Guy Spier, value investor, avoids Nvidia due to high valuation; holds Micron instead

Renowned value investor Guy Spier, inspired the investing principles of Warren Buffett, has revealed that he does not own Nvidia and has no plans to invest in the stock. Spier believes that Nvidia is currently too expensive and advises staying away from it. He argues that in investing, it is not always the fastest horse that is the best bet, as price matters. Spier describes Nvidia’s valuation as a “nosebleed valuation,” indicating that there is limited room for growth at its current price.

Instead, Spier holds a different chip stock in his portfolio: Micron. He views the memory chip industry as a consolidating market with only four major competitors. Spier believes that the reduced capital expenditure and technological development in the sector will lead to a stable or even growing profit pool, driven increasing demand for chips. He suggests that competition in the memory chip market will likely decrease, facilitating a potentially stable profit pool that will benefit the existing players. Spier also mentions the possibility of further consolidation in the industry.

Spier’s Aquamarine Fund, which was established in 1997, has delivered an annualized return of 9% since its inception, outperforming major indices such as the S&P 500, MSCI World, and FTSE 100 indices. This success is attributed to his adherence to Warren Buffett’s investment principles.

Source: CNBC Pro Talks, Aquamarine Fund.

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