Gary Black, managing partner at The Future Fund and a former Wall Street executive, recently sold his remaining Tesla shares, steering clients away before a selloff triggered by Elon Musk’s public spat with Donald Trump. Black had initially embraced Tesla in 2021, making it a central holding in his ETF.
However, he started reducing exposure in 2022 over concerns about Musk’s pricing strategy and erratic behavior. He finally exited at $358/share, citing overvaluation and instability, asserting that while Tesla isn’t “uninvestable,” it would need to drop significantly in price to be considered again.
Future Fund Embraces High-Growth Tech and Long-Term Thematic Investment Strategies
The Future Fund currently manages $72 million in the One Global ETF and $49 million in the Long/Short ETF. Despite Tesla’s volatility, One Global has performed well, returning 6.5% year-to-date and 15% annualized over three years. Black emphasizes long-term themes such as AI, e-commerce, and constant connectivity as guiding principles in stock selection. His shift away from Tesla is part of a broader strategy focused on undervalued, high-growth technology companies.
Gary Black Dumps Tesla Over Musk Concerns, Shifts Focus to Undervalued Tech LeadersBlack’s top long positions include Nvidia, Meta, Amazon, and DoorDash. Nvidia stands out due to its unmatched demand for high-end AI chips and a strong AI growth roadmap. Meta continues to show strong growth across Instagram, Facebook, and WhatsApp, while Amazon’s broad retail offerings and expansion into areas like prescription drugs and cars make it a favorite. DoorDash is another highlight due to its expanding restaurant partnerships and cultural shift toward food delivery.
Valuation Matters as Black Backs Undervalued Tech and Shorts Overhyped Weak Companies
Tesla remains pricey at 150x forward earnings, compared to Nvidia’s 32x and Meta’s 27x, despite stronger growth prospects in the latter two. Amazon trades at around 35x forward earnings and is considered more attractively valued. DoorDash, trading at 54x forward earnings, is also seen as reasonably priced considering its growth trajectory. Black favors companies where price-to-earnings ratios align with long-term earnings growth.
The Long/Short ETF also includes several notable short positions. Booking Holdings is one, with Black citing a lack of proprietary tech and intense competition. Another is SoFi Technologies, where he worries about unsustainable loan growth. These positions reflect Black’s broader strategy of betting against companies with weak market positions or those exposed to disruption.
Black remains bullish on the market, expecting Fed rate cuts possibly by September, though not as aggressively as Trump suggests. He remains cautious of speculative bubbles in parts of the market, pointing to overly exuberant valuations like the Circle IPO. Despite macro volatility, he sees selective opportunities for long-term gains, particularly in undervalued tech.
Key Companies in Gary Black’s Portfolio Strategy
| Company | Position Type | Forward P/E | Rationale |
|---|---|---|---|
| Tesla (TSLA) | Exited | 150x | Overvalued, volatile, Musk’s behavior a concern |
| Nvidia (NVDA) | Long | 32x | High AI chip demand, strong growth potential |
| Meta (META) | Long | 27x | Growth in Instagram, Facebook, WhatsApp; still undervalued |
| Amazon (AMZN) | Long | 35x | Diversified offerings, growing e-commerce reach |
| DoorDash (DASH) | Long | 54x | Increasing platform scale, cultural shift to delivery |
| Booking Holdings | Short | N/A | Competitive industry, weak proprietary edge |
| SoFi Technologies | Short | N/A | Concerns over rapid loan growth and risk management |
