Gaurav Kapadia on New York City, Investing, and Contemporary Art

Kapadia explains how Queens succeeded despite limited new infrastructure through existing transit hubs and housing density. He advocates for building more housing, discusses the unnatural borders between NYC boroughs, and argues America would benefit from a relatively smaller New York with stronger middle-country cities.

• •Queens grew by leveraging existing infrastructure like the 7 train and adding housing density near transit hubs
• •NYC borders are illogical - Staten Island should belong to New Jersey, Long Island to Queens connection is unnatural
• •America would be better served by a smaller NYC relative to country size, with more population density in middle America
• •As dictator of Flushing, would focus on building more housing and increasing density by replacing old single-family homes

Discusses why Mike Bloomberg is the most underrated NYC mayor despite low popularity, and identifies structural problems preventing quality mayoral candidates including off-year elections, June primaries with low turnout, and candidates' assumption they can't win.

• •Bloomberg is most underrated mayor - low popularity but massive long-term impact on the city
• •NYC mayoral primaries in June with off-year elections allow winning with just tens of thousands of votes in a city of millions
• •Quality candidates don't run because they assume races are predetermined - recent elections proving anyone can win
• •Most critical non-obvious quality for mayors: optimism, which is extraordinarily scarce among candidates

Kapadia explains XN's approach of holding only 10-15 public positions with long holding periods, focusing on sectors where they can be the best in the world. Excludes healthcare entirely due to regulatory and scientific complexity, emphasizes obvious-in-retrospect investments that are hard to make in real-time.

• •XN holds only 10-15 public investments because there are very few truly good ideas - adds only 1-3 new positions per year
• •Completely excludes healthcare sector - no chance of being best-in-class due to regulatory and scientific research requirements
• •Focus on sectors with transparency: industrials, media, certain technology areas where business analysis and logic can generate differentiated conclusions
• •Investment thesis: articulate extremely good risk/reward with bounded downside and potentially unbounded upside that can be forecasted

Details the Figma investment after Adobe acquisition was blocked - bought at half Adobe's offer price with significant break fee on balance sheet. Discusses two types of investment errors: unpredictable wins for wrong reasons (don't lose sleep) versus passive decisions from distraction (continuous improvement focus).

• •Figma opportunity: half the price Adobe would pay, significant net cash from break fee, best-in-class asset with founder-mode leader
• •Attractive asymmetry: strong balance sheet, high confidence in growth rate, confidence in leadership navigating complexity
• •Two error types: stocks that worked for unpredictable reasons (acceptable) vs. passive decisions from being too busy (need to fix)
• •Super high bar for investments - only adding 1-3 ideas to portfolio annually with long holding periods

Explains how founder energy applies to investment organizations, emphasizing entrepreneurial culture and continuous reinvention. Describes hiring philosophy beyond resume and GPA - looking for 'good enough plus something special' including curiosity and ingenuity, maintaining high bar for all 50 employees including non-investment roles.

• •Best investment firms (Sequoia, Andreessen, Blackstone) have entrepreneurial founder energy despite low barriers to entry creating mediocrity
• •Culture starts at top - if founder gets lazy, it seeps through organization; must keep 'rope tight' with rigor and kindness
• •Hiring philosophy from David Chang: must be 'good enough' technically, then look for extra spark of curiosity and ingenuity
• •Maintain equally high bar for all roles - investment and non-investment professionals - creating energy and dynamism across 50-person firm

Defends open plan office as critical for interconnected world where software, power, and semiconductors must be analyzed together. Discusses AI's dual impact: better/faster initial company analysis freeing analysts for judgment, and improving legal/compliance/operations quality of life. Skeptical of headline-generating AI spending claims.

• •Open office enables Socratic method and cross-pollination - essential when analyzing interconnected topics like software, power, semiconductors together
• •AI will provide massive leverage for initial company evaluations, allowing analysts to focus on applying judgment and taste to facts
• •Within one year, expect custom tooling to fundamentally change how investing works - Julian Robertson wouldn't recognize the desktop
• •Most investment firms lack wherewithal for change - founder mode organizations will win AI transformation, others stuck in status quo

Explains museums as public goods financed by private capital, operating at deficits with admissions being small revenue portion. Identifies biggest mistake as letting fundraising override mission and allowing donor influence on programming. Advocates for displaying more than the typical 1% of archives shown.

• •Museums are public goods largely financed by private capital - almost all operate at deficits with small admission revenue
• •Inflation and funding pressures increasing need for deaccessioning and major donor fundraising
• •Biggest institutional mistake: allowing fundraising to override mission and donors to overly influence programming and community
• •Only 1% of most museum archives ever displayed - huge opportunity to bring more works to public digitally and physically

Kapadia fell in love with art before investing, started serious collecting at 29 with specific criteria: American artists of his generation (±20 years). Emphasizes art as intellectual exercise, not asset class. Discusses artists like Rashid Johnson (intellectual complexity, risk-taking) and Salman Toor (technical virtuosity, painting from memory).

• •Started collecting when broke, got serious at 29 with clear criteria: American artists within ±20 years of his age (now 44)
• •Art is intellectual pursuit exercising judgment and taste, not an asset class - develops soft skills applicable to all domains
• •Rashid Johnson: visually arresting, intellectually complex work about anxiety and insecurity, constantly takes risks beyond comfort zone
• •Salman Toor: technically one of most talented painters ever, paints entirely from memory with old masters technique on contemporary subjects

Discusses how every artistic period seemed unclear at the time but winnowed to key names. Sees coalescence happening now around smaller group of artists. Predicts Dana Schutz, Rudolf Stengel, Christopher Wool, Rashid Johnson, and Salman Toor as likely canonical figures. Notes current mega-reset eliminating mediocre work and galleries.

• •Every period had Cambrian explosion that winnowed down - always unclear in the moment who would be most important
• •Already seeing coalescence around smaller group of names as commercial and critical aspects separate
• •Dana Schutz likely canonical: important painter, pushed boundaries, smart, cerebral, talented - probably underrated for this trajectory
• •Art market in mega-reset: mediocre works and galleries exiting, leaving higher quality and fidelity - concept of 'value' complicated when art isn't asset class

Launching Totei (totei.com) to celebrate craft across all domains - standup comedy, design, quilt-making, anything requiring dedication to excellence. Digital version late 2025, physical magazine 2-3 times yearly. Concept resonates broadly because everyone who takes pride in their craft feels seen when spotlight shines on other craftspeople.

• •Totei celebrates dedication and craft across all fields - not just traditional crafts but standup comedy, design, any pursuit of excellence
• •Digital format launching late 2025, physical magazine 2-3 times per year (heavy lift to ensure quality matches subject matter)
• •Almost everyone at high level appreciates dedication and craft, but far fewer resources exploring the art of getting really good at something
• •Concept super resonant across college students, comedians, artists, investors - craft is investing, everyone feels seen when craftspeople are spotlighted

Despite aggregate pessimism from COVID aftermath, economic inequality, and global turbulence, Kapadia sees positive inflection point. AI will drive shift from pessimism to optimism through increased knowledge and decreased drudgery. Plans to learn about practical policy implementation in local, state, and federal government to push progress forward.

• •At positive inflection point despite widespread pessimism from COVID, economic complexity, global turbulence, declining reading/relationships
• •Huge reasons for optimism as American - ways to improve versus just complain are entering mainstream discourse
• •AI's main proximate effect highly optimistic: increased knowledge access, decreased non-joyful work, series of innovations ahead
• •Next learning focus: practical policy implementation in government - lost art of making things work that can push progress forward