YouSaid · the spoken record

Kelly Granat

lines on the record: 97
first: 2025-03-11
most recent: 2025-03-11
sittings or episodes: 1
sources: podcast

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“That culturally was set up to be let's just perform what everything will take care of itself. Yes, we absolutely need to perform that's jobs one, two, and three. But there's other things we need to be doing to continue to develop and grow our business.”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“Different world, right? And so whether that means different strategies around products, we've had kind of a one size fits all. We are a long-only firm. We are a long short firm. What does that mean in 2025, right? You know, what a hedge fund is or what it represents to the market in 1997 looks pretty different than what that term means today. Today, it probably means more like a pod shop, right? That's what a hedge fund is. We're a long short fund, right? And a long only fund, and we're fundamental investors. And that means something different in 2025 than it did in 1997. We never had a PR effort. We never had a website until a few years ago, right? We wouldn't do things like this probably five or ten years ago. It wasn't the culture of the company, but the world's changed. And so the onus is on us to communicate our story, communicate how we've changed, how we've grown, what we've learned, how we've developed, what we're focused on, right? And so that's a different orientation for a firm.”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“Next generation, right? You know, I'm 50. Dave's, I believe 54, maybe he's 55, I'm not sure. If I'm in this seat in 10 years, that's probably not the best outcome for our LPs, right? There is, I think, a life cycle of doing this. And Dave always says, and I think this is right, when I'm less excited to jump on the plane to Singapore for two days, it's kind of how I know, right? I'm still excited to jump on the plane to Singapore, and so is he. So we're in the right seats, but we're equally focused on who is the next generation, how do we expose them to the things they need to get exposed to, you know, teach them how to manage people, how to think about portfolio, how to learn the areas outside of the areas they cover, and that they've grown up covering. They've proven themselves to be very successful analysts. How do they make, how do we develop them to become great portfolio managers, right? And so that's a big part of our time now, which is different for me than probably five years ago. And then the last piece is obviously just shoring up the organization for”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“How we do things from a process perspective, I think, across a lot of different parts of the organization. Three, I think, given the nature of collaboration that we talked about earlier with regard to sector coverage and how we work together, that's a slightly different human in terms of who's going to be good in that type of role and who succeeds, who communicates really well. There's always obviously a premium on communication in our industry and the ability to synthesize a lot of information into a couple of key questions. But people who are collaborative, who are really team-oriented, who are creative in terms of tools they employ to do fundamental research, the premium on those is even higher, I would argue, than it was before. And so I think we've evolved over time the types of people we hire. We've learned from who's really succeeded inside of our culture and who hasn't done as well and tried to kind of evolve how we think about the types of people we want to bring into the organization. Dave and I are very focused now on kind of”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“And foundations and some high net worth family outsourced family office types and high net worth people. And they gave us money day one and they just compounded for a long time. And so our orientation was heads down, put up numbers. We didn't really have an outbound effort, nor were we open for the first almost 15 years of our existence, right? We didn't really launch a bunch of new products after the long-only launch in 2004. We had a quick stint with a long-only emerging markets product that we quickly realized didn't scale and we folded that into our long only business and haven't really come up with a new product since then. And so there really wasn't a need to have a big outbound effort, right? And so we've always had an investor services effort, which is great, but that's one example, too, is, you know, the emergence of a lot of technology and a lot of products and capability. We built all our systems homegrown because when we launched in 1997, a lot of this stuff didn't exist. I was off the shelf, right? And so there's been an opportunity to modernize.”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“Steadily handing off portfolio responsibility by sector, kind of within the first couple of years of launching the firm, with the view that there will be moments where it is clear that there are certain people on our investment team who know more about this sector than I do, who are effectively making all of the decisions anyway. And so let's deputize them to actually make those decisions, right? And have the insights. And so that's been the culture of since the beginning, what we have been doing with him officially stepping back to really just kind of a chairman type of role and Dave and I taking over as co-CIOs was to really transition what we call kind of a 2.0 of Long Pine. And that's been, if I'm being honest, a heavy lift, right? Because, and that is a function to some extent of, you know, how we were set up at the beginning and then how much the market has changed, right? We had a great group of investors who were with us from day one, who were largely kind of North American endowments.”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“So, look, it starts with Steve, our founder, and how he set the firm up when he started it 27 years ago, which was with an orientation to succession. And I think that's the first really differentiating aspect of our company versus many of our peers, is that he was focused from the beginning on the company outliving him. And he comes out of the Goldman Sachs partnership back in the day. And I think that was in many ways the model in his brain of like, you know, you do well, you rise up, you own a lot of the company, and then ultimately as partners, you go, you know, go limited in the case of Goldman or you start to give away your equity to the next generation, right? And that's his vision was. And that, by the way, extends not just to the investment team, but to the entire company. It is the responsibility of every functional leader in our company, whether you run the tax department, HR, or IT, to understand and be mentoring who your successor is, right? And that's the culture of the firm and has been from the beginning. And so Steve has been”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“Always has to be room for them in the portfolio, right? Because those are the great compounding businesses. I mean, we owned both those companies at their IPOs and had meaningful positions. And, you know, with the benefit of hindsight, never should have sold. I mean, they would have gone to very large positions over time. So of course it would have trimmed. Look, that's why a portfolio was such an interesting entity because it's a balance of a lot of different things. And so the people thing is hugely important for us. And we always want to know who we're lined up with and what their incentives are and all the things I mentioned. There's also a lot of room for owning just fantastic businesses that to your point, whether you have an A plus CEO or an A minus, I'm not sure it really matters that much on the margin. We just want to make sure we're not paying too much for them, right? So that's, I think, always the key too in those situations is we want to own a stable of great businesses, particularly when there's a moment of dislocation or a question of doubt about something or there's a perception of”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“Right leader for the opportunity that this company, and if this company has, and has the right skills to kind of really lift what's happening here.”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“So we knew her because this again, like we track people, right? We follow people who we think are great. And when we own McDonald's many years ago, she was a CMO. So I met her for the first time at a meeting, a corporate headquarters, where they roll in five or six different executives and she came in and I didn't know who she was. And she spoke for, you know, and I answered a bunch of questions and was super thoughtful and insightful. And she walked out and I was like, who is this person? And I like Googled her and like saw her background and she was used to work and it's in CPG, which tends to be great training ground for analytical thinkers. And then we kind of followed her. And I knew Ulta and we were sort of sort of dazzled by their four-wall unit economics and done a bunch of work on the company, but the execution had been uneven, I would say prior to her arrival. And there were things we felt were missing in terms of sort of how the business was being run. And so when the board announced her hiring, we were like, oh my God, this is kind of perfect because she's exactly the”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“Fantastic. Mega all star Very good example. Another one from our past, which we did really well with, and which was a great example of this, was Ulta, when Mary Dillon took it over. This was at the time a small company, I think it was maybe the three-ish billion dollar market cap when she joined. And she was a consumer products expert, marketing expert. And this was a largely membership, loyalty-driven business around cosmetics where almost the entire employee base is female that had great product curation, but not a great culture inside the company and really hadn't built a great marketing muscle. And she came in and added all of that to the sort of the formula, the need economics of the business. They always had great four walls as a retailer, but really added something different to sort of the go-to-market and the proposition to the customer and how the company was run, who she hired. And like, that's a great example of like a very strong business that could even be could not.”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“Plant seeds and a bunch of other areas, and you see some of those seeds starting to come to fruition in terms of new products, new lines of business, new distribution channels, whatever it may be relative to the company we're talking about, and seeing that secret sauce is not just the single thing that made them great, but their ability to then recreate and innovate at scale, I think is super exciting to us.”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“Company. And so there are lots of examples in our history of businesses that are good to great businesses that we feel have been undermanaged and then somebody comes in who we know from a prior life or a prior existence or we do a bunch of work on that person if we don't and get super excited about their ability to transform. And to me, Nirvana is when you have a company that is so deficient in a certain functional area and then you bring in a leader who is an expert in that functional area and it's like that's magic and we've seen this a bunch of times and so those opportunities I think are super interesting. Two, I would say is just companies who are innovating at such a rapid clip and you see what's happening from a product pipeline perspective, right? They have a great monopoly incumbent business ideally, right? Or something that has incredible unit economics and they are using a lot of that profit and power to invest and”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“So it's some combination, I would say, for us, a lot of our process revolves around people. So it's the people who are running the businesses. And I think that companies are in some ways like families. There's a very distinct culture that characterizes and underpins companies and that matters immensely, I think, for how a company operates, functions, hires, retains, grows, invests, all of the things that drive sort of ultimately how they perform and execute. And so getting to know the people, what motivates them. Are they looking around corners and thinking about the thing that can disrupt them? Are they trying to disrupt themselves? Are they attracting and empowering the people that they are hiring into their companies and retaining them by giving them a lot of responsibility and a lot of autonomy and a lot of voice and decision making? So I think that's where it starts for us. And one of our favorite sort of themes in investing, which is not a sectoral theme, but sort of a change theme, is around new people, right? You change people, you change.”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“VNL and constant communication that we're all in. So this one I would say is consternation. What are we supposed to do about it? Not going to react. Live and learn. Let's keep falling.”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“And then the other side is like let's assume that the sockets walked back, right? And how much is going to get, and things are trading in crazy levels in the pre-market on Monday morning, right? That are theoretically exposed to these level of tariffs. We walk through that. And so the net of that is a lot of conversation and decision to do nothing. I mean, literally zero orders came out of this conversation, right? And that's not uncommon, but like for an event in a news cycle that is meaningful and somewhat anticipated, I would argue. And also, I think with the approach with the appropriate amount of skepticism in terms of what ultimately gets implemented, a lot of debate, not doing anything about it, right? And so I think it's a conversation that's live, right? And so I don't want to, like, all of this, you know, all the AI stuff, these are all very live conversations that, you know, live inside of meetings but are constantly being pushed forward.”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“Sort of had a back and forth a few times over the weekend. Okay, does this change anything for us? Let's come in Monday and see what happens. So Monday morning we sit down as a PM group every Monday and every Thursday and we're talking obviously all the time. And Steve joins that meeting. And we sort of went back and forth and said, okay, what does this mean? What are the industries that are, let's assume it goes through, let's play this out both ways, right? Let's assume it goes through. What are the industries that are this is a huge problem for? And we sort of tick through what some of those are autos and others, right? What will the retaliatory”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“So we all see the news starting to come out toward the end of last week. And over the weekend, Dave, my co-CIO, and I, who I also referred to as my work husband, we've worked together for 21 years, so a long time. We're emailing back and forth like, okay, so now what do we do, right? Like these are big announcements. These are big numbers. We started to see the responses from some other countries in terms of what they're saying. I mean, to be totally frank, the conversations like, I'm a really sure what we're supposed to do about this, right? Are we going to like radically alter our portfolio? I mean, is this even going to go through? What's going to happen on Monday, right? And we are in a moment right now of obviously very elevated or in an announcement cycle that seems to be accelerating with pace, right? And so.”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“You're going to see more knee-jerky type reactions to things. And that's just an awareness. We're not going to radically alter what we're doing or how we're positioned, but it's just, it sort of focuses us in different ways.”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, we are focused on what's happening inside of sectors, who's winning, who's losing, who are the best teams, who's executing, and to do that in 2025 and ignore macro. So I want to be clear, macro is not prescriptive in terms of what we do, but it is a tool in the kit and something that has to be considered. And so there are moments in time when it feels like the market is extending in duration and then we can reflect some of that and how we're positioned and how we're constructing the portfolio and how we're sized in certain things. And there is times, and I would argue we're in one of them right now, where there's a lot of uncertainty and appropriately so, right? And so the market is, it feels much more short-term oriented, much more data point driven. You know, the tariff thing over the weekend is a good example. And there's a bunch of announcements. And then some of that gets walked back on Monday. And so how does this all get implemented and executed, I think is an open question. And so in that type of environment,”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“It's a really good question. Somewhere in the middle, and I think we want ultimately the flexibility to pivot, right? I think that's what we've learned and experienced if we're doing this for a long time, is that there are certain market backdrops that are conducive to certain styles of investing where you want to be more concentrated. There are certain backdrops where you want to be less concentrated. There are times to go big on a bet when we feel like it's really underappreciated. There's times to recognize that a lot of work excited about. The world's excited about. And so you probably shouldn't be as big as we were. And so the, I would say the flexibility to recognize when we're in a very short-term oriented market or when there's duration, right? And then part of that, and I think one of the things that's changed is if I rewind the clock to 10 or 15 years ago sitting in our research room around internal meetings, we didn't talk about macro at all. Like it was just like, we're fundamental investors.”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“Does this mean, and what does this mean for LLMs? Did they have access to GPUs? Like, what do we know? What do we not know? And I think we're still trying to answer those questions. And I think there was a knee-jerk reaction from the market. We will have more of these, right? That is just part of this. And so that's not our reason to not be involved, but it does make you think about sizing. And we always want some measure of balance in our portfolio, and we want several things that we're excited about that have idiosyncratic drivers that some of which may be tied to AI, some of many of which are not, right? And there are many thematics in our portfolio that we're super excited about. And our job is to be thoughtful about portfolio construction and make sure that all of our eggs are in one basket are things that we believe are discrete bets, then ultimately trade like one, right? And so that's part of our challenge.”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“Right, and so what is the drawdown we are willing to sustain or endure if and when that happens, right? And so that's, I think, the risk framework on top of this is the most exciting dynamic thing and we can all talk for hours and hours and days about all the opportunities it's going to create. And then I think there, nothing is a straight line, right? And so I think there's the, this is the benefit of having done this for a long time is that there's, it's two steps forward, one step back, right? And so the deep-seek thing last week was interesting, right, in terms of being like, oh, whoa, what is this?”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“Sure. I mean, I don't think we have a guiding principle around it. I would say the way that we discuss it internally is how much exposure do we want to this theme. And I think what's challenging about this one is it cuts across a number of different things, right? There are companies that are not leaning into this technology, that are not benefiting from the proliferation of this technology today, who will and who are probably uniquely positioned. There are others who are in the AI is a problem for their business category, right? There's several industries that would fall into that camp. I think we keep having the conversation of how much exposure do we want because there's a recognition like we saw in the valuation bubble bursting of late 21-22 that there are nuanced bets here that are distinct, but that if there's a problem in AI, so to speak, and we can define what that may look like, these are all going to trade like one stock.”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“A risk function now that we didn't have going back five or seven years ago, which is somebody who used to run our fund of funds, which we had back in the day and shut down a number of years ago, who has built an incredible expertise and knowledge base around studying managers. And so when we shut down our fund of funds, we said to him, Frank, why don't you come study us and help us get better?”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“Target, three-year price target. What are the near term factors we want to be thinking about, if any? That's all the conversation that's happening before we actually begin to put an order in. So that's sort of the upward flow of ideas and research and structure of how we do things. The other thing that happens on Mondays is, and this is all day Monday, is that Dave and I have sector meetings with all of the teams on every other week basis. That meeting is everything from what are you working on? What are you trying to figure out? What resources are we deploying to help figure out those questions? Two, its earnings. Who's reporting this week? What are we expecting to hear? What would make us sell? What would make us add? What could surprise the market either way kind of thing? So that's on Mondays. That's sort of the structure of how we work as a team. And the portfolio is helped, I think, by something additionally new, which is we have”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“And those get served up every week for us to consider, and we pick one or two to review. Or three is something that's pretty far along in the pipeline of being worked on and we're thinking about actually beginning to transact in it. And we want to kind of surface it to the group and debate it. So that's the Thursday meeting. So again, all of this conversation is meant to foster dialogue, debate, like people sharing their points of view, asking hard questions, pushing each other. That's the essence of sort of our process, right? And then when we're ready to transact, it's collaboration with the trading desk, which has five people on it, to your resources question. And the question's there are, you know, what is max position size, liquidity? We've already had the conversation as a PM group and with the analysts around like, you know, how does this compare to the rest of the portfolio? What's the, you know, what's the IRRR? We've gone through the numbers, how does it price target one-year price target?”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“You may want to look into this, but that's really less of the role they play. They're really there to be supportive arm for fundamental research and answering key questions. That's just sort of how the ideas get generated, researched, process. We as an organization meet two days a week, Mondays and Thursdays. The Monday meeting is a new ideas meeting and a portfolio updates meeting. So we're buying this stock. Here's the thesis. At that point, it's not news to anybody because we've talked about it probably in a research meeting many times before. Or it's, you know, we're selling this and here's why. Or I met with this company. So just updates. Thursday is a couple different formats. It's either spaghetti against the wall ideas, like what are people hearing? We're just coming out of earnings. What are you hearing? What's interesting? What are people excited about? That's one. Two is what are things that have generated meaningful, like outsized alpha or massively underperformed on a trailing 90-day basis?”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“And so we are leveraging all of those resources on a fundamental basis, and then we have a three person data team. And the data team's role is a couple different things. They are our interface with third-party vendors on the outside and internally with our research team. They sit in on every single meeting. They know what we're working on, what's in the pipeline, and they are bringing external resources to bear to say we're trying to answer these three questions on X stock or X sector. These are the resources that we think can be helpful in helping you answer those questions from a data perspective, right? So they are another tool in the kit in terms of how to approach market research. And they work really closely with our analysts to help them solve problems. That's a newer capability in the last, call it four or five years, I think, has been super additive to how we work. The occasionally we'll call out something that they're seeing in various data sets that we get in terms of like something funky is happening.”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“And so, which is to me like, okay, you found your voice amazing, and now let's put you on a bunch of other stuff that you can just run after and then, you know, serve up to us basically. And so that's how people get sort of absorbed into the culture and see how we work. At that point, obviously they have an appreciation for our process, how we approach companies, how we talk to companies, how we conduct research. I may be segueing to that part of how the sausage gets made. You know, we're doing all the things I think a lot of fundamental research firms are doing. We're reading all the public filings. We're reading all the transcripts. We're listening to podcasts. We're going to conferences. We're doing a lot of deep channel work in terms of talking to partners and former employees. talking to people in the expert networks. We're reaching out to our own network as an institution, right? 27 years later, having done a lot of investing globally, we have a lot of people who we talk to who are former CEOs, former board members, who have a lot of thoughts because they're still pretty connected to the spaces in which they worked.”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“Typically, they're younger, 25 to 30, let's say, and come with some level of experience. And they've got the analytical toolkit built already somewhere else, sometimes in private equity, sometimes in banking, sometimes in business school. And typically they apprentice with someone senior for some period of time. That can be six months, it could be two years, and they will kind of co-cover a bunch of things together. And that person is not doing what we call like the grunt work. They are going soup to nuts from being on the calls, working on the models, going to the conferences, going to see the companies, being in all of our meetings. And what we find is that person's voice tends to start to get louder after kind of six, eight months, right? Because they've been around, they've seen how we work. They're asking questions. They're iterating. They're learning from other analysts. And when I know it's time for them to sort of spin out and cover their own stuff is when they start disagreeing with the person that they're apprenticing with.”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“Okay, sure. So we have currently 15 people on the research team, inclusive of Steve and Dave and me. And interestingly, in the 19 years I've been at the firm, we've been sort of between 13 and 19. And that's sort of where we live in terms of team size with the view that more people is not necessarily better. We want to run a relatively concentrated portfolio of 25 to 30 longs. That's kind of a best idea's portfolio. And we want a lot of collaboration. And so we want everyone to fit around a table to have a conversation in our research meetings and be a part of the conversation. And when you start to get into 20s and 30s, then you have a very siloed research team. And that's not sort of how we're oriented and culturally not how we work. How it works is, and maybe the best way to start is sort of sort of how someone gets ingested into the firm on the research team, right? So a new person joins.”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“However, there aren't a lot of opportunities yet to realize that in the public markets, I think a lot of those businesses are first probably being funded in the private markets right now or in the last handful of years in the same way that when the mobile transition happened and the iPhone came out, the Spotify's and Shopify's and DoorDashes and all these amazing companies that came out of that generation of startups came after, right? And so that those generations of cohorts of companies, I'm sure, are being formed and have been formed in the last couple of years. We don't invest typically at that stage in the private market and certainly many of them are not public yet. And so our positioning has been more really around picks and shovels with the view that let's see how the ecosystem evolves, let's see where profit pools are going to be created over time. But in the meantime, what we do know is that there are constraints and what those constraints are shifting, obviously. They started on the semi side. Now it's more on the power side.”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“Tons and tons of change. I mean, you've had people on this podcast who are far more informed on this topic, so I feel humbled by even attempting to answer the question. But I would say at a high level, you know, obviously we have been of the view or questioning of the view from the beginning, I would say to stepping back, that LLMs would not be where the value was ultimately probably largely created and that the fact that there are six, seven, eight of these today would likely consolidate over time down to a few. And so our view going back really from the beginning was that probably most of the value would be created at the application layer, right? And so that's part of why we have such a large position in meta and have for the last bunch of years is we feel like that's the most real life example at scale of commercializing a lot of the capabilities in core products today. And you can see it kind of in their results and they're talking to you about it when they speak on their calls and so forth.”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“Different opinions and over what time frame and where is their fake AI and where is their real AI and where is the value ultimately going to be created and harvested and realized. And so we debate that constantly. And I would tell you that we think different things today than we thought three months ago, six months ago, and 12 months ago. And they will be different. I can assure you from what we will think in three months, six months, 12 months. And so that level of change and dynamism, just as an investor is gold. I mean, that's why we do this, right?”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“The nimbleness to evolve our views as we learn is incredibly interesting. It's also really fun as a manager to have a team of incredibly talented people who are both just professionally and personally engaged in this topic. And so the amount of trial and error and the amount of testing that's going on on the weekends by our analysts who are downloading all these products and sharing through to the email distribution system their learnings to help inform how we're thinking about just what's happening because things are changing so quickly and there's so much dynamism around this topic is incredibly interesting right and so the flip side of that is you know I've seen a lot of bubbles in my career and so there's the appropriate amount of skepticism around where will the profit pools evolve and that's an ongoing live conversation inside of our firm and everyone's got”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“The second is that I'm an incredibly curious person who is very focused on growth, and growth in lots of ways. I mean, growth in terms of learning about new things, challenging myself, I play instruments. There's lots of things I'm interested in as a human. And I feel so lucky to have found a career where I get to actually learn a lot and then put that knowledge to the test by measurement, right? We can make we can put capital behind those learnings and those insights and see if we're right because there's a weighing mechanism every day, right? That gives us a scorecard. So for me, the opportunity to do that at scale on a topic that is, I think, transformational, not just for the markets, but for society is just intoxicating, honestly, as a notion, as a concept. And the fact that we can do a tremendous amount of fundamental research and also have the flexibility, the capital base.”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“It makes us kind of giddy and being kind of geek out for a second. I mean, Why, when I think about why I did into this field in the first place, I think there's two sort of defining characteristics that I have that positioned me well to do this job. One is that I'm a wildly competitive human being. I was a junior tennis player for my entire junior career before going to college. I played in college. I love to compete. I love a scorecard, right? That's just who I am as a human.”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“Comes through with the portfolio level is we are definitely running lower gross exposure as a firm than we did for the first probably 15 to 17 years of our existence as in deference to this dynamic, right? So we want room to be adding to things when we think there are non-fundamental reactions that don't make sense or overreactions to things that we think aren't that big a deal, right? And so for the first bunch of years of our existence, we ran more like 170 by 200 gross. And we've been consistently for the last six to eight years, we've been running more kind of 150 by 180 gross to give ourselves that room to breathe so that we can not have to play defense at the wrong time. And it can actually lean in when everyone's leaning out and vice versa.”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“Look across both ways, right? We want to be positioned in a way to capitalize on non-fundamental dislocations and lean into duration, right? So when those setup dynamics are tricky or are complicated and everyone's lined up one way, I want to line up the other way, right? And I have the duration and the capital base to do that. And so that's, I think we've always said that duration is our single biggest advantage, but it's never felt more prominent and powerful than it is in today's market structure. Having said that, sometimes there are tricky things in the short term. There's a data point that we feel like the market hasn't fully absorbed. There's a risk factor in the short term, or there's an investment cycle coming on something we love on a three or four or five year look. But we might be sized differently going into that event. It doesn't mean we're going to go in and out of positions. We rarely would do that, but we might be positioned differently. And I think the other thing I should have mentioned earlier in terms of just the difference of today versus before is, and this”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“Maturing efficiency. Is it a good thing for markets? Hard for me to be the judge of that, I would say. For us, you're right. We sit somewhere in the middle. And I think the onus or the responsibility is”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“And that is super helpful. And we meet as a group twice a week as a research team and are sharing information constantly across our organization because obviously Five Brains is better than one and people have thoughts because they're in the periphery of what we're actually discussing often what their own coverage area is. And so the notion even of a coverage area, we kind of shy away from at this point because we have so many people opining on different ideas and themes across the portfolio because they have their own insights from their own work.”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“And manifest itself is how we express sort of the fundamental sauce of what we do, which is the fundamental research, right? And so we were saying earlier, we're talking before we started about just our trading volume has clearly gone up over time on a dollar basis, less so on a name basis, because you get these outsized reactions that are often non-fundamental in nature to events, quarters, and so forth. And so all of those, you know, the tools are different. The resources are different. And then the last piece would be just the collaboration is different. In contrast to what I described earlier of kind of a siloed coverage model inside of a firm is not uncommon for us to show up at a company's headquarters for a meeting with four or five six analysts because there's people covering things that are adjacent to the topic at hand and the company at hand. And so often there's insights to be gleaned and questions to be asked that have implications for things that are outside of what purview of the conversation of that day.”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“Decisions that are long term oriented by the capitals, the fidelities, the T-Ro prices of the world is just less meaningful on how stocks actually trade. The new behavior it feels is more around what we call kind of setup dynamics, and that is a function largely of the dissemination of a lot of this third-party data, creating setup dynamics around events, quarters, conferences, companies having speaking investor days, and how those events are being previewed as a function of what third-party data is suggesting or what the sort of litany of sales traders that the banks are sort of prompting buy side people with in terms of where the whisper numbers are and so forth. And so that creates just a different trading dynamic in terms of how you execute the job, right? And in addition, obviously, what I mentioned earlier, we do now have as portfolio managers a lot of tools to help us think through risk differently, portfolio construction differently, and then how that”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“And the tools were different, certainly, that were available to you. In addition to that, I would say the portfolio level, when I look back, and obviously I wasn't managing a portfolio at that point in time, but looking up to my portfolio managers, the tools to think about portfolio construction risk, portfolio analytics, none of these things really existed. And so as a fundamental investor, you were really going bottoms up single stock, building a portfolio that way, and obviously looking at things like what acted in concert with one another correlations, things like that, but it was a different job. So that's sort of like a snapshot of 25 years ago, let's say. Fast forward to today, and obviously market structure has evolved meaningfully as a function of where the dollars are being traded. And obviously the emergence of passive and pods has been sort of the giant sucking sound in the public markets for a long time. And I feel like the marginal dollar being dictated by fundamental...”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“Structure was, I think, most fundamental firms pretty siloed, right? You could cover industrials, you covered consumer, you covered financials, and you were doing that with a peer set really of people outside of your firm who you developed a network with over time, who you were sharing meetings with, going to conferences with, and the level of conversation amongst peers was just not as informed because people were operating in sort of sector silos, right? In terms of knowledge and coverage and expertise and network. In addition to that, the tools with which we used to do our jobs were pretty different. You would meet with companies, you would read filings, you would go to conferences, you would try to do some proprietary research, but things like credit card data and expert networks and all of these tools that we all now use to supplement our fundamental research are as a part of our fundamental research didn't exist. And so the ways to do the job and the ways to differentiate yourself, I think we're different.”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source
“Interesting. I mean, when I zoom out and think about starting as a summer intern in the summer of 2001 during business school and then returning full time to the public markets in 22, the industry was really different. One, you know, there were a lot more fundamentally oriented directional duration-oriented investors who were doing deep research with three, four, five-year time horizon. There were many fewer levered pods and certainly passive wasn't a thing yet. And it felt like the marginal dollar of volume on the exchanges was dictated more by what fidelity or capital were thinking or maybe even sometimes a large hedge fund versus what was happening at Citadel or was happening with PAS or what was happening with Passive. And so in addition to that, when I think about organizational structure and how we did our jobs, the organization...”
2025-03-11 · Invest Like the Best · Kelly Granat - Investing At Lone Pine - [Invest Like the Best, EP.414] · IDENTIFIED FROM THE TRANSCRIPT · source