Why I Avoid Tech Investments...Even During A Tech Boom
Submitted by QTR's Fringe Finance
I’ve long admired Harris Kupperman, the founder of Praetorian Capital, for his ability to cut through noise and spot big-picture themes before they become consensus.
He has a knack for finding opportunities where others aren’t looking, blending a sharp macro perspective with a pragmatic investor’s mindset.
In his latest, he makes his case for why he doesn’t invest in tech. I know my subscribers will benefit from his perspective and wanted to share it with you all this morning.
Why I Avoid Tech
Every time tech has one of its periodic moonshots, the same email shows up in my inbox from one of my investors. Some version of: “Kuppy, why don’t we own any of this stuff?” I’ve been mulling this over for almost three decades now, and somehow have never gotten around to writing it down. Tech just went on another legendary run, so I feel like now is the time to detail my thinking on why I’ve avoided tech over the years.
To start with, tech is a monolithic term that is used to describe all sorts of businesses that want higher multiples—yet may not have much to do with technology. WeWork was seen as a tech disruptor, while in reality, it was a prosaic leasing company that happened to utilize technology to track its tenants. I assume most multi-tenant firms also use some sort of tech to track tenants. This is neither special nor unique—though WeWork did have free kombucha. For the sake of this piece, I’m going to allow any business that wants to self-identify as ‘tech’ to exist as a ‘tech’ company.
Now that we have a definitional qualifier out of the way, why don’t I invest in tech? Put simply, they tend to be absolutely terrible businesses. While everyone looks at the success of Microsoft (MSFT – USA) or Apple (AAPL -USA), they forget about all the businesses that guessed wrong on an evolutionary fork, and became roadkill. They forget about all the tech businesses that toil away in obscurity, barely keeping their heads above water, while endlessly diluting investors. They forget about all the supposed winners, that have barely even won anything.
Let’s briefly look at Uber (UBER – USA) a business that’s clearly at scale and dominant in an oligopolistic market. In 2025, they had $5.6 billion of operating income on an invested capital base of $29.5 billion ($40.8 billion of net tangible assets – $11.3 billion of tangible current liabilities), leading to a pre-tax return of 19% on capital deployed. That’s a decent rate of return on capital, though clearly nothing special for such a dominant business.
Meanwhile, the accumulated deficit peaked at $32.8 billion in December of 2022 and was still over $10 billion as of the end of 2025. Imagine having to suffer losses of that magnitude, before finally...(READ THIS FULL COLUMN HERE).