Summary List Placement
- Chamath Palihapitiya could be the next Warren Buffett, according to investor Josh Brown.
- “He has that aura about him,” the Ritholtz Wealth Management chief said on “The Compound.”
- Like the Berkshire Hathaway boss, Palihapitiya excels at sourcing funds and has a strong track record.
- Visit Business Insider’s homepage for more stories.
Billionaire investor Chamath Palihapitiya might just be the next Warren Buffett, investor Josh Brown said on “The Compound” YouTube channel this week.
“I think he’s the new Buffett,” the Ritholtz Wealth Management chief and “How I Invest My Money” co-author said. “He has that aura about him.”
“He’s not there in dollar terms yet, but he seems to have figured out a lot of things before other people and he’s executing very well,” Brown added.
Palihapitiya is a former Facebook executive, the founder and CEO of Social Capital, and a minority owner of the Golden State Warriors.
He specializes in using special-purpose acquisition vehicles (SPACs) to take companies public. He counts Virgin Galactic, Opendoor, Clover Health, and SoFi among his deals to date.
Like Buffett, Palihapitiya has “figured out how to have the zero cost of capital and the endless money coming in and everything he touches turns to gold immediately because he’s had past success,” Brown said.
Buffett is never short of funding for investments thanks to his Berkshire Hathaway conglomerate. He takes the cash thrown off by subsidiaries such as See’s Candies, as well as the “float” (the difference between premiums and claims) from Geico and his other insurance businesses, and invests it elsewhere in the company, or in public markets to generate higher returns.
Moreover, many investors trust Buffett’s decisions and follow him into the stocks he buys, bumping up their prices and making him more money.
Palihapitiya has also shown a knack for raising and deploying funds, and his future SPACs are likely to benefit from the halo effect of his past ones.
It’s not too surprising that Palihapitiya is drawing comparisons to Buffett, given he’s modeling his company on the famed investor’s conglomerate.
“My ambition is to be our generation’s Berkshire Hathaway,” Palihapitiya told Fortune last year.
He envisions Social Capital as “a Berkshire, a holding company that, instead of holding Gillette and Coca-Cola and McDonald’s, will hold technology businesses.”