Frazis Capital Podcast

Jackie Vullinghs @ Airtree

Jarred Shein joins us to talk digital health. Jarred has invested in digital health at MH Carnegie and Qure, an Israeli based VC fund. 

0:20 - Introducing Jarred

1:00 - Jarred's education and background. 

1:45 - Jarred's studies of nanotechnology, specifically biochemistry 

2:30 - Jarred's thesis on biosensor devices and how it relates to Startrek

3:55 - End of university job with Macromatix, completely unrelated to biochemistry

5:10 - The early opportunity to pick up distressed medical device assets

6:00 - Australia's strong position in the world and relatively painless COVID-19 experience make it a great place for global healthcare

8:10 - Australia's unfortunate lack of a biochemistry talent pool

9:30 - Australia's amazing history of medical device companies, including Cochlear and Resmed

10:30 - The opportunity to invest in the digital health space in Australia

11:40 - Deep dive into Resmed (RMD:ASX) and its successful pivot to health data revenue

14:40 - The benefits of living and doing business in Australia

16:33 - The rise and rise of telehealth services, silencing industry doubters

18:50 - 'Ageing in Place' (getting older comfortably in the environment that you are in) is a really interesting growth space

21:25 - 'Digital Therapeutics' (clinically relevant personal solutions) is another compelling growth area (e.g. Propeller Health - a recent Resmed acquisition)

25:00 - Discussion of Click Therapeutics (digital therapeutics solutions for mental health issues)

26:55 - What happens when the 20 year patent life timer ends?

27:50 - Jarred's thoughts on Livongo (NASDAQ:LVGO), a Frazis Capital position

30:30 - Successful US healthcare business models rely on the US health insurance system

32:00 - The merger between Teladoc (NYSE:TDOC) and LVGO

34:00 - There should be a very tight communication channel between primary care and chronic disease management

35:25 - Do you book a telehealth consultation based on Brand? Doctor? Or Price?

37:30 - Today's best opportunities in digital health, both listed and unlisted

38:50 - Missed opportunity in American Well (NYSE:AMWL), a hot recent digital health IPO

40:10 - Lots of opportunities in the private space for digital health

40:45 - Early stage Australian digital health companies can only access capital by going public

41:35 - Jarred discusses a compelling Australian microcap digital health opportunity, Hera Med (ASX:HMD)

 43:40 - Jarred introduces an interesting QLD telehealth service provider called Medicine, providing remote primary care services

45:00 - Some problems within the digital health industry - access to capital and talent, commercialising technology

Sam Rich joins us to talk security, Crowdstrike, travel names, and how we're positioning the portfolio.

We discuss the current landscape and a couple of choice earnings reports. 

0:20 – Introducing Joel Tomaino

1:10 – The structural shift to e-commerce

1:30 – Government stimulus and the diverse impacts of the current economic crisis

2:30 – How long will stimulus benefits and exacerbated e-commerce growth rates last

3:30 – Australian e-commerce plays, including Redbubble (ASX:RBL)

4:40 – E-commerce growth in mature markets compared to developing markets

5:00 – The opportunity for MercadoLibre (NASDAQ:MELI) in South America

6:20 – The opportunity for Sea (NYSE:SE) in South-East Asia

6:55 – Disney’s powerful platform and the success story of Disney Plus

8:25 – Is there pent up demand in travel? Will travel companies have their best years yet?

9:50 – Broader rotations in the market. Re-rates in growth stocks

10:45 – Frazis Capital’s auto plays (Carvana – NYSE:CVNA, Tesla – NASDAQ:TSLA)

12:45 – Changing attitudes to public transport because of COVID-19

13:40 – Where does the common cold come from?

14:10 – Market darlings showing some cracks, including Nanosonics (ASX:NAN)

14:50 – Afterpay’s (ASX:APT) European acquisitions

15:55 – Xero’s (ASX:XRO) acquisition of an invoice-lending company

17:20 – Great companies create much bigger TAMs than first estimates

Chris Gosselin from Australian Fund Monitors (https://www.fundmonitors.com/landing.php) interviewed us about the fund and strategy. 

0:00 - Introducing Michael Frazis

1:12 - Michael introduces Frazis Capital and describes its core investment requirements (Customer love, explosive growth and market leadership)

2:45 - The opportunity presented by high growth companies with ugly financial statements, professional scepticism and high short interest

4:00 - The best investment opportunities are often in front of your eyes the entire time

4:35 - Michael reiterates the importance of the fund's core investment requirements

6:10 - Unit economics often tell a very different and more valuable story than financial statements (using Xero and Tesla as examples)

7:35 - Frazis Capital's systematic framework

9:30 - Chris asks Michael, "When you don't get it right, how do you manage that?"

12:00 - Chris asks Michael, "Is there a stage at which these companies, which are growing very quickly, become mature?"

12:40 - Michael discusses Adobe and Salesforce as examples of mature software companies

14:50 - The importance of focusing on market leaders, using the example of the BNPL industry 

16:10 - MercadoLibre and Sea - true market leaders, which deserve valuation premiums

18:00 - Focusing on $5-20 billion companies growing revenue at 50-100%/annum

18:40 - Chris and Michael discuss the headwinds and opportunities presented by COVID-19

20:10 - Making sure that portfolio holdings are accelerating through the coronavirus period

22:00 - What is the smart move right now? Find companies with pent-up demand

Companies with brilliant products and broad customer support are faring significantly better than mature incumbents. 

One of the fund's newest holdings satisfies our three core criteria: Exponential growth, products that customers truly love, genuine market leadership.

Gaming is one of the more exciting industries in technology right now. We discuss the opportunities and precedents for Twitch and streaming phenomenon. 

Ben also takes us through leading chipmakers like NVDIA. 

0:32 - Long term trends for Nvidia

2:16 - Demand for Nvidia GPU's in Data centres

3:03 - Use of Nvidia chips for Crypto mining

4:38 - Semiconductors are on the forefront for everything

5:46 - Nvidia compared to other chip makers, AMD and Intel

8:35 - Bitcoin mining economics

9:22 - Technology companies that 'miss the trend'

10:40 - Moore's Law and what it means for CPU's and GPU's

11:58 - What is the go-to for gamers now?

12:50 - Interesting stocks and opportunities for gaming - the shift to mobile gaming

15:35 - American vs Chinese Mobile games

16:10 - Sea's mobile game Freefire's recent success

18:40 - Ben's experience with mobile gaming 

19:44 - Popularity of the MOBA category specifically League of Legends

21:05 - Online viewership of League of Legends worlds more than 44M concurrent 

22:06 - Streaming as a platform for advertising games (Twitch, Mixer)

24:42 - Reddit gold - 100,000's donations add up

25:15 - Facebook hate speech fiasco 

26:42 - Radicalisation of people through the Youtube algorithm 

27:52 - TicTok's censorship and radicalisation 

29:36 - Thoughts on gaming stocks (Activison, EA)

31:04 -  IP conversion from console to Mobile 

31:57 - Hit vs franchise games

34:30 - Microsofts unsuccessful move into the streaming industry 

36:44 - Chinese apps and consumer trends moving to the US 

38:16 - Thoughts on 3D gaming and where gaming will be in 5 years

39:46 - Historical precedence for streaming Chess on Twitch

Peter Stevens rejoins us to discuss some of our environmentally friendly investments.

0:30 - The continued dispersion between technology and the rest of the market

0:50 - The successes of Pinduoduo, Carvana and Afterpay

1:28 - Frazis Capital's successful diversification away from a highly concentrated portfolio

2:33 - Comparing today's hot tech businesses with the hot auto businesses of the past

3:00 - Michael introduces Plug Power (NASDAQ:PLUG), a hydrogen fuel cell manufacturer and one of the fund's most exciting holdings

5:00 - Introducing the Frazis Capital Youtube channel

5:50 - Michael introduces Chinese software firm, Kingsoft Corporation (HKG:3888)

7:00 - Peter and Michael discuss the various factors influencing the systematic underpricing of IPOs 

10:10 - Cochlear's (ASX:COH) lucrative discounted capital raising 

11:35 - The value that Frazis Capital can add to your portfolio

12:40 - Solaredge (NASDAQ:SEDG), an innovative Israeli solar provider and portfolio position

14:40 - ESG investing and the importance of being forward-looking  

Alexander began his career investing in technology for UK funds management giant Neptune, before joining London-based VC fund Redline Capital. It's rare indeed to speak to someone with experience across the public and private side of tech investing. 

We had a fascinating chat covering robotic process automation, innovation investing, and life in venture capital vs public markets. 

https://www.linkedin.com/in/alexander-portz-3a265236/

https://www.redline-capital.com/

0:50 - Alex talks about his start in public markets

Eti Amegor of Axius Partners & www.suitsandkicks.com joins us to talk allocating and investing in the strange current environment.

0:52 - Opportunities during the coronavirus