Busy couple of weeks on results front
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Ha - I was just looking at the figures when you posted.
Your expectation of $.81/share on $35bn was spot on. Bravo. All nicely above NVDA's own forecast and also above Wall Street expectations.
And yet the shares dropped more than a percentage point on the news. I guess you'll be telling us (again) that markets are irrational!
I notice that The Orange One has been making noises about wanting chips to be made in the US and clobbering imports from Taiwan (i.e TSMC NVDA chips) with tariffs. Something to be worried about?
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Hi O,
The stock market will always react to a short lived event. Our job is to identify opportunities backed up by credible quantitative research and continue to test this thesis against actual company performance. Occasionally you have to give the company the benefit of the doubt. Not with Nvidia.
You would be hard pressed to find a credible argument against them. There are plenty of opinions but they are mostly what I would call 'throw away'. Competition is coming, margins won't be maintained, AI is hype, no monetisation. The one thing these all have in common is they are all untrue.
The facts are they dominate the industry, in fact it's almost a monopoly but more importantly, they create new markets, new opportunities.
You will find the vast majority of detractors are simply envious, that they missed out, were wrong (Cathy Wood), never held the stock or sold a long time ago. They are still spouting the same opinions as facts but don't forget, they've been at it since $35/share. And at the same time we were just lucky?
The facts are, the biggest companies in the world have decided they will invest trillions in the pursuit of AGI. Masa Son, CEO of Softbank, who is considered transformative figure in the tech industry and if anyone is qualified to form an opinion, he is, considers that we need $10T in spending to reach AGI over the next 8 years. I don't need to agree with him or work out where the money is coming from. All I need to know is that the end goal is bold, it is huge and it will continue for the next several years. And when i look at the companies performance today, the numbers stack up re their valuation. This coupled wit their growth rate and known roadmap also tells me that there is a lot of growth to come.
Regards
Adam
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I didn't deal with the Tariff/Trump comments. Firstly, has he said that 'I will raise tariffs on AI chips from Korea' or is it the media speculating, again.
Tariffs are put in place to protect local industry. For the US, I can imagine, cars, heavy industry, food. Reading Trumps pre election pledge '60 to 100% on ALL Chinese goods and 10-20% on every other product from all other trading partners.' Does that worry me? No.
The US does not currently manufacture these chips. They will within 3-4 years via TSM Texas fab. The tariff, if any will only be passed on to customers. The main users of the technology are US based interests. It makes no sense to hurt your own economy and hurt his very good friend Elon Musk, a big buyer of said chips.
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A useful summary if the past 2 years
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Thanks Adam. All good and sensible stuff. Keep it coming!
Comments about detractors are interesting, and probably spot on the money. I happened to buy $5k's worth of NVDA shares about 30 months ago (directly, via Charles Schwab), not really knowing what I was doing. Someone at the time commented that they had sold all of theirs and I almost had cold feet about it on the basis of the comment. In retrospect I am very glad that I didn't!
Keep 'em coming. (Helpful comments and profits alike!) Thanks again.
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It's nice to see some admit their folly.
Druckenmiller, who admitted that he didn’t know how to spell Nvidia, bought shares in fourth-quarter 2022 at the urging of his partner.
He had picked up the stock just one month before OpenAI unleashed the AI chatbot ChatGPT on the world. He said, “Even an old guy like me could figure out what that meant, so I increased the position substantially.” Druckenmiller is something a legend in investment circles.
He managed money for the investor and philanthropist George Soros from 1988 to 2000 as the lead portfolio manager for Quantum Fund.
Their most celebrated play was a bet against the British pound in 1992. Commentators said they “broke the Bank of England," reportedly hauling in $1 billion in the process. "I like putting all my eggs in one basket and then watching the basket very carefully," Druckenmiller once said.
He said he cut Duquesne Family Office’s position in Nvidia in late March, saying he needed a break.
"I’ve made so many mistakes in my investment career," he told Bloomberg last month. "One of them was I sold all my Nvidia (shares). ... I own none. ... It was a big mistake in terms of AI."
What does that have to do with the price of eggs?
Well, Nvidia, which reported earnings after the market closed on Nov. 20, recently overtook Apple AAPL to become the world's most valuable company. And Nvidia's stock has climbed nearly 193% from a year ago."I think Nvidia is a wonderful company and were the price to come down we would get involved again, but right now I'm licking my wounds from a bad sale there," Druckenmiller said.
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The sale he mentions, netting a gain of over $1B I might add. When news broke of the sale it actually moved the stock down 10%, such is the impact of big named investor/traders. He sold at $93. You will read 'news' every day, mostly designed to influence your investment decisions. Most investors come from a position of fear, fear of losing money, so it doesn't take much to sway you. And in my experience the biggest hurdle to overcome for an individual is to deal with or filter out the noise. What is more fact than fiction.
People buy and sell the same stock every day and for completely different reasons. Did Stanley above sell because he thought it fully valued. Unlikely. He sold because he was up $1 Billion and in his own words 'he needed a break'.
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Netflix has broken through $900. An all time high. I will post an update tomorrow outlining the companies competitive advantage. The stock has performed exceptionally well and it has been watched very closed and actively managed to capitalise on the growth.
Regards
Adam
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Morning,
A few returns to Nov mend.
PHE +18.96%-since our changes to the model weights, the portfolio has performed very well. Now materially exceeding Fundsmith which has achieved 10.76%.
PHT +44.17%. Materially exceeding its benchmark by well over 50% and I often look at Nest Sharia as a comparison which has achieved +26.38%. Compare this to Fidelity Global tech which has only achieved +18.9%, quite poor given the benchmark performance of close to 30%.
Index 100 at 19.88% having also performed very well. No doubt do to its US biasIMOP Income+13.07% and Global growth +16.05%
Lifestyle Growth, our flagship is +33.09% continues to excel
Some great numbers as we look to close out the year
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HI O,
The figures are YTD (11 months), after fees and IMOP is Optimum
Regards
Adam
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Great work and much appreciated here.
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The Bells of Santa are chiming. Buoyed by the resignation of the Intel CEO and a flurry from Tesla, the Nasdaq and SP500 hit all time highs. It's the biggest day we have seen from Tech and Lifestyle for a while with gains so far > 280bps on tech and close to 200 on Lifestyle, thanks in part to SuperMicro which is +33% today. Meta and KLAC also posted outsized gains today and apple also hit an ATH
Regards
Adam
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