Portfolio Manager at Saga Partners. Long-term, fundamental, value investing.

Cleveland, OH
Joined March 2019
“Luddites actually managed to delay wool-shearing technology in much of the West Country (England’s southwest) in the early 1800s. For anyone thinking that we should deal with AI in a similar way, for example, it is worth considering that the result was that this sector collapsed and moved to Yorkshire. The most important consequence was something else entirely, that more people could for the first time afford a large supply of clothes, bedlinen, sails and sacks, and the resulting increase in purchasing power employed many more workers in completely different sectors.” @johanknorberg in Peak Human
Activists called for an AI slowdown. Then politicians. Now even AI CEOs say it. It’s a bad idea. Here’s why America should not slow down AI:
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Shifting gears away from the typical AI doomerism, I thought I'd share some thoughts on what drives progress and how it relates to business and investing. Many of the ideas were inspired by @DavidDeutschOxf and @ToKTeacher. All mistakes/errors are my own.
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Last week I sent out Saga Partners 2025 Annual Letter. The core idea is simple: because the future depends on knowledge that does not yet exist, it cannot be forecast reliably. Investing therefore has to begin with explanations. The letter also includes reflections on nine years managing the Saga Portfolio and updates on $CVNA, $ROKU, $TTD, $TRUP, and $WIZEY Link below.
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Joe Frankenfield retweeted
Lots of discussion about OpenPath. I am pro OP. My thoughts below. Someone tell me where I’m wrong. OpenPath has value to both the buy and sell side. It has value to the buyer because TTD claims (and I’ll take their word for it) they run OP at cost. They claim their ~5% take rate is just to run it at break even. TTD is making all their money on DSP fees (different discussion) where the other SSPs have higher yields and dynamic pricing so they can make a profit which OP doesn’t need to. The pubs don’t have the same margin rate across all SSPs (it’s dynamic and essentially the SSPs is trying to take the highest margin while also trying to win the auction in the Pub’s adserver/header). Hypothetically OP would have the lowest margin (because they are running it at break even) but the bid would still have to be the highest to win the auction in the pub’s adserver. The one benefit for pubs using OP should be that they get more volume from TTD they wouldn’t otherwise get if they didn’t use OP. If TTD isn’t outright lying about OP and they are running it at breakeven and aren’t favoring it beyond it being the most efficient path to supply then I only see a benefit for buyers to use them. The inherent problem is, Google poisoned the well on this, when a company is on the buy and sell side they have a conflict of interest. Makes them an easy target for all of AdTech to bash them. OP doesn’t do rebates so holdcos who’s SSP rebates go right to their bottom line have every incentive (besides their clients media performance) to use SSPs who give them the biggest rebates. Has any advertiser ever talked about turning off Amazon Publisher Services? Amazing to me they have been able to fly under the radar for scrutiny when unlike TTD I don’t believe they have ever claimed to run it at cost or not to favor their own pipes.
Scoop: Dentsu and WPP have pulled back from The Trade Desk’s most closely-watched initiative, OpenPath, citing concerns over transparency, control and undisclosed costs. The shift signals mounting pressure on the adtech darling’s key supply-chain bets. adweek.com/media/exclusive-d…
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Most people think The Trade Desk $TTD's problem is slowing growth. That is part of the story, but it misses the bigger picture. Advertising has shifted from an inventory access problem to a capital allocation problem. The challenge is deciding where to deploy budgets across a fragmented and constantly evolving set of opportunities. In that world, the most valuable position is not owning media, but controlling the decisioning layer of the open internet. The real question is whether The Trade Desk’s role in that system is weakening or becoming more important. Full write-up below:
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Joe Frankenfield retweeted
There has always been speculation about how @Carvana creates such differentiated results. The truth is simpler than many people realize - it's a vertically integrated business model built to create better customer experiences end to end. I appreciate @peterahigh digging into the details of our integrated systems and the tailwinds to come from AI. Apple: podcasts.apple.com/us/podcas… Spotify: open.spotify.com/episode/5CF… YouTube: youtu.be/GMduzqMqRQA?si=9Rto…
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So much knowledge packed into 4 hrs “Humans have a remarkable power: the ability to form explanations that apply across domains & allow us to keep improving our understanding…If we appreciate that power, we can be hopeful about progress; if we ignore it, we fall into pessimism”
Now available below. Lots more compared to the original podcast - and all re-recorded with superior audio production! 4 hours and 19 minutes of "Explanatory Universality".
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Speed reading is a scam “The order of the words in sentences matters to the meaning of those words.” How to Read so that you *Retain* Information youtu.be/uiNB-6SuqVA?si=wt1D… via @YouTube
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Joe Frankenfield retweeted
The more knowledge we create, the more wealth we generate. The more wealth we generate, the more reality we make.
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“Nobody knows anything” 😅
The founder of Netflix literally drops his best business advice in under a minute
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Joe Frankenfield retweeted
Peter Thiel famously asked: "What important truth do very few people agree with you on?" Study David Deutsch's work and you will find several viable answers. I've read David's books multiple times and watched dozens of interviews, here are 10 possible answers: 1. AGI will not happen by scaling compute 2. Children are not treated as people ("Taking Children Seriously") 3. People don't understand how learning happens (the bucket theory of the mind is wrong) 4. The Copenhagen interpretation of quantum mechanics is plain wrong. Everettian multi-world is our best theory of physics. 5. Sustainability is not about "managing resources", it's about making as much scientific and technological progress as fast as possible. 6. There is no limit to what humans can do. We are not limited by our biology. It's a matter of having the right knowledge ("The principle of optimism") 7. Humans are cosmically significant. 8. Morality is objective, not subjective. 9. Beauty is partially objective. 10. Mathematics is not infallible at all. I swear I'm just scratching the surface. Watch this video & other interviews with @DavidDeutschOxf and you will find more.
I had the pleasure of sitting down with @DavidDeutschOxf in his lovely garden in Oxford a few months ago. Here’s our conversation. Links to watch on YouTube or listen on popular podcast platforms below. Timestamps: 1:01 - A tragic view of human history 7:04 - Why did it take so long for civilization to arise? 13:31 - Fallibilism 21:32 - Cultural relativism denies improvement 24:03 - Richard Dawkins and indigenous ways of knowing 26:49 - Chemical scum that dream of distant quasars 31:38 - The era of man 37:55 - People are unlike any other force of nature 42:51 - The dangers of regulating AI 48:09 - Are we running out of resources? 54:21 - Everything in existing educational theory is wrong 1:11:30 - When David met Richard Feynman 1:17:33 - Everyone is a Popperian 1:20:16 - Only progress is sustainable 1:26:00 - The biggest threat to Western civilization
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Go look at Carvana’s 5-year stock chart and then listen to this episode Ernie Garcia, Carvana’s founder and CEO, has navigated the business through an intense crisis, and in our conversation he explains it all in detail Thankful to him for sharing it joincolossus.com/episode/ste…
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The search for hard-to-vary explanations is the origin of all progress. It's the basic regulating principle of the Enlightenment. So, in science, two false approaches blight progress. One is well-known, untestable theories. But the more important one is explanationless theories. Whenever you're told that some existing statistical trend will continue, but you aren't given a hard-to-vary account of what causes that trend, you're being told a wizard did it. When you're told that carrots have human rights because they share half our genes, but not how gene percentages confer rights, wizard. When someone announces that the nature-nurture debate has been settled because there's evidence that a given percentage of our political opinions are genetically inherited, but they don't explain how genes cause opinions, they've settled nothing. They're saying that our opinions are caused by wizards, and presumably so are their own. That the truth consists of hard-to-vary assertions about reality is the most important fact about the physical world. It's a fact that is itself unseen, yet impossible to vary. @DavidDeutschOxf
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