General News

[2BToo]

Add in the easy availability of planning, ready supply of labour, very slim H&S requirements and cheap workforce and it's no wonder at all that China is showing the UK how to do industry.

[Adam Kay]

upcoming results

[2BToo]

Upcoming budget.

[Adam Kay]

I doubt they can afford to do too much(harm) unless you're a bank, like to gamble a lot, maybe drink a lot

[2BToo]

I think two of those three apply to me ....

[Ducati996R]

Do we have Sandisk in the funds

[Adam Kay]

Hi- No we do not. The reasons are many
MU is a pure play manufacturer, Sandisk is a joint venture manufacturer (with Kioxia)
MU manufacturers both NAND and DRAM, Sandisk is solely, NAND
MU hold 3X the Nr of current patents
MU is at a scale Sandisk can never match
MU is exposed to markets growing at a faster pace

Sandisk is a good business, no doubts. I may have mentioned that I did a lot of work on it over 20 years ago when the business was run by Eli Harari and Sanjay Mehrotra (MU )

My philosophy is to pick the best of breed within a sector. EG Nvidia over AMD. And whilst AMD has appreciated more in the past year, you are now sitting with AMD on a multiple almost 4X greater(75!) but strangely with half the margins and half the growth. We will see how that plays out. Imo when people talk of bubbles this company is it.

[Ducati996R]

Would you agree Adam that there have been massive over reactions to these earnings reports this week ….

[Adam Kay]

I agree with that statement completely. There have been record earnings all round, there has been staggering guidance showing accelerated growth (ORCL/AMZN/GOOG/MSFT/Samsung/SK/SNDK)-the common denominator being vast capex and even more next year. Same old interpretation.

In short the future prospects are definitely looking much better yet the stocks are now cheaper. This disconnect won't last imo. They never do.

Are we to believe that the heads of the biggest companies are somehow stupid. Their PNLs and backlog tell you otherwise. Someone is stupid in that mix but is aint them

[2BToo]

The Orange One has been given a bloody nose in the midterms; midterms always do that to sitting presidents but this seems a bit more messy than they normally are.

What impact does this have on investments? Any at all? (I notice that things looked a bit rosier yesterday after a bad end to last week, but the IM funds only moved a smidge today. Maybe there is more to come.)

[Adam Kay]

Hi O,

I wouldn't read too much into the midterms from an investment perspective. Historically, markets have generally performed well in the 12 months following midterm elections, irrespective of which party controls Congress.

A weakened Trump administration could actually be positive for markets, particularly if it reduces the scope for further disruptive policy decisions. Political gridlock is not necessarily a bad thing for investors.

Ultimately, corporate earnings, interest rates and economic growth will determine market direction, not the election results. In particular, the structural growth in AI and associated infrastructure spending is unlikely to be materially affected.

The facts remain that over the last 2 quarters the earnings and guidance of our holdings have hit records whilst prices have moved sideways. Multiples are at historical lows too. It's a disconnect which always corrects.