Dan Sundheim of D1 Capital on the art of public market investing

Bullish:

• $SPACEX - SpaceX has a near-monopoly in the launch business with strong cost advantages and significant growth potential from Starlink satellite internet service

  • “I value the company based on the launch business, which is a near monopoly and a fantastic business, and then our expectation like what happens with Starlink, which is just a matter of like P times Q subs.”

    Dan·1:22:30
• $SIEMENS_ENERGY - Siemens Energy is positioned to benefit from AI-driven electricity demand growth and turbine shortages, trading at a 50% discount to GE Vernova with potential for multiple expansion over the next two years

  • “I like Siemens Energy quite a bit. I think that you may get a lot of the multiple expansion in the next two years, and then the next eight years might be less exciting.”

    Dan·1:00:40

  • “GE Vernova trades at 2x the enterprise value of Siemens Energy. Just to give you a sense of like, and ultimately, there's no reason why the margins should be higher at GE Vernova, the revenue base is the same.”

    Dan·1:08:00
• $CLH - Clean Harbors owns the majority of hazardous waste incinerators in the US with strong regulatory moats due to NIMBY restrictions on new construction, positioned to benefit from onshoring trends

  • “There's a company called Clean Harbors, which I like a lot, which is they do hazardous waste and they own the majority of the incinerators in The United States. You can't really build more incinerators because of NIMBY.”

    Dan·1:00:52
• $GRID - Electrical grid infrastructure is underinvested and will see significant demand growth from AI and renewable energy adoption, with electricity demand expected to grow at 4% annually

  • “I think electricity demand will grow at 4%. It doesn't sound like a lot, but if you compound 4% over twenty years and you have invested for twenty years before that, it's very material.”

    Dan·1:03:30
• $REVOLUT - Digital banks like Revolut are taking market share from traditional banks globally, with low single-digit market share in most countries that is expected to continue growing

  • “I think that those banks [like NewBank or Revolut] are going to increasingly take market share... Revolut internationally has like low single digit, mid single digit market share in every country. I think that'll keep growing.”

    Dan·1:33:18

Bearish:

• $CHINA - Chinese equities face structural challenges from excessive government intervention in resource allocation and lack of due process, leading D1 to stop investing in China three years ago despite cheap valuations

  • “We stopped investing in China about three years ago... I think the government has way too much influence on how resources are allocated.”

    Dan·1:09:35