Episode summary
Investing in AI for the long term: A tech investor's view
Capital Ideas Podcast
· · 29 min · Hosts: Mike Gitlin · Guests: Tomoko Fortune
Summary
Tomoko Fortune argues that artificial intelligence is the kind of big technology shift that can create both disruption and long-duration opportunity across the economy, not just among chipmakers and model builders. She says she wants to find the next set of companies, old and new, that can apply AI to widen their moats or even turn mature businesses back into disruptors.
She traces her style to launching a technology hedge fund after the post-dot-com bust, when tech was “left for dead,” and says that experience taught her to value patience, optimism and independence. At Capital Group, she says the long-term framework fits her better than hedge fund time horizons, because she likes holding compounders for years and tuning out short-term noise.
On picking winners and losers, Fortune says incumbents can still win in AI if they have scale, high-quality data, durable customer relationships and management teams that can execute quickly. She also emphasizes that investing requires humility: her Carvana example shows that even a strong long-term thesis can break if the balance sheet deteriorates, and investors have to change when facts change.
Key takeaways
- Tomoko Fortune sees AI as a multi-decade platform shift that will affect every sector, not just technology stocks.
- She prefers companies with durable moats, sticky users, hard assets and high-quality data as AI spreads.
- Fortune says management quality matters more in disruptive periods because slow execution can be fatal.
- Her Carvana mistake reinforced that a thesis can be broken by balance-sheet damage even when the long-term story still sounds compelling.
- She says Capital Group’s long-term culture matches her style better than hedge fund trading pressure.
Notable quotes
“I love these periods of big technology shifts that create disruption and opportunity”
“What I'm interested in finding are the next set of companies, old and new, that are applying and leveraging the AI technology”
“I truly am a long-term investor, and part of it is how I grew up in the sectors that I was looking at”
“I think there will be incumbents that definitely fall into that bucket. But I think they're, in AI, incumbents have a right to win”
“Investing is such a fine line between having the courage and conviction to stand your ground when you're right”
How the episode opens
- I feel like I grew up with these technology platforms that we call the Mag Seven today. - They were less magnificent then. - They were less magnificent.
People didn't even, you know, believe in them. I love these periods of big technology shifts that create disruption and opportunity. But what's so exciting about these shifts is that, in AI, much like the internet, it also has investment implications across all segments of the economy.
What I'm interested in finding are the next set of companies, old and new, that are applying and leveraging the AI technology, and in some cases, go from mature ex-growth companies back to disruptor. (gentle music) - Today, we are joined by Tomoko Fortune. She is a portfolio manager based in San Francisco.
Super happy to have you here. Thank you for joining us. - Thank you for having me, Mike.
- Before you joined us here at Capital Group, you were at a small hedge fund, and talk about that experience. We will get to how you ended up here, but talk about that experience, if you would. - Absolutely.
Well, I graduated from business school in 2003, and if you remember, that was a really difficult job market. Over half of my class graduated without jobs, and it was the post-dot-com bubble. And this was the depth of the tech downturn.
And, you know, I really wanted to stay in the Bay Area. I really wanted to be an investor. So I joined a startup hedge fund with my partners, David Riley and Chris Lord, who are still, like, family to me.
It sort of sounded crazy at the time to be starting a fund to focus on technology. Technology was left for dead. - Yeah.
- But I really believed in the people, Chris and David.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai investing
- long term investing
- tech stock selection
- equity portfolio management
- capital group
Watch the episode
Watch “Investing in AI for the long term: A tech investor's view” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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Capital Ideas Podcast, this episode and its artwork belong to Capital Group. Octagon is not affiliated with the show; this page is an independent summary.
