Value Investing with Legends Phil Ruvinsky - Sustainable Competitive Advantages in Technology
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Jul 12, 2024 
Guest Phil Ruvinsky from BlackRock shares insights on sustainable competitive advantages in technology, AI's impact on the competitive landscape, and portfolio construction. Topics include evaluation of management, return on invested capital analysis, and future of active management in indexed market.
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Amazon Analysis
- Phil Ruvinsky analyzed Amazon 25 years ago, noting its low margins, high capital efficiency, and negative working capital cycle.
- These factors suggested high returns on capital, but Amazon's trajectory changed significantly over time, highlighting the dynamism of the tech sector.
TMT Sector Dynamics
- Technology, media, and telecom (TMT) sectors are dynamic, with constant change and innovation.
- Companies can achieve high ROIC through either low margins and high capital velocity or high margins and low capital velocity.
AI and Competitive Landscape
- Generative AI's impact is still unclear; it's good at linear tasks, but not complex, nonlinear problems.
- Focus on companies with unique data sets that AI can leverage, as they are likely to benefit.