Long-Term Investment Approaches

AI’s exponential energy appetite is quietly rebooting America’s nuclear industry. In 2024, Big Tech had a critical realization: artificial intelligence isn’t just a software revolution - it’s a thermodynamic one. Training a single GPT‑4‑class model consumes ~500 MWh, that’s enough to power ~15 U.S. homes for a year. But inference is the real sinkhole. It’s always-on, everywhere, all at once. AI server racks consume >100 kW per rack, 10x more than traditional racks. Renewables can’t keep up. The sun sets. The wind stalls. Batteries are expensive, and at this scale, insufficient. Clean power isn’t the same as reliable power. And for 24/7 inference, only one option checks every box: nuclear - clean, constant, controllable baseload power. So what do trillion-dollar firms do when they realize their business model runs on electrons? They start buying the grid. ▪️ Microsoft partnered with Constellation Energy to restart Three Mile Island Unit 1 by 2028, supplying 835 MW of baseload power to its AI data centers - the first large-scale restart of a decommissioned U.S. reactor. Oh, and it’s betting on fusion too: Microsoft’s backing Helion, targeting the first commercial fusion prototype by 2028. When you have Microsoft money, you can place moonshots on the sun. ▪️Google is doing what Google does: building a portfolio. It inked a deal in October 2024 with Kairos Power for molten-salt SMRs (6–7 reactors by 2035, first demo 2030). Two weeks ago, it added Elementl Power - 1.8 GW of advanced nuclear capacity. ▪️Amazon Web Services (AWS) locked down up to 1.9 GW from Talen Energy's Susquehanna plant and, last year, dropped $650 million to buy a nuclear-powered data center campus outright. ▪️Meta finally joined the party last week, signing a 20‑year Purchase Agreement with Constellation to draw 30 MW from the Clinton nuclear plant in Illinois. The capacity is modest, but it signals a strategic shift - away from carbon offsets and toward operational baseload coverage. Even Meta sees the writing on the grid. This isn’t a hypothetical future - it’s happening now.  3 major nuclear PPAs signed within 2 weeks. Soaring federal support. Billions in private bets. What began as a GPU arms race is now an energy land grab. The next big AI breakthrough might not be a model, it might be a reactor.

Clear long-term plans let me “retire” as an Amazon VP at 50, travel 5 months a year, and still make money. Here’s how I did it and how you can apply the same thinking to your own life. Bill Gates once said, “Most people overestimate what they can do in one year but underestimate what they can do in 10 years.” I agree. Here are four real long-term plans I’ve created: – A 5-year savings plan that let me retire – A 10-year travel plan to see the world – A 10-year business plan for impact – A 40-year health plan to stay fit through age 95 Plan 1: Retire in 5 Years As my career progressed, I started thinking about financial independence. I followed three simple financial rules throughout my life to make this a possibility: 1. Live on less than I make 2. Invest for the long term 3. Max out my 401(k) match In my 40s, I calculated how much I needed to retire and I realized I was about 5 years away. The plan stretched to 7.5 years, but I made it. Even if plans shift, having one gives you clarity and options. Plan 2: A Business Plan for Purpose Post-retirement, I built a 10-year business plan to help others find career success and satisfaction. The plan includes scaling my impact and reaching 1 million people. Like all good long-term plans, this one evolves, but the overarching vision stays constant. Plan 3: See the World I made a list of everywhere I wanted to go and started planning travel around those dreams. Galapagos. Iceland. Switzerland. This is my “active years” travel plan, and it only works because of Plan 1—financial freedom. But you don’t need to be wealthy to travel, just committed to a plan. Budget, partner with others, and get creative. Plan 4: Be Healthy at 95 This is the longest-range plan I’ve made. Inspired by Dr. Peter Attia’s concept of the “Centenarian Decathlon,” I mapped out what I want to be able to do at age 95 and then worked backward. If I want to lift a grandkid off the floor at 95, I need to be strong enough today. The details of each of these plans are in my newsletter. But before I link that, I want to give you some specific tips to create powerful long term plans: 1. Decide what area to focus on (my four plans were financial, business, travel, and health) Trying to create a single holistic life and career plan at this scale is likely too complex. Take it on in pieces. 2. Figure out where you want to be in 5, 10, or 40 years. What is the ultimate goal. 3. Work backwards from the end as well as forward from where you are. Meet in the middle. 4. Iterate. You can draft the plan all in one sitting, but these plans benefit from periodic revision. I have clarified, updated, and changed all of my plans once to twice a year. The end goals have rarely to never changed, but the next steps and priorities within the plan definitely do. 5. Be flexible. The plan exists to help you, not to constrain you. Link: https://buff.ly/03hEvz2 Readers—share your long-term plans.

The Chickens Comes Home to Roost Choosing the right Private Credit investment manager should be symbiotic with one’s strategic investment approach, and this choice provides the chance to significantly enhance your portfolio’s long-term success. Here’s why: - By focusing on Direct Lending to strong Private Equity sponsors, the Direct Lending manager is tapping into businesses with oversight/governance from their PE-led Shareholders/Board who have a proven track record and strong financial alignment; PE Sponsor owned companies have a far lower default/loss rate than non-sponsor owned companies, ~2x the loss rate for non-sponsor deals in 2024 (go with PE-Sponsors!) - Adding tight covenant protection ensures that even in challenging market conditions the lender has a seat at the table to ascertain/discuss important business considerations. - The Direct Lender should have an in-house, seasoned workout team that provides invaluable expertise to mitigate defaults/losses as result of unforeseen events. - A conservative lending approach rules the day, always prioritize capital preservation. - Senior secured loans with low Debt-to-EBITDA ratios (<5x) and LTV below 50% provides a conservative starting point on Day 1. Ask your Direct Lending managers these 3 key questions: 1. How many non-accruals do you have in your portfolio (to identify defaults right around the corner)? 2. How many PIK interest loans do you have in your portfolio (manager amendments granted to minimize run-rate cash burn if interest were paid current might lead to a default later)? 3. What’s your default rate/loss rate? I point this out after reading KBRA’s credit report for DL (see table below), which shows higher default rates forecasted in 2025 for DL—a stat that I find a little surprising since HY Bonds and BSL default rates are expected to decline. Bottom line: cracks below the surface may sit with select lenders who have a growing list of non-accruals and PIKs within their portfolio. Interest rate relief has proven beneficial for most companies since the Fed effectively reduced SOFR rate by 100bps since mid-September ‘24. Now that debt relief (lower base rate) has arrived, 95% of the borrowers are feeling relief. As the economy slows, underwriting assumptions must be more rigorous, as my preference in DL is to lend to non-cyclical businesses, domestic companies that are not susceptible to international trade/tariffs. It's the Golden Era of Credit: Investors recognize Cash Flow is King. The best/most reliable cash flow is Private Credit. The key is to choose a conservative, established, experienced credit manager(s) that delivers low loss rates with a healthy Net IRR & MOIC.

Nuclear funding startups got enriched in Q2'25. 2025 funding to nuclear startups has already passed 2024 levels and is on track to more than double YoY. The surge in nuclear technology investments is creating what many see as a nuclear renaissance. What's fueling the nuclear boom? 1) AI and Data Center Energy Crisis The primary catalyst is the explosive growth in AI-driven energy demand. US data center power consumption is projected to triple from 25GW in 2024 to over 80GW by 2030, creating a $500B power infrastructure gap. Between 2023 and 2028, data centers could drive nearly half of US electricity growth. Tech companies are responding with unprecedented nuclear investments and investment activity has exploded across nuclear sectors: →SMR funding: 2025 equity funding is on pace to match 2022's record year, driven primarily by tech companies seeking reliable AI power →Fusion investment: The sector has attracted over $6.4B in equity funding since 2020, with tech companies leading recent rounds →Defense applications: Nuclear-adjacent defense tech reached a record $11.1B in funding within the first two quarters of 2025 Nuclear offers unique advantages that renewable sources can't match: →24/7 reliability: Unlike intermittent solar and wind, nuclear provides consistent baseload power essential for AI operations →Carbon-free energy: Meets corporate sustainability goals while delivering massive scale →Energy independence: Reduces reliance on volatile energy markets and geopolitically sensitive supply chains 2) Supply Chain Urgency Supply chain bottlenecks are forcing companies to secure nuclear capacity early. NuScale Power and TerraPower have delayed first plant deployments to 2030 due to high-assay, low-enriched uranium (HALEU) fuel shortages, pushing companies to secure supply agreements proactively. 3) Proven Commercial Viability Nuclear technologies are demonstrating commercial success through medical applications, building investor confidence. SHINE Technologies successfully produces medical isotopes using fusion technology, while TerraPower Isotopes contracts with pharmaceutical companies for cancer treatment materials. 4) Government Policy Support Robust government backing includes Centrus Energy's $3B Department of Energy contract for domestic HALEU production, and the DOE's Advanced Reactor Demonstration Projects providing $2B to TerraPower and $1.2B to X-energy. This convergence of AI-driven demand, tech company capital, supply chain pressures, and policy support is creating the most favorable environment for nuclear investment in decades. *Data from CB Insights’ State of Venture Q2’25 report. Explore the latest data on what happened last quarter across the startup ecosystem at the link in the comments.

I am so sick of the term ROI, particularly when it comes to CX. It's limiting and so short-term. Let's talk about how CX can deliver business value instead (revenue, efficiency, culture). Here’s where/why ROI might not always be the best fit: 1. Long-Term Investments Some investments are just strategic and require a long-term perspective to realize their full benefit. For example, transforming organizational culture might involve upfront costs that don't yield immediate financial returns. Focusing solely on ROI could discourage investment in initiatives that are crucial for long-term sustainability and competitive advantage. 2. Innovation and Experimentation Innovation often requires experimenting with new ideas, technologies, or business models, where the outcomes are uncertain. A strict adherence to ROI can stifle innovation because it tends to favor investments with clear, predictable returns. By focusing only on ROI, companies may miss out on opportunities to innovate and adapt to changing market conditions. 3. Holistic Value Creation Sometimes, the true value of an investment isn't captured by measuring direct returns but by its overall contribution to the company's objectives. This might include achieving regulatory compliance. The benefits are crucial for the business but may not be directly reflected in ROI calculations. 4. Cost of Opportunity Don't overlook the opportunity costs of not pursuing certain initiatives. Investments that offer adaptability in rapidly changing industries might have a lower immediate ROI but can provide significant value in terms of strategic positioning. I see this a ton in companies evaluating CX initiatives. What's the alternative? I think it's focusing on Business Value. What does this involve? Value Realization Frameworks: Implementing frameworks that assess the total impact of an investment, including financial, customer, employee, and operational impacts. Balanced Scorecard: Using tools like the Balanced Scorecard to evaluate performance across multiple dimensions, not just financial outcomes. Value Dashboards: Creating dashboards that track a variety of key performance indicators (KPIs) or Objectives & Key Results (OKRs) that reflect both short-term and long-term value creation. Shifting the focus from ROI to broader business value allows companies to align their investments more closely with strategic objectives and sustain competitive advantage in the long term. This approach also supports a more comprehensive evaluation of how initiatives contribute to the overarching goals of the organization vs. the short-term mentality that ROI can sometimes enable. How are you measuring value at your company? Or are you still stuck on ROI? #customerexperience #roi #returnoninvestment #ceo #cfo

Many of us have heard about how 𝐅𝐚𝐦𝐢𝐥𝐲 𝐎𝐟𝐟𝐢𝐜𝐞𝐬 make great investment partners due to their “𝐩𝐚𝐭𝐢𝐞𝐧𝐭 𝐜𝐚𝐩𝐢𝐭𝐚𝐥”, but we have yet to explore the concept of “𝐩𝐞𝐫𝐦𝐚𝐧𝐞𝐧𝐭 𝐜𝐚𝐩𝐢𝐭𝐚𝐥”. Let’s break down why this approach is transformative for 𝐛𝐨𝐭𝐡 investors and companies. 👥 𝐏𝐞𝐫𝐦𝐚𝐧𝐞𝐧𝐭 𝐜𝐚𝐩𝐢𝐭𝐚𝐥 offers a flexible, long-term investment strategy, allowing investors to provide continuous support to companies throughout their growth journey. Unlike 𝙋𝙧𝙞𝙫𝙖𝙩𝙚 𝙀𝙦𝙪𝙞𝙩𝙮 𝙁𝙞𝙧𝙢𝙨, which often require a quick exit, 𝙁𝙖𝙢𝙞𝙠𝙮 𝙊𝙛𝙛𝙞𝙘𝙚𝙨 can focus on long-term success and sustainability without the pressure to exit within a specific timeframe. 💪🏼 𝙄𝙛 𝙖 "𝙁𝙖𝙢𝙞𝙡𝙮 𝙊𝙛𝙛𝙞𝙘𝙚" 𝙞𝙨 𝙖 𝙣𝙚𝙬 𝙘𝙤𝙣𝙘𝙚𝙥𝙩; Here’s a few reasons why they make such good investment partners: 💎 𝐒𝐭𝐚𝐛𝐢𝐥𝐢𝐭𝐲: Family offices can weather market fluctuations and economic downturns more effectively. 💎 𝐒𝐭𝐫𝐚𝐭𝐞𝐠𝐢𝐜 𝐃𝐞𝐜𝐢𝐬𝐬𝐢𝐨𝐧𝐬: Without needing to sell investments quickly, they can focus on long-term goals, like spending on big projects, buying other companies, or investing in new technologies. 💎 𝐒𝐮𝐩𝐩𝐨𝐫𝐭: Companies get the time and resources they need to grow, without worrying about being forced to sell, leading to better returns over time. As more investors recognize the value of permanent capital, we are witnessing a new urgency for Family Offices to raise their profiles and step up as leaders in the investment world. This shift towards permanent capital strategies represents a significant evolution in how investments are approached, offering solutions to the limitations of traditional private equity. By embracing permanent capital, Family Offices are not only enhancing their own competitive edge but also providing companies with the stable, long-term support needed for sustained growth and success. Together, we can look forward to a future where investment partnerships are built on the foundation of patience, stability, and strategic vision. 🌟 #familyoffice #familyoffices #permanentcapital #longterminvesting #sustainablegrowth #investmentstrategies

Which Sectors in Real Estate Are Family Offices Likely to Invest in Now? As family offices consider where to allocate their capital, real estate remains a primary focus. Its tangible nature, potential for steady income, and ability to hedge against inflation make it an attractive asset class. However, the specific sectors within real estate that capture family office interest are shifting based on evolving market dynamics, long-term goals, and generational priorities. Family offices are increasingly focused on specific real estate sectors that align with their long-term goals and investment strategies: 1. Multifamily Housing: A preferred sector due to stable cash flows and growing demand in both urban and suburban areas. There's also rising interest in affordable housing, driven by both impact investing and market needs. 2. Industrial and Logistics: The e-commerce boom continues to drive demand for warehouses and distribution centers. Family offices are particularly interested in last-mile delivery properties. 3. Medical and Life Sciences: Healthcare-related properties offer stability and long-term leases, making them attractive. The aging population also drives demand for senior living facilities. 4. Hospitality: With the rebound in travel, there’s renewed interest in hotels, resorts, and unique experiential properties. 5. Office Space: Investments focus on flexible office solutions and properties with strong sustainability credentials, adapting to hybrid work trends. 6. Student Housing: Consistent demand, resilience during economic fluctuations, and long-term leases make student housing appealing. It also offers opportunities for global diversification. Investment Strategies - Family offices leverage their significant capital and long-term perspective through: 1. Direct Investments and Partnerships: Direct control and flexibility in niche markets are key benefits, often complemented by strategic partnerships. 2. Value-Add and Opportunistic Strategies: Higher returns are sought through investments in properties needing redevelopment, with a focus on market timing. 3. Long-Term Holdings and Legacy Projects: Real estate is used to preserve wealth across generations, with a focus on long-term capital appreciation and legacy-building. 4. Geographic Diversification: Family offices are increasingly investing globally, partnering with local experts to mitigate risks and tap into emerging markets. Family offices remain committed to real estate, leveraging their unique advantages to navigate and capitalize on market opportunities. #familyoffice #familyoffices

Private Thoughts from My Desk…………. #16 Recently there was a lot of momentum around so-called long hold funds. Some even deemed long hold an asset class in and of itself. The rationale for holding assets longer seems sensible. If you find a good business, keeping it longer and compounding growth solves a bunch of problems. First, it avoids paying fees and taxes when the asset is sold earlier. Second, it avoids cash drag by keeping capital productively invested. Lastly, it allows all investors (GPs and LPs) to maximize value of any investment by optimizing exit timing (see figure 1 below). As a check on how pragmatic this strategy might be, we looked to see if we could find companies that had had 3 or more PE owners in a row. We identified over 500 of these companies across all sectors (see figure 2 below). So, if the economics work, and there are hundreds of examples of companies compounding value for many years, long hold funds must be taking over the world, right? Well, not exactly. Some funds are performing well, earning IRRs in the 20s with attractive MOICs, and AUM is growing. But performance varies a lot, with other funds mired in the mid-single digits. Why? Well, it turns out that asset selection and portfolio construction are absolutely critical in getting a long hold strategy right, and different players have employed very different approaches. Companies, like bonds, have duration risk. Selecting assets that will truly compound for the long haul across a variety of micro and macro scenarios can be challenging. You need to start with a core set of beliefs.  Is this a market leader? Is the business on a secular penetration curve that will last?  Are there durable opportunities to build scale or scope?  And how can we analytically prove these contentions? These are some of the crucial questions to ask in asset selection. Then there is embracing the reality that despite best efforts, you aren’t going to be right 100% of the time. That means you won’t be holding every investment for 10-15 years. Dogmatically constructing your portfolio this way is a sure path to underperformance. If a GP gets the buy wrong or conditions suddenly change, they need to exit, even if returns are lackluster.  Other investments, when re-diligenced, reveal the next 5 years will be less attractive than the first 5.  There is no shame in taking a profit if that is the right time to sell.  Then of course, there are winners that will indeed be held for the long haul and deliver tremendous returns. A disciplined exit and underwriting approach means that average duration for a long hold fund might be 7-8 years……… and that’s OK. The objective is to maximize value, not to simply hold everything for a long time! There are other reasons that longer hold strategies can succeed or fail, but the first places to look are asset selection and portfolio construction if you are kicking the tires. #privateequity #privatethoughtsfrommydesk

Most people don’t fail to become wealthy because they’re lazy. They fail because they never built a system that scales without them. If you want to build lasting wealth, you need three layers working in sync: → A stable income engine (cash flow) → A personal capital strategy (allocation) → And a discipline system (automation + review) This chart breaks it down well. Wealth is the output of how well someone manages three types of capital: → Human capital (what you know and can earn) → Asset capital (what works even when you don’t) → And cash flow (what comes in, and where it goes) The people who build sustainable wealth don’t wait until they “make enough” to get disciplined. They get disciplined early because systems scale faster than willpower. Here’s the rough model that holds across industries: → 50% of income goes toward daily living (no inflation creep, no status chasing) → 20% is saved consistently, not emotionally → 30% is invested automatically, every month, without overthinking timing Once capital starts compounding, the question becomes how it’s deployed. That’s where two paths show up: → Active investing: direct control, more risk, more effort: businesses, real estate, startups, crypto, equity → Passive investing: diversified exposure, low time input: index funds, ETFs, lending, hedge vehicles Neither is better. But the people who win long-term usually understand the difference and stay consistent with their mix. Some of my best returns came from investments I barely touched. And some of my worst came from deals I “had a good feeling about.” Here’s a blueprint you can actually apply: 1. Build a simple money flow system → 50% living (cap lifestyle creep aggressively) → 20% saved (automate this weekly) → 30% invested (put on auto-transfer) If your income is low right now, keep the ratios. Just start small and scale proportionally. 2. Pick one asset category and go deep → Don’t try to master stocks, real estate, startups, and crypto at the same time → Choose what fits your risk tolerance, schedule, and curiosity → Go deep enough to see through noise, not just follow trends 3. Build a monthly financial dashboard → Track inflow, savings, investment growth → Set thresholds (example: when cash reserves hit 6 months, deploy overflow) → Review once a month 4. Use your income to buy back time → Hire help to protect your focus → Delegate low-leverage tasks → Use cash to build systems, not just buy convenience 5. Lock in the boring habits → Schedule a quarterly review: income, burn, assets, targets → Rebalance your allocations once a year → Automate 90% of this so you don’t need to “feel ready” to do it Reminder: The difference between people who get rich and people who stay poor often isn’t information. It’s the systems they build around their behavior. #wealthbuilding #moneyhabits #investing #richmindset #millionairemindset #financialindependence #leverage