come with the territory, of course, but they are secondary—a tool for adding rigor and dimensioning what the future may hold. Emphasizing potential over prediction could be thought of as the indirect approach.”

Which U.S. Stocks Generated the Highest Long-Term Returns? – via Hendrik Bessembinder

  • Key quote: “This report describes compound return outcomes for the 29,078 publicly-listed common stocks contained in the CRSP database from December 1925 to December 2023. The majority (51.6%) of these stocks had negative cumulative returns. However, the investment performance of some stocks was remarkable. Seventeen stocks delivered cumulative returns greater than five million percent (or $50,000 per dollar initially invested), with the highest cumulative return of 265 million percent (or $2.65 million per dollar initially invested) accruing to long-term investors in Altria Group. Annualized compound returns to these top performers relatively were modest, averaging 13.47% across the top seventeen stocks, thereby affirming the importance of ‘time in the market.’ The highest annualized compound return for any stock with at least 20 years of return data was 33.38%, earned by Nvidia shareholders.”

Interviewing Epic Games Founder/CEO Tim Sweeney and Author/Entrepreneur Neal Stephenson – via Matthew Ball

  • Key quote: “In the interview, we discuss their definitions of ‘Metaverse,’ thoughts on its technological and economic growth, Neal’s reaction on the day Facebook changed its name to Meta, the future of Fortnite, Apple’s Vision Pro, blockchains, and the ethics of Generative AI, plus ‘Snow Crash 2,’ and much more.”

From the archives:

Cargo Cult Science – Caltech’s 1974 commencement address by Richard Feynman

  • Key quote: “But this long history of learning how to not fool ourselves—of having utter scientific integrity—is, I’m sorry to say, something that we haven’t specifically included in any particular course that I know of. We just hope you’ve caught on by osmosis. The first principle is that you must not fool yourself—and you are the easiest person to fool.  So you have to be very careful about that. After you’ve not fooled yourself, it’s easy not to fool other scientists. You just have to be honest in a conventional way after that.”