Barbara Kollmeyer
7 min read
In This Article:
Two weeks ago, Wall Street veteran Gary Black sold his remaining Tesla shares, helping clients sidestep a selloff driven by a public fallout between Chief Executive Elon Musk and President Donald Trump.
Black’s unease with Tesla TSLA goes back a ways. When the managing partner of The Future Fund launched the One Global ETF FFND in August 2021, he snapped up Tesla, which quickly became the biggest position. By the second quarter of 2022, he began to trim as Musk started cutting electric-vehicle prices.
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“We didn’t think that was a smart move. It turned out not to be a smart move, because they didn’t get any incremental volume,” Black told MarketWatch in an interview on Monday.
His Tesla haircuts continued, peppered by such worries as “hype around unsupervised autonomy,” and when he finally exited it completely at $358 per share, valuation had gotten “excessive.”
Tesla shares need to be priced “a lot less than they are today” for Black to repurchase. “I don’t want to call this stock uninvestable because at some price we would buy it back again, but with that level of volatility it almost makes the stock uninvestable at times,” he said, adding that Musk needs to “keep his mouth closed and focus on the business.”
Black, whose nearly 30-year career includes stints as CEO of Aegon Asset Management and Janus Capital, and his firm look after about $72 million in One Global, and the Long/Short ETF FFLS, roughly $49 million. One Global has returned 6.5% this year and 15% over three years, annualized, according to Morningstar, versus its MSCI All Country World Index benchmark returns of 7.3% and 14.3%, respectively.
Black is now focused on what he sees as big tech bargains, such as Nvidia NVDA. The company’s stock-picking process begins with “ten long-term circular mega trends,” such as e-commerce, 24/7 information technology and, of course, artificial intelligence.
“We like the AI road map in front of [Nvidia] and they still can’t make enough of their high-end AI chips. They continue to have extremely high demand for it, and they’re still capacity constrained,” he said.
