Masayoshi Son is arguably one of the world’s greatest investors, particularly in private startups that no one knows about it. Originally founding Softbank in Japan in 1981, it is a conglomerate investment holding company that focuses on technology and internet companies. Masayoshi through Softbank as well as Vision funds with hundreds of billions of dollars at his disposal, has invested into a plethora of new companies with the hopes that a small handful of them will generate massive returns. Masayoshi is most famous for having invested in Alibaba in 1999, $20 million USD for 20% of the company, after a 20-minute meeting with Jack Ma. In fact, in 5 minutes time, he had already made up his mind, having invested in Jack Ma based on his strong looking passionate eyes, a leadership style that resonated with others and could bring other people on board, all this despite a lack of revenue or a sound business plan. Known for his extreme bets, at one point Masa was temporarily the richest person on the planet, and had also the largest loss in history, losing 99% of his net worth during the internet dot com boom. His investment style is not for the weary or faint of heart.
On investing
Above all else, one should be looking for disruptive companies. Companies that are innovative, ones that have the ability to fundamentally change the very fabric of society. Companies that offer little positive change, or are just rehashes of an existing idea, will find it difficult. If they are a company that builds on already existing idea, the other key component is game changers that grows the user base exponentially.
Social media now is not a new phenomenon, so a new company coming in here does not change the landscape. But even then, iterations exist that elevates the landscape. Myspace was ousted by Facebook, who had a high startup cost, fixed costs that stays relatively static with proportional and slow increase in costs, but due to high user growth from network effects, user growth and subsequently revenue growth goes up exponentially. Similar effects taking place with Instagram and TikTok.
In other domains too, companies that changed how we live our lives are now the big companies. Whether that’s Amazon with sitting at home awaiting delivery of ordered items, Uber with getting a ride via app, Apple with the smartphone. Companies that can significantly change how we live our lives with an improvement are the disruptors that will end up capturing most of the market and by extension the market values in those industries. Big winners in big markets.
On the future
5G is a revolutionary technology that can be up to 100x quicker than 4G in speed and capacity. The world will be even more engulfed in technology consequently, due to its convenience. And eventually, 6G will exist that will also be exponentially faster than 5G. Target companies that move fast, and internet companies are the fast movers as they do not have the limitations of traditional companies in brick and mortar.
SoftBank in the eyes of Masayoshi son will consistently be undervalued, due to its current net asset value being lower than its market capitalization, leading to buybacks of the company. With the potential for any of its portfolio companies to explode in value from a small seed investment, Softbank would continue to have the potential to capture this value. As such its stock has somewhat of a built in long-term call option like potential.
Singularity is the vision of the future, when machine surpasses humans. And once artificial intelligence can make machines surpass humans, then that will no longer be a vision, but the future turned present instead. Looking for companies that will help make that future become a reality will lead to great investor returns. We see robots already becoming strong chess players, being used in factories to build cars, being used as cleaning robots, making coffee, and many other use cases. Those companies will at the very least be good for acquisition targets for larger companies.
On life
Masa at just the age of 19 wrote a 50-year plan, with his life broken up into 5-year segments. This keeps present actions having a purpose on a futuristic goal to accomplish in a 5-year bracket. Living without regret is also important, and regret comes from significant acts of omissions rather than acts of failure. Acts of omission in some instances can be 10x as negative than acts of failure. To reduce the occurrence of a negative life, it makes sense to reduce regrets, and thus, inactions. Taking action will lead closer to the desired outcome.
Disclaimer
This is not Financial Advice. This article is meant only for educational and perhaps entertainment purposes.