"The construction of data centers in the U.S. has already faced significant political resistance and limitations. Ultimately, AI data centers will be built in space, presenting a massive investment opportunity," said Matthew Turtle, founder and CEO of Turtle Capital Management (TCM), during a press conference in Yeouido, Seoul, on September 8.
Turtle emphasized that Elon Musk's plan to build data centers in space is both valid and realistic, stating, "I do not bet against Elon Musk's moves as an investor."
Key to AI Growth: Addressing Bottlenecks in Photonics and Space
Turtle identified bottlenecks as the primary factors hindering the growth of the AI industry. He explained that companies solving these constraints will be the key investment opportunities leading the market.
The three main areas Turtle highlighted for resolving AI bottlenecks are: 1) memory semiconductors (HBMX, DRMP, etc.), 2) photonics, which uses lasers to transmit ultra-fast data instead of copper wires, and 3) the space industry (SPAX, SPCI) that aims to overcome the limitations of data centers.
He noted, "If data centers are built in space, related industries such as space power, transportation, logistics, and mining will experience explosive growth. Many key companies in this sector are still private, so a thematic ETF approach that identifies beneficiaries along the value chain is necessary."
Critique of Traditional Investment Strategies: Introducing H.E.A.T.
Turtle criticized traditional Wall Street investment methods while explaining his operational framework, H.E.A.T. (Hedge, Edge, Asymmetry, Theme). He stated, "Government debt levels in the U.S. and worldwide are unsustainable, and interest rates will continue to rise. With the real inflation rate in the U.S. reaching 11-12%, traditional hedging instruments like bonds are completely uninvestable."
He also pointed out the shortcomings of covered call products, which have gained popularity among Korean investors. He argued that applying covered calls to high-growth themes like AI and space limits upside potential. As an alternative, he proposed income strategies based on put credit spreads (DRMP, SPCI, MEMY, etc.) that aim for target returns of 25-35% while fully capturing stock price increases.
Korean Investment Represents 25% of TCM's Assets
Founded in 2012, TCM manages approximately $5 billion in assets and over 70 active ETFs. Turtle explained that about 25% of the funds managed come from Korean individual investors, making Korea a crucial market for the firm.
In response to recent claims by some financial authorities that single-stock leveraged ETFs are a cause of market volatility, Turtle disagreed. He stated, "Investor interest and volatility in specific stocks increased first, leading to the creation of leveraged ETFs. Even without them, investors would have sought other forms of investment, such as options or futures."
Finally, he emphasized the importance of having a unique edge and risk management in investing, stating, "Investing is about having strengths that others do not, while relying on luck is gambling. It is crucial to provide proper education to understand the characteristics of leveraged ETFs, which reset daily."
* This article has been translated by AI.
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