Tremors are being felt in the financial system and the feeling is that they will become a lot stronger.
What will be the consequence of those tremors??
We’re not sure yet, but things could get “interesting” in the markets in the next few months.
Let’s look at what Cathie Wood is saying.
She thinks a credit crunch is underway, and it’s going to get a whole lot worse. Wood has said that customer deposits are still leaving regional banks and are going into Treasury funds, limiting the ability for banks to potentially produce loans in the future.
Treasury funds can’t be loaned out, and therefore can’t encourage business activity. So, her idea is that we are in the early stages of a credit crunch that is going to be much more serious than most are expecting.
Wood has cited the downward trajectory of the SPDR S&P Regional Banking ETF (KRE) as a basis to forecast a continued deposit outflows from regional banks. The ETF has declined roughly 14% in the past five days alone. It’s also down about 17% over the past month.
Most of us are aware that regional banks have most definitely been hammered since the collapse of the Silicon Valley Bank and Signature Bank, which has stoked worries over the health of the U.S. banking system. Last weekend, First Republic was taken over by JPMorgan Chase.
Wood argues that the Federal Reserve will be forced to cut benchmark interest rates to stop the bleeding from these losses.
Wood points out that the (KRE) has broken down, which tells us deposits will continue to outflow until the Fed reverses its position – until it pivots. The Fed hiked rates by 25 basis points Wednesday, even as tighter monetary policy appears to have exacerbated the banking issues.
DoubleLine Capital CEO Jeffrey Gundlach agrees with Wood’s sentiment. He says that the Fed will need to pivot to end the regional banking crisis. On Thursday, European Central Bank chief, Christine Lagarde said tighter credit conditions would similarly weaken further bank lending.
Wishing you all a wonderful weekend.
Cheers
Jacque
The wealth which enslaves the owner isn’t wealth.
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(WHAT’S NEXT FOR BANK STOCKS AFTER THE FAILURE OF FIRST REPUBLIC)
MAY 3, 2023
Hello everyone,
It’s the latest theme in social investment circles. Are there cracks underneath regional banks or are they good bets in the future or is something bubbling we are not aware of?
The seizure and sale of First Republic Bank over the weekend closed the book on the most glaring problem left from the U.S. regional banking crisis, but now investors will turn to see if new stresses emerge and evaluate whether midsize banks can become good bets in the future.
First Republic’s failure was the third regional bank failure since early March, when Silicon Valley Bank and Signature Bank folded with days of each other. There seems to be cautious optimism on Wall Street that First Republic will be the last failure of this period.
Bank of America analyst, Ebrahim Poonawalla said that he believes the FRC sale should likely end forced sales of banks due to deposit flight. Although, there is no guarantee that other banks will not experience profitability challenges in the future.
First Republic’s final slide came after its first-quarter earnings report on April 24, which showed a 40% drop in deposits over the first three months of the year. Reports from other banks were not nearly as dire, with many reporting that deposits had stabilized and were growing again.
For example, PacWest Bancorp – which was seen as a potential area of stress after SVB’s collapse, and whose shares fell more than 10% Monday – said last week that it had brought in about $1.8 billion of deposits since March 20.
While the immediate crisis is over, the failure of First Republic could cause some more turbulence, at least in the short term, for both deposits and bank stocks.
The effect of SVB and other recent failures on the broader banking system is far from fully realized. The Federal Reserve report on the bank’s collapse hinted at regulatory changes that could make life tougher for midsize regionals for years to come.
KBW analyst David Konrad said yesterday that he believes banks with assets > $500B and <$60 are the clearest winners in the new world order, while there is likely to be a no-man’s land between $80 -120B, as banks in this range may need to shrink to avoid new regulations or more actively engage in M&A to increase scale and absorb regulatory costs.
Konrad went on to say that regulatory shifts could create a wave of asset sales and small deals as banks try to adjust to a new rule book.
Goldman Sachs analyst, Ryan Nash expects regional banks to likely respond by reducing capital returns, optimizing lending, and potentially disposing of assets to strengthen capital.
It is possible that commercial real estate concerns could be one area that causes bank stress, with Charlie Munger among the many investors warning the public about that sector.
Investors may want to sit on the sidelines until the coast is clear.
Happy Wednesday.
Enjoy the rest of the week.
Cheers,
Jacque
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Is it going to be a sell in May and go away time now?
This post will be a summary of John’s latest webinar, which was done last Wednesday.
Webinar Title: Man the Lifeboats.
Markets have gone from very low risk to very high risk. We are now at the top end of a high-risk range, with asset classes diverging sharply in outlook.
Bonds, foreign currencies, and precious metals now discounting a recession, while stocks at these prices are discounting a soft landing.
Gold and Silver – be patient -the upside breakout will happen soon.
US$ is fading away on recession prospects.
Look for S&P 500 to correct 10%.
Target is 4,800 for S&P 500 In the medium term.
Vix plunges to $15 – nothing to do here.
FCX target is $100 a couple of years from now.
Recession and debt default are crushing economically sensitive stocks now. Will go lower.
What to do: go to cash.
GLOBAL ECONOMY – FADING
The Fed is looking for “One and Done” with the next 25 basis point rate hike on May 3.
If you’re looking for yield and a safe place to put your funds go to 90-day T-bills. Offering 5% and they may be higher after May 3.
Short sellers take billion dollar hit, betting that European bank shares would collapse in the aftermath of the U.S. regional banking crisis.
Inflation takes a dive, dropping to a 5.6% YOY rate – the 9th consecutive month of decline.
Cash is pouring into money market funds as fears of a market correction mount.
Invest in 90-day T-bills.
PPI gives another deflation hint dropping 0.5% in March for only a 2.7% YOY rate.
Earnings Season sees best start in a decade with 90% beating estimates, albeit low ones.
Only 20% (SPY) companies have reported so far with (JPM) our biggest long, leading the charge.
Consensus (SPY) earnings are currently $220 a share giving moderate price/earnings multiple of 18.77x
All technical indicators are now flashing RED.
Seasonals are now turning strongly against stocks.
Volatility plunges to $15 putting the market to sleep.
Looking for flat first half and strong second half to take us to S&P500 4,800 by year-end.
CAT – is a BUY – but wait for the main market to recover.
FCX – selling off – if gets down to 200MA we may go into a buy or even a LEAP.
Buy T-bills direct from U.S. government. Now pushing a 5.2% risk-free yield.
BONDS
10-year U.S. Treasury yields back up. Still looking like a 2.5% yield by the end of 2023.
Keep buying TLT calls, call spreads, and LEAPs but only on dips.
Junk bonds are a great high-yield play. Buy JNK and HYG.
FOREIGN CURRENCIES
Weak U.S.$. Buy Aussie, Pound, Euro, and Yen.
Wishing you all a great week.
Cheers,
Jacque
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(THE U.S. IS FACING AN INCREASING STAGFLATION THREAT)
April 28, 2023
Hello everyone,
Stagflation could be knocking on your door for quite a lengthy visit soon. Thursday’s gross domestic product reading for the first quarter showed lackluster economic growth and high inflation.
First quarter growth came in at a 1.1% annualized pace, much slower than the 2% growth expected by economists polled by Dow Jones. Data inside the report showed the personal consumption expenditures price index, an inflation measure that the Federal Reserve closely follows, increased by 4.2%, higher than estimates.
So, you might be scratching your head, wondering what Stagflation is.
Let me enlighten you.
Stagflation is an economic condition the U.S. experienced in the 1070s, characterized by slow economic growth and elevated inflation, along with high unemployment. The one ingredient missing today is the high unemployment, but mounting layoffs are raising fears that will change soon too. Cases in point, Lyft has just announced it will lay off 26% of its workforce and Dropbox also has announced it will lay off 16% of its workforce.
With most economists expecting the economic picture to darken further in the second half, what can you do as an investor?
It’s reasonable to assume that certain stocks with pricing power and resilient revenue sources could outperform in this kind of environment.
Bank of America ran a screen earlier this year to find stagflation beneficiaries. The firm looked for S&P 500 companies with the best relative performance during periods of “below-trend growth with above-trend but decelerating inflation, an environment that we will likely be in this year.”
Here are the top 10 stocks from that screen of the past 50 years.
STAGFLATION SCREEN
On that cheery note, I will wish you all a wonderful weekend.
Cheers,
Jacque
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Artificial Intelligence will transform the retailing industry.
Retail operations may undergo significant change over the next decade as retailers incorporate AI-powered technologies into storefronts and warehouses to increase efficiency and enhance personalization across various sales and marketing channels.
What this means is that the days of mass marketing may be over.
The future of marketing will be all about personalization. And AI will be a big part of that.
AI will enable businesses to identify customers’ needs based on their previous purchases and browsing patterns and create personalized marketing.
So, if you are gift shopping for a special someone and are looking for swimwear, for example, you may just get those types of the latest swimwear options landing in your inbox.
And the best part of all this AI revolution is that you may not have to wait in lines in a store again. Shoppers may be able to go in and out of stores without having to wait online and check out. Warehouse operations can be streamlined and merchandise placement in stores can be optimized. E-commerce should also see a boost with AI driving more retail dollars online.
Amazon is obviously a big winner with the advancements in AI.
When you shop online with Amazon, especially for groceries, you already are offered suggested items you may like, if they are not already in your cart (as you have purchased them previously).
Even the type of language each company uses for each customer will be different. AI will be able to generate a language that resonates with specific individuals and drive them to act.
So, for example, you click on a dress or suit you want to check out in detail online. AI generates that you have “great taste” and a “sense of style”. This all speaks to our sense of self and targets our human emotions.
Eventually AI can help retailers pitch tailored products to each potential customer based on their prior history. That not only can help drive sales, but it can also actually lower costs as well.
Furthermore, improve customization can cut down on waste because shoppers will see items that are a better fit or are closer to what the person was seeking.
This all makes perfect sense. Imagine the efficiency and savings. When you think of all the apparel, footwear and accessories that were returned because they didn’t fit or were unsuitable, this customization is a win-win situation.
Machine learning may also help reimagine how companies sell their merchandise inside their bricks and mortar stores. Machine learning analyses data and identifies patterns, which attempts to imitate how the brain imitates how the brain processes information. Furthermore, ML can identify and track stock-keeping units and can therefore help facilitate automated in-store inventory management and autonomous checkout processes. A 1% improvement in inventory efficiencies can be worth millions of dollars.
Customer service will also benefit from the revolution. Company teams will use AI-enabled chatbots, virtual assistants and virtual idols, as well as text, voice and other applications to improve the customer’s experience.
It will be trial and error for many companies as they work out how best to use AI to add to their bottom line.
Happy mid-week.
Cheers,
Jacque
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(THE BEST WAY TO PROTECT YOUR MONEY AND YOUR LEGACY)
April 24, 2023
Hello everyone,
Two-thirds of American adults don’t have a will, according to a 2023 survey from Caring.com.
In my mind, that’s a staggering number.
Although many people don’t think they have enough funds to worry about or even pass on, do people realize what can happen to those funds when they pass without any instruction left behind?
It may have to go through Probate. And your funds and assets may end up going where you don’t want them to go. Also, think about the costs involved. An estate valued at $500,000 may have probate fees of $11,000.
Despite the perilous period we have been through with rising interest rates and a recession on the horizon, everyone needs to take time to think holistically about their finances, including their estate plan. You need to protect your money and your legacy as best you can. It’s critical to have estate planning documents, including a will that dictates who will receive your assets upon death, and to keep your beneficiaries updated.
While a will outlines who receives certain types of property, other assets pass to heirs through your beneficiary designations, such as bank accounts, 401(k) plans and individual retirement accounts, life insurance policies and annuities.
While Covid -19 has prompted a rise in estate planning, nearly 66% of American adults still don’t have a will.
It’s not only about leaving a will either. It’s also important to have documents for powers of attorney, allowing someone to make financial or health care decisions on your behalf if you were unable.
So, my advice is to take the time to create a will, or even update it. Your family will thank you for your estate financial planning.
Have a wonderful week.
Cheers,
Jacque
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(APPLE LAUNCHES ITS OWN SAVINGS ACCOUNT WITH A 4.15% INTEREST RATE)
April 19, 2023
Hello everyone,
An Apple laptop, an Apple iPad, an Apple iPhone and now we are being lured to purchase an Apple Card with a savings A/C attached and an enticing interest rate.
The card requires no minimum deposit or balance, and users can set up an account from the Wallet app on their iPhones.
Users must have an Apple Card to open the savings account.
In a press release the company stated that all daily cash reward earned through the Apple Card will automatically be deposited to the savings account. Daily Cash is the Apple Card reward program that offers up to 3% back on purchases. Users can change where their Daily Cash is deposited at any time and can also add funds from their bank account to build on their earnings.
Apple is launching the Savings Account through Goldman Sachs.
APY on savings accounts, on average, are quite low. Some even offer as little as 0.40%. Other institutions like credit unions and online banks and brick and mortar banks offer customers an attractive APY.
For instance, CIT Bank offers a savings account with a 4.75% APY when customers deposit a minimum balance of $5,000. Capital One’s savings account has no minimum balance, and users can earn a 3.5% APY. Vio Bank offers a savings account with a 4.77% APY with no minimum balance.
Apple Card savings users can manage their accounts through a dashboard that will appear in the Wallet app, where they can track their interest and their account balance or withdraw funds.
The feature is rolling out inside the Apple Wallet app on iPhones now.
Wishing you all a healthy and prosperous week.
Cheers,
Jacque
“Don’t be trapped by dogma – which is living with the results of other people’s thinking.”
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JOHN’S VISIT TO MUSK’S GIGAFACTORY AND THE TRINITY SITE
Monday, April 17, 2023
Hello everyone.
I hope you are all refreshed after the weekend and ready for another week of trading and expiration on Friday, April 21.
Before I get into my post today, I would like to extend a “get well” note to one of our Concierge subscribers, Linda Constable. She has Covid and is under the weather at present. We are all wishing you a speedy recovery.
Today I am going to dive into John’s Monday newsletter and give you a summary of what’s in store.
John has recently visited Elon Musk’s Gigafactory, 20 miles east of Reno. To say it is massive would be an understatement. No cameras are allowed after you enter. The factory consists of an army of robots building machines. Human beings make a scant appearance when needed, otherwise, they are barely visible. John shares that the factory occupies about 2 million square feet or about 33 football fields. Japan’s Panasonic, which has the contract to supply the batteries, occupies a substantial part of the factory space. When it is finished it will occupy 6 million square feet, making it the world’s largest building. The facility is energy neutral and runs 24/7.
The state of Nevada will benefit from Musk’s facility. The state has granted Tesla a ten-year tax holiday to start the second phase, which will employ another 5,000. Whole cities are starting to spring up out of nowhere as buildings and businesses spread east from Reno.
Musk is charging ahead to meet his 1.8 million vehicle targets for 2023, up 40% from 2022.
John has reminded us many times, THE FUTURE IS HAPPENING FASTER THAN ANYONE REALISES.
Tesla is really a preview of what will eventuate in the business sphere and in our everyday lives. AI/automation trend is moving rapidly, and the consequence will be an eventual tripling of the value of companies that embrace these trends and wipe out those that don’t.
ALL companies are AI plays, John says. This is largely behind his DOW 240,000 in a decade prediction. John reminds us that Microsoft brought out its office in 1990 and it instantly made ALL companies more valuable as they adopted it. The Dow Average soared by 20 times from $600 to $12,000. It will be a similar story with AI.
John argues that a 20-fold return from here takes the Dow Average from $34,000 to $680,000, except that it will happen much faster as technology is hyper-accelerating. Therefore, John thinks that DOW 240,000 looks like an easy target.
If you think John has been taking a substance no one knows about and is exaggerating these numbers, think about these headlines for a moment.
FedEx (FDX) fires 86,000 drivers, who will be replaced by robots.
Uber (UBER) is replacing its 5 million drivers with autonomous drivers to increase reliability & cut costs.
Dentists adopting AI to read X-rays are catching 12% of cavities they miss, thereby increasing fillings and increasing profits.
In five years’ time, John says that companies like Microsoft’s (MSFT) Chat GPT and Alphabet’s (GOOGL) DeepMind Technologies will be spun off and sold at enormous multiples to the public.
The roaring 20s, will be a part of our lifetime with technological advancements providing the juice. All asset classes will rocket in value – including stocks, bonds, commodities, precious metals, energy, and real estate.
The 2020s is the genesis of AI and robots.
Start lining up those stocks to buy because in five to ten years you will be sitting on a very rewarding basket of stocks.
John’s 2023 year-to-date performance is now at +49.57%. His average annualized return is up to 48.51%.
John took profits on his JPM trade after it posted fantastic earnings. He rolled that into a Boeing (BA) trade. He also took profits in his April bond long (TLT) and rolled it into a May bond long. He will run his remaining April long positions in (TSLA), (BAC), (C), (IBKR), (MS), (FCX) into the Friday, April 21 expiration.
I hope you all had at least one of those positions.
John’s life is full of great stories. His visit to the Trinity site at the White Sands Missile Test Range is just one of them. This was where the first atomic bomb was exploded on July 16, 1945. He tells us that the 20-kiloton explosion set off burglar alarms for 200 miles and was double to ten times the expected yield.
Uranium plays like Cameco ((CCJ), NextGen Energy (NXE), Uranium Energy (UEC), and Energy Fuels (UUUU) are great long-term plays. John tells us that uranium is being described as a carbon-free energy source needed to replace oil.
I’ll leave you today with some myths and facts about AI. There is a healthy debate going on and analysts don’t agree on all aspects of AI.
Have a wonderful week.
Stay healthy.
Cheers,
Jacque
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Nine Options Positions expiring on Friday, April 21, 2023
Wednesday, April 12, 2023
Hello everyone,
I thought I would show you how many positions John has that are expiring on Friday next week and what John says to do about it. Some of you will have all or some of these positions. For those of you who are just watching and learning, these are examples of option trades that will pay you a handsome profit. (Provided, of course, a black swan doesn’t swoop over our heads between now and next Friday).
How to Handle the Friday, April 21 Options Expiration
Followers of the Mad Hedge Fund Trader alert service have the good fortune to own NINE deep in-the-money options positions that expire on Friday, April 21, and I just want to explain to the newbies how to best maximize their profits.
These involve:
Risk On
(TSLA) 4/$130-$140 call spread 20.00%
(BAC) 4/$20-$23 call spread 10.00%
(C) 4/$30-$35 call spread 10.00%
(JPM) 4/$105-$115 call spread 10.00%
(IBKR) 4/$60-$65 call spread 10.00%
(MS) 4/$65-$70 call spread 10.00%
(BRK/B) 4/$260-$270 call spread 10.00%
(FCX) 4/$30-$33 call spread 10.00%
Provided that we don’t have another 2,000-point move up or down in the stock market in the next eight trading days, these positions should expire at their maximum profit points.
So far, so good.
I’ll do the math for you on our deepest in-the-money position, the Tesla April $130-$140 vertical bull call debit spread. Since we are a massive $45.00, or 32% in-the-money with only eight days left until expiration I almost certainly will run into the April 21 option expiration.
Your profit can be calculated as follows:
Profit: $10.00 expiration value - $8.80 cost = $1.20 net profit
(12 contracts X 100 contracts per option X $1.20 profit per option)
= $1,440 or 13.64%.
Many of you have already emailed me asking what to do with these winning positions.
The answer is very simple. You take your left hand, grab your right wrist, pull it behind your neck, and pat yourself on the back for a job well done.
You don’t have to do anything.
Your broker (are they still called that?) will automatically use your long position to cover your short position in your debit spreads, canceling out the total holdings.
The entire profit will be credited to your account on Monday morning April 24 and the margin freed up.
Buffett is investing in Japan.
Why?
The five trading houses – Mitsubishi Corp, Mitsui & Co, Itochu Corp, Marubeni and Sumitomo – seems to check every box of Buffett’s stock picking criteria.
First, they are classic value stocks, with a forward price-to-earnings ratio of 6.8, far lower than the average 12.5 in the MSCI Japan Index.
Second, they have a better-than-expected dividend yield, 5.2% on average, versus 2.7% for the broader Japanese stock market.
Third, the companies produce lots of cash flow.
Additionally, Berkshire can borrow very cheaply in yen and essentially the liability in yen can help hedge the currency exposure of the Japanese stock holdings.
The Japanese trading firms, also known as sogo shosha, are highly diversified companies involved in a wide range of products and services, including energy, machinery, chemicals, food, finance, and banking. They have been vital to the Japanese economy and global trade since they emerged in the post – WWII period.
Trust you are all having a great week. Enjoy the rest of it. Hope it’s extraordinary.
Cheers,
Jacque
“In order to be irreplaceable, one must always be different.” Coco Chanel
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Artificial Intelligence is in our present and future
Monday, April 10, 2023
Hello everyone,
Easter has been and gone for another year and another week of the markets is upon us. What will it be this week – bullish, bearish, sideways, good news is bad news, bad news is good news or news is just news??
Maybe we just need to turn to our A.I device to find out. Is that the future?
So, what is A.I.?
In its broadest sense, A.I. is the capability of machines to simulate human intelligence – to think and act the way that humans do. But we all know that human intelligence incorporates much more than just thinking and acting. Learning is a big part of it. Therefore, for any artificial intelligence to be considered “true” AI, it also needs to be able to learn. After that, it needs to apply what it has learned (by generalizing the knowledge) to solve new problems. After all, humans learn from experience to make better decisions.
Types of AI
Artificial Intelligence is usually grouped into the following two broad categories:
AI Applications or “Narrow” AI
AI Applications are capable of simulating human intelligence in a limited capacity. They can learn or be taught how to perform several specific tasks as efficiently as possible. In fact, it excels when it’s performing a single task, despite being heavily constrained.
AI applications are what we use every day. One of the biggest examples is personal data assistants like Siri and Alexa. These systems are capable of speech recognition and processing of natural language to determine what task you need them to perform.
Artificial General Intelligence (AGI) or “Full” AI
AGI is the type of AI that computer scientists dream of creating. It can simulate human intelligence in the truest sense with the ability to adapt to a multitude of scenarios and solve almost any problems that it encounters. This AI can drive a car, go shopping, balance an accounting book or even fly an airplane.
Currently, this type of AI is rooted in fiction. A good example of AGI would be Data from Star Trek, HAL from 2001: A Space Odyssey and JARVIS from Iron Man. AI analysts believe we are decades away from achieving this level of AI.
If we manage to create AGI, it is predicted that this will give rise to “superintelligence”. This is the type of AI that will surpass human intelligence on every imaginable level, including on the creative and emotional level. One of the downsides of superintelligence is that it will eventually start believing it is better than humans and may try to dominate us. We’ll leave that to future generations to sort out.
Why Artificial Intelligence is Important
AI has a lot of benefits, and these extend to virtually every industry.
A few are listed here:
Making Existing Products More Intelligent
AI is not a standalone product; it is integrated into existing products to make them more intelligent. One area where this is taking off today is the internet of Things (IoT). This is a network of interconnected smart devices that constantly communicate to anticipate human needs with little human intervention.
For example, when driving home, your phone will communicate to your garage that it’s in range so that it opens when you arrive. At the same time, the phone will set the thermostat to a comfortable temperature depending on the weather report it “checked” on the internet. Also, once the phone senses you’re inside your home, it’ll turn on your favourite relaxation music or the TV so you can watch the news.
As AI improves IoT will become better at anticipating your needs to the point human intervention will be completely unnecessary.
Automating Repetitive Tasks
Humans can only perform a task for so long before it becomes boring due to repetition. Boredom doesn’t register in machines. They can deal with the mundane, while humans focus on more high-level tasks that machines can’t do, yet.
So, get your AI to check documents for errors, bill multiple clients for completed projects, send customer onboarding emails, while you plan your next vacation.
Speeding Up Decision Making
Humans can only process so much information at a given time. Stress and tiredness are among the many factors that play a role in our ability to make decisions on time. AI is free from all this reduce and only focuses on what it is programmed to do.
Reduce Human Error
What makes us human affects our decision-making processes and causes us to make mistakes. A well programmed machine will not make mistakes.
For instance, the use of predictive AI has helped reduce human error in forecasting the weather. Businesses and brands have used the same AI to help them identify customers who are most likely to buy them.
Always Available
It’s obvious, isn’t it? Machines don’t need rest. Whether it is lunchtime or 2AM Alexa will always be available to process your queries. It’s also why businesses use chatbots to help customers after business hours.
OK, so, this may sound great, but how do we profit from all these advances in technology?
There is one tech fund capitalizing on the artificial intelligence boom – and beating 90% of its peers this year.
Adam Benjamin, manager of the $9.5 billion Fidelity Select Technology Fund (FSPTX) believes that A.I. is probably the largest technology theme, driver, and disrupter in the next 10+ years.
The mutual fund is up 22% in 2023, outperforming the Nasdaq Composite, which has risen 15%. It also has a solid long-term track record, racking up a 15.7% annualized return over the past 15 years that puts it in the 10th percentile, according to Morningstar.
Companies that rushed to embrace digital transformation during the pandemic continue to seek ways to improve efficiency through large language models like ChatGPT enabled by A.I., Benjamin said. He goes on to say that the biggest facilitator in the industry is no doubt, Nvidia.
Benjamin says that Nvidia is the single largest beneficiary by a wide stretch in terms of A.I. The chip stock is the Fidelity fund’s third largest holding with a more than 8% weighting.
Nvidia shares have rocketed 84% this year, boosted by their biggest quarterly gain since 2001. Benjamin says Investors grew bullish on Nvidia’s A.I. vision, while also viewing the inventor of the graphics processing unit as one of the chip manufacturers best positioned to endure an economic slowdown that’s already hurting personal computer and wider semiconductor sales.
Other semiconductor names among Fidelity Select Tech’s top holdings include Marvell Technology, NXP Semiconductors, ON Semiconductor, and GlobalFoundries.
The fund is rated four stars by Morningstar.
A.I. is all around us and improving all the time. Use it wisely.
Have a wonderful week. Don’t forget to do something that doesn’t involve A.I.
Cheers,
Jacque
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