VTOL Investment Opportunity

Scott Galloway discusses his investment in Vertical Aerospace, a VTOL (vertical takeoff and landing) company, as part of his broader investment strategy.

VTOL Investment Thesis:

• Investing in Vertical Aerospace, a UK-based VTOL company trading at $300-400 million market cap
• American competitors (Archer and Joby) trade at much higher valuations ($4-6 billion)
• VTOLs solve the "last mile" transportation problem
• Helicopters are "dirty dangerous technology that just shouldn't be around"
• VTOL advantages:
  • Electric-powered (quiet operation)
  • Can land in residential areas without disruption
  • One "can land in your backyard and you wouldn't know it's there"

Broader Investment Philosophy:

• Seeking uncorrelated positive income streams
  • Ray Dalio's principle: find 12 positive income streams that aren't correlated
  • Challenge: most assets are now somewhat correlated due to institutional diversification
• European investment focus:
  • Anticipating increased European defense spending (from 1.9% to 3% of GDP)
  • Potential for $200 billion additional annual defense spending
  • Looking for technology spillover effects that will help the tech sector
• Distressed investing has provided his best returns:
  • "The sexier an investment, the lower the returns"
  • Distressed investing "smells like piss... reeks of death"
  • His biggest win was bringing a consumer company out of bankruptcy (30x return over six years)