To Investors
2024 was a year of reflection for me. For a while I was unsure of how to build the life I actually want to live, but now I think I’ve figured it out. Essentially the guide in that process was a series of lectures I listened to delivered by Jordan Peterson. The lesson I learned from those lectures was that you need to go into wherever there’s chaos that bothers you, and try to make sense of that chaos or clear it up in order to find the best version of yourself. That's exactly what an entrepreneur is doing when they start a business - he or she goes into chaos as they try to solve a problem or address a need.
The thought to always keep in mind when going into that chaos is that if you’re doing anything, as long as it’s in the pursuit of good, things will work out for you. I recommend that everyone listens to these lectures because they’re lectures about finding the best version of yourself.
(Link in the appendix)
Here’s what I’m taking into 2025…
Doubling down on my efforts to becoming a master capital allocator will be my sole focus for the year.
I’ve also written down a few themes which I’ve taken note to carry into 2025.
Bitcoin
On the 10th of January 2024 the U.S. securities and exchange commission approved 11 of the first ever Spot Bitcoin ETFs. Large and well respected investment product institutions such as BlackRock, Ark Invest, and Fidelity (among others) were now allowed to offer the world's largest institutions exposure to Bitcoin as a commodity, and not just through futures. In a sentence; Bitcoin received a stamp of approval from the whales of the world.
On that day the Bitcoin price was around $46 560 a coin.
Fast forward to the U.S. Presidential elections in November, as Donald Trump campaigned for a second presidential term, he made a promise to create a U.S. strategic national bitcoin reserve if he was elected president. Well, the short story is that he won the 2024 election in what ended up being a landslide victory. For the first time in history, in December 2024 the price of bitcoin breached $100 000 a coin - putting the value of bitcoin as an asset class above $2 trillion.
Anthony Pompliano made an interesting note that bitcoin is the new S&P 500. What he meant there is that most money managers worth taking note of try to beat the returns of the S&P 500 in a given year and the higher your outperformance of the S&P the more respect you should have in the finance business.
There’s weight to that argument, but in my view there’s a deeper story to the significance of bitcoin. From a capital allocation perspective as a company treasury or as a national reserve treasury, bitcoin will have the most attention its ever had this coming year. See the chart below showing how bitcoin has outperformed all major indices and benchmarks since inception, and also note how the U.S. national debt has grown at a larger rate than gold since ~2012.
(Full letter in the appendix)
Shipping Products
It’s incredibly difficult to pursue unorthodox ideas in the world. But again, if it’s in the pursuit of good, then things will work out in your favour.
Two of the entrepreneurs I respect most in the world taught me that you have to just keep shipping products - quickly.
If we are asked to search anything on the internet most of us would go on our Google app or our Safari app (which defaults to Google) and type what we need. Then we’d sift through a list of blue links for the answers we want.
Less of us would go on Perplexity, but I think that will change very soon.
Nowadays we want information immediately and we’re always on the move, so search needs to keep up. If you search anything on Perplexity it gives you the answers as you want them, immediately, without having to sift through a list of endless blue links. Although the company is in its early days, I think Perplexity is a game changer for search.
I asked Perplexity: “How have perplexity users grown since 2023 and how has Perplexity’s valuation changed since 2023?
Answer from Perplexity:
“Perplexity AI has experienced significant growth since 2023, increasing its monthly active users from approximately 4 million in Q3 2023 to around 15 million by October 2024, marking a 275% increase in user engagement. Its valuation has also surged, rising from $250 million in 2023 to about $3 billion in June 2024. This reflects a strong trajectory of growth driven by increased demand for its AI search capabilities.”
The most interesting thing I’ve noted however, is that Perplexity’s CEO, Aravind Srinivas, is extremely competitive and determined to win. In a post on X from October, Aravind noted that in just 10 days, the company shipped Finance, Spaces, Internal File Search, Reasoning Mode, and a MacOS app. 5 products shipped in 10 days!
Keeping with the theme of competitive and determined CEOs, in October Tesla hosted their annual Tesla AI day. At these events Tesla reveals its new product pipeline and updates the world on progress to date. This year Elon and Tesla revealed a fully functional Optimus humanoid robot and sent a number of them out to interact with the crowd at the event. Tesla also revealed an autonomous passenger vehicle and an autonomous “minibus” that will be rolled out by Tesla as part of an autonomous taxi network that the company plans to build out. On December 17th Tesla’s stock price hit an all time high of $479.86 and the company’s market cap reached $1.5 trillion.
Side note: I plan to study Tesla deeply in 2025!
Back Home
Zooming in closer to home, South Africa’s national elections this year were interesting to say the least. For the first time since democratic elections were allowed in 1994 in South Africa, the popular ANC political party failed to win an outright majority in the national elections and had to settle for a coalition government, dubbed the Government of National Unity (GNU) - comprising 11 political parties.
It's early days but the thing to watch here is whether the government can function coherently given the broad views of this coalition, and at the same time whether there will be a unified acknowledgement and productive action in favour of the right regulations, policies and infrastructure set-up to allow South Africa to finally truly blossom economically.
There is growing sentiment however that public-private partnerships that allow strategic assets in the country to thrive are vital to igniting economic growth in South Africa. One such example of that collaboration is the Independent Power Producer Procurement Program (IPPPP) that has continued in South Africa. In the back half of 2024 there were less reports of disrupted electricity supply in most regions in South Africa.
The entities that own strategic assets such as Eskom and Transnet need to be managed with a deeper intent to improve their performance.
Earlier in 2024, APM Terminals launched a legal dispute to block a deal where ICTSI won a competitive bid to run the Pier 2 terminal in the port of Durban. This was a much needed agreement that would have opened up further such agreements between the public and private sectors. Nonetheless, the silver lining is that there’s an acknowledgment that the government doesn’t need to operate strategic assets, they can and should own assets where it makes sense, but operational responsibilities should lie with market-proven specialists.
As part of a document I had prepared looking into “Rejuvenating South Africa’s Shipping Ports”, the following chart highlights a troubled reality at all of South Africa’s container ports - which could have started to be addressed had the ICTSI-Transnet deal went through.
(See the full document in the appendix below)
Wrapping up
I opened this letter with a note that it's important that I go into chaos in search of the best version of myself. Mastering capital allocation is not an easy feat. When I am a master at capital allocation I’ll be in the same league as Warren Buffet, Jeff Bezos, Mark Zuckerberg, and Dara Khosrowshahi. One thing I’ve noticed about each of those people is that they are obsessed with learning and writing. (Maybe not Dara so much on the writing side).
Self-Taught MBA was conceptualised with the same sentiment, which is figuring out how I can take what’s happening in the world, synthesise it and reproduce an explanation and action in my own words. I believe you never really know enough about a topic unless you can research and write about it coherently.
At first glance, for many readers the topics I write about in my investor letters on Self-Taught MBA may seem random and all over the place. But if you’re a capital allocator you need to have your eye on everything that’s happening that matters to you, and you need to be able to decipher how world events will affect your portfolio of work. For example if you don’t study and understand bitcoin, as a CEO, CFO, or board Chairman you’ll fail to understand that the purchasing power of your company’s treasury is being eroded every day if you’re not allocating those reserves to an appropriate asset. In fact that’s called a fiduciary responsibility to your stakeholders - which all C-suite executives should adhere to.
Another example is the skill of reporting. If you’re unable to do effective research and put together a coherent interpretation of your findings you won’t be able to convince investors why they should back you, or convince your company board why the company should pursue a particular project.
The most important job for me with regards to this platform will be how I leverage it to get me closer to my goal of being a master capital allocator. So I’ll continue to build on that going into 2025.
I’ll leave you with a note from Dave Chappelle’s Netflix special called The Dreamer.
In an audience engagement after the performance Dave mentions that in any moment the most powerful dream is the one that wins, and you have to be able to determine at any moment whose dream you’re living in. You then need to be humble enough to realise when you’re in someone else’s dream, and when you’re in yours.
Put another way, if your boss can call you in her office and bite your head off for something, you’re in your boss’s dream. If you’re a creator and a random person comes up to you to compliment you on your creation, you’re in your dream. That little anecdote has helped me calm my mind and navigate many interactions since I first came across it.
I hope you enjoyed reading this letter. On my journey to becoming a master capital allocator, one lesson down, a billion more to go.
Wishing everyone a prosperous 2025!
-Mansa
