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Here’s How Atai Capital Used Alphabet (GOOG) To Explain Price Volatility

Atai Capital, an investment management firm, recently released its third-quarter 2023 investor letter. A copy of the same can be downloaded here. The fund declined by 5.8% in the third quarter which brought year-to-date (YTD) returns to 6.5% net of all fees, compared to a 13.1% total return for the S&P 500 YTD and a 2.5% total return for the Russell 2000 YTD. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.

Atai Capital highlighted stocks like Alphabet Inc. (NASDAQ:GOOG) in the Q3 2023 investor letter. Headquartered in Mountain View, California, Alphabet Inc. (NASDAQ:GOOG) is a multinational technology company. On November 30, 2023, Alphabet Inc. (NASDAQ:GOOG) stock closed at $133.92 per share. One-month return of Alphabet Inc. (NASDAQ:GOOG) was 2.72%, and its shares gained 32.82% of their value over the last 52 weeks. Alphabet Inc. (NASDAQ:GOOG) has a market capitalization of $1.667 trillion.

Atai Capital made the following comment about Alphabet Inc. (NASDAQ:GOOG) in its Q3 2023 investor letter:

"On average, individual stocks experience fluctuations of around 80% in any given year. When we pause to contemplate the fact that every share represents a fractional ownership in an underlying business, this notion that the fundamental value of most enterprises undergoes such substantial swings in a single year is nothing short of ludicrous. Moreover, volatility also disregards price and valuation entirely. For example, in theory, Alphabet Inc. (NASDAQ:GOOG) at $500 could have the same Beta (a measure of volatility) at its current price of $130. In this example, it doesn't take much common sense to recognize the flaw of using volatility as a measure of risk. Google is undoubtedly a great business, but at $500, it would be significantly more expensive than it is today, carrying a higher level of risk and lower prospective returns. The inverse scenario is applicable here as well, and If Google were to experience a swift 50% decline, a professor would likely tell you it’s now riskier, but I would argue that Google at $65 would represent a remarkable bargain today!"

Alphabet Inc. (NASDAQ:GOOG) is in 6th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 163 hedge fund portfolios held Alphabet Inc. (NASDAQ:GOOG) at the end of third quarter which was 152 in the previous quarter.

We discussed Alphabet Inc. (NASDAQ:GOOG) in another article and shared Artisan Select Equity Fund's views on the company. In addition, please check out our hedge fund investor letters Q3 2023 page for more investor letters from hedge funds and other leading investors.


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Disclosure: None. This article is originally published at Insider Monkey.