"One fact of financial life should never be forgotten. Wall Street – to use the term in its figurative sense – would like its customers to make money, but what truly causes its denizens’ juices to flow is feverish activity. At such times, whatever foolishness can be marketed will be vigorously marketed – not by everyone but always by someone.”- Warren Buffett.
In a stern message about the current state of the equity markets, legendary investor Warren Buffett highlighted how Wall Street’s greed is once again leading to irrational prices as cheap liquidity inflates the much “touted” AI bubble.
As a result of the relentless rise in the risk assets, we did a major rebalance of the portfolio, which was a shift from our Global Outlook as the macro data and the market moves have been baffling (thus requires a timely rejig).
Despite everyone on the Street piling into very few names (equities), we remain away from the euphoria and refrain from participating in the FOMO-led rally.
Nonetheless, our Thematic Investing Bets have generated phenomenal returns.
While the two stocks under Thematic Investing Part 1&2 are up 22% and 37%, the top 2 bets under Thematic Investing Part 3 are up 40% each.
We have taken a major contrarian bet, and we are hopeful that, as a result, we will be able to generate significant alpha.
PS: Before we begin, we will increase our paid subscription prices to $24.99/M or $ 249.99/Yr in the next 24 hours.
Note that the subscribers who are currently enrolled or will enrol in the next 24 hours will be subscribed at the mouth-watering current prices ($14.99/$149.99) “FOREVER”.
So, somebody who wants to take advantage of a massive 40% discount for a lifetime can subscribe at the current prices.
Equities!
While everyone has been jumping back and forth about the AI-led rally, there has been a quiet rotation underway beneath the surface.
Well, this is why we always say that social media narratives are the most powerful and misleading.
Technology has been a stark underperformer (compared to XLY, XLI and XLB), with rotation happening in some sectors linked to economic revival (remember ISM?), such as materials and industrials.
But why so?
Firstly, industrials benefit from high nominal growth ( higher inflation+ high GDP growth). Also, we have seen macro signals of growth revival, which have been covered intensively in the last few weeks.
Secondly, the manufacturing thrust by the Biden government via IRA and the CHIPS Act is acting as a tailwind for industrials.
Nonetheless, we need to watch out carefully
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