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- Hedge fund manager Daniel Sundheim of D1 Capital Partners believes Netflix stock could more than double.
- However, Sundheim was bearish on the Canadian cannabis industry, calling it the closest thing to a bubble he has seen since bitcoin.
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A year after launching his new fund, D1 Capital Partners’ Daniel Sundheim told attendees of Monday’s Sohn Investment Conference that his multi-billion-fund sees a lot of growth in "certain areas of media," specifically naming Netflix and Disney.
The two companies are the ones that Sundheim believes will lead the direct-to-consumer media companies in the future, a business that is somewhat insulated from start-up disruptors because it requires such extreme scale.
On Netflix, Sundheim believes the one-time DVD delivery company will become a "boring company" because its growth will become so consistent and steady. He predicts the company will soon trade at more than $1,000-a-share, despite trading for less than half than that right now.
"Boring can be good obviously," he said.
Despite chasing value stocks, where he pays high prices for companies that have not yet their peaks, Sundheim is very down on the Canadian cannabis industry, which "is as close to a bubble as we’ve seen since Bitcoin."
He called the valuations of many companies "absurd" and predicted a "supply glut."
"I think that sector has enormous downside," he said. "Growing marijuana is just inherently not a good business."
Beyond that, Sundheim, an alum of Viking Global who raised more than $4 billion for D1 Capital, said that he has not shorted Tesla, mostly because "Elon Musk is hard to bet against."
He also advised other investors in the audience to not sell out of companies they have conviction in. He said he was proud of investing MasterCard at its IPO and selling out once it doubled in price, only to see it grow 10 times the price it went public at.
"Great businesses don’t come around that often," he said.
"Time is your friend when you have a great business," and that you should try to "compound capital over years, not months."
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Source: Business Insider – bsaacks@businessinsider.com (Bradley Saacks)