AI Summary
5 min readAI Winners & Losers: A Fundamental Investor's View
Dan Chong, CEO and CIO of Alger, has been investing through technological revolutions since the 1990s. He sees the current AI boom as fundamentally different from the internet bubble—and potentially more durable. But he also sees real dangers, including the possibility that some of today's biggest names could end up on the wrong side of history.
Why This AI Cycle Is Different from the 1990s
The obvious comparison between today's AI mania and the late-1990s internet bubble is tempting, but Chong argues the differences matter more than the similarities. In the 1990s, the leaders were unprofitable startups with minimal revenues—Amazon went public with about a million dollars in revenue selling books online; Yahoo was a fledgling company. Today's leaders are the opposite: Microsoft, Amazon, Google, Meta, Oracle, and Nvidia are companies with massive profits, decades of operating history, and proven management teams.
"They are investing in what they see as the largest opportunity of their generation," Chong says. "And that in itself is strikingly different than the 1990s, where the leaders were often companies that were not profitable, minimal revenues."
Continue reading the full summary in the app — free to try.
Read Full Summary →Free • No credit card required
Never miss an episode of Animal Spirits Podcast
Get every new episode summarized in your inbox — free, ~5 minutes to read.
No spam. Unsubscribe anytime.
What you'll learn
- 1 (00:00) **Introduction & Guest Background** - Michael and Ben introduce Dan Chung, CEO and CIO of Alger, and set up the central tension of the episode: picking winners and losers in a concentrated AI-driven market.
- 2 (04:31) **Key Distinction: 2020s AI vs. 1990s Internet** - Dan explains why the current AI boom is fundamentally different from the late 90s dot-com bubble, focusing on the quality of the leading companies.
- 3 (07:16) **The Fun vs. Stress of Picking AI Winners** - Dan describes the current environment as an exciting, once-in-a-career opportunity for a fundamental investor, rather than a stressful one.
- 4 (08:26) **The Biggest Danger: Disruption & Lack of Nuance** - Dan identifies the primary risks he sees, including the threat of rapid disruption and the market's emotional, non-nuanced reaction to news.
- 5 (11:17) **Risk Management in a Volatile AI World** - Dan explains Alger's scenario-based approach to managing risk, focusing on fundamentals and risk/reward for each holding.
- 6 (14:13) **The Alger 35 ETF: High Conviction, High Concentration** - The hosts discuss the extreme concentration of the Alger 35 ETF (ATFV), using April data to show large active bets on names like Nvidia and Nebius.
- 7 (15:21) **Source of Conviction: Experience & Deep Research** - Dan explains that the conviction behind the concentrated portfolio comes from decades of experience in high-growth, disruptive industries and rigorous fundamental analysis.
+ Full timestamped outline available in the app
Show Notes
On this episode of Animal Spirits: Talk Your Book, Michael Batnick and Ben Carlson are joined by Alger's Dan Chung to discuss: investing in concentrated portfolios, what it's like picking stocks during a boom, sorting through the winners & losers in AI, Meta vs. Google and more.
Find complete show notes on our blogs...
Michael Batnick’s The Irrelevant Investor
Feel free to shoot us an email at [email protected] with any feedback, questions, recommendations, or ideas for future topics of conversation.
Check out the latest in financial blogger fashion at The Compound shop: https://idontshop.com
Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Ben Carlson are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. See our disclosures here:
The Compound Media, Incorporated, an affiliate of Ritholtz Wealth Management, receives pay
More from this podcast
Animal Spirits Podcast →