Montaka's Spotlight Series
By Montaka Global
Montaka's Spotlight SeriesJul 11, 2022
Rounding up the Q1 2023 Earnings season
This month Andy talks with Amit about the Q1 earnings season that is unfolding. Of particular interest are the results of Blackstone, Microsoft, Amazon, S&P Global, and Meta.
Despite a very challenging quarter in financial markets, Blackstone still raised US$40 billion in new assets, bringing total AUM to US$991 billion. With US$194 billion in ‘dry powder,’ Blackstone is well positioned to take advantage of any opportunities, particularly in commercial real estate and private credit.
The idea of ‘operating leverage’ – a concept that means revenues grow faster than costs, and profit margins expand as a result – is something that we are seeing across many of Montaka’s investee companies. S&P Global, for example, grew revenues by 4% per annum, while costs increased by only 1% per annum. Microsoft, while still growing +10% per annum in the most recent quarter, grew costs at only around 3% per annum.
Meta is yet another example. As revenue growth resumes, Mark Zuckerberg is aggressively reducing costs. Meta’s original forecast was for US$94-100B in total costs in FY23. In January, the company lowered this forecast to US$88-94B, excluding one-time restructuring costs. Now, in recent days, the company has reduced the forecast again to US$82-86B, excluding one-time restructuring costs… representing a cost base that, rather than growing by 10% relative to last year, it actually is shrinking by 5%.
Banking on AI: The Collapse of SVB and Credit Suisse, and the Rise of GPT4 and Microsoft's Copilot
We discuss the recent collapse of Silicon Valley Bank and Credit Suisse, from liquidity squeezes and investor panics to the resilience of big banks. We explain why the US banking system is healthy at the moment and why a GFC replay is unlikely. And then moving onto AI, we dive into the exciting news about OpenAI's highly advanced GPT4 and Microsoft's Copilot announcement, discussing their potential implications for businesses and investors alike. Tune in for an engaging and informative discussion on the intersection of finance, tech, and innovation.
#finance #technology #banking #AI #GPT4 #Microsoft #OpenAI #SiliconValleyBank #CreditSuisse #productivity #investing #innovation #global #stocks #mkax #mogl #andrewmacken #chrisdemasi
Tech isn't dead (Special Whitepaper edition)
The world of AI and tech is moving fast, and in the past few weeks, we've seen remarkable innovations like 'ChatGPT'. If you're an investor who wants to stay ahead of the curve, you won't want to miss this podcast.
In 2022, many declared tech dead, but Montaka's deep analysis proves otherwise. Our latest whitepaper reveals remarkable opportunities for smart investors to profit from a new era of tech dominance, fueled by artificial intelligence (AI). Join Andrew and Chris as they discuss the key takeaways and top stocks poised to lead the tech recovery.
To get your free copy of our latest whitepaper, click here: https://marketing.montaka.com/tech-whitepaper or visit our website at www.montaka.com. Don't miss out on this exciting opportunity to stay ahead of the game in the world of tech investing.
#techinvesting #AI #artificialintelligence #techrecovery #investingopportunities #Montaka #whitepaper #smartinvesting #innovations #ChatGPT #techstocks #podcast #investors #stockmarket #finance #techdominance #emergingtechnologies
Looking Ahead: Navigating the Markets in 2023
Andy and Chris discuss their views on the market and the economy as we head into 2023. They believe that the downturn in 2022 created a great opportunity to buy high-quality businesses at a lower price, due to moderating inflation and slowing economic growth in the US. In their opinion, the probability of interest rates continually increasing throughout 2023, is very, very low- which offers a more favorable environment for equities. In the current market conditions some businesses are facing headwinds from the tough macro environment. However, the expectations priced into stocks are for a much greater decline, which could result in positive surprises and an increase in stock prices. They strongly believe that buying stocks when they are undervalued is the best way to reduce risk and see 2023 as a great entry point for investments that will reap benefits in the long-term.
They also touch upon Montaka's current portfolio exposures and deep dive into one of our holdings- S&P Global, which they believe will thrive in this environment.
Of 'compounders' and what defines them
What are 'compounders'? You might have heard the term being tossed around in the investment industry but what do we actually mean by it. Andy and Chris discuss the key characteristics of a 'compounder'. They also talk about a recent study that shows that the 'compounders' that have achieved 10x returns over a decade were driven mostly by revenue and earnings power growth, and the entry price or timing the stock market has very little impact on them. So being able to identify and invest in those businesses that can truly compound their earnings power over a long period of time is the most powerful form of investing.
They sum it all up by introducing Montaka's articles for the month. Chris wrote about the difference between cyclical and structural growth and its sustainability. While Andy responds to six key questions from investors around Meta platforms in his piece.
Please go to our website www.montaka.com/blogs and read these articles.
The case for optimism- rounding up Q3 earnings
Andy and Chris talk about some interesting recent developments as we just come through another quarterly earnings period. They discuss the operating conditions and the progress happening in the businesses we own in our portfolio. They go on to share their perspective on what's been happening in the market in the past few days in light of the price volatility in global equities.
#bear or #bull #global #equities #stockpick #investment #management #portfolio #manager #amacken #cdemasi #montaka
The impending inflection point in global equities
In this podcast, Andy is joined by Director of Research, Amit Nath, to discuss the macroeconomic drivers of equity markets this year. The year so far has been quite shocking for investors who are probably wondering when the turbulence will end. Given that, we take a step back and look at 5 key charts that provide some perspective on the current environment for investors. They analyze the evidence of a looming inflection point. And they discuss a handful of global stocks that Montaka believes are set to re-rate.
#global #equities #bear vs #bull #inflection point #markets #commentary #trend #investors #hope #montaka #global #investments
Which stocks will win in a strange economic environment?
We are entering a period of difficult economic times, but there is a class of stocks that will keep performing. These stocks have ‘advantaged’ businesses. In this Podcast, Chris and Andy look at the mission-critical companies best placed to thrive in this "strange and challenging” economic environment.
And they look at why Microsoft is extraordinary value when viewed from a private equity perspective.
#stockpicking #finance #investment #business #money #investing #trading #stockmarket #stocks #wealth #invest #motivation #personalfinance #financialliteracy #wallstreet #financetips #investor
Q2 earnings season & maintaining a long-term view
In this podcast, Andy & Chris chat about the Q2 reporting season for 2022 and highlight important insights on Montaka's investee companies, including Amazon, Alphabet and Blackstone. Is the market being overly myopic today? And what can public investors learn from private investors?
What are the big questions in markets today?
In this podcast, Andy & Chris discuss some of the biggest questions on the minds of investors. From inflation to interest rates, to a potential recession and the stock market sell-off that reflects all of these concerns and more. How should investors update their positioning in light of these headwinds?
Drawdowns- Even God's own portfolio can't avoid them
While the selloff in global equity markets this year has been unpleasant, it was not unusual.
Listen to this interesting podcast featuring Andrew Macken and Chris Demasi from Montaka Global Investments where they discuss a hypothetical stock portfolio constructed with perfect foresight - Let's refer to it as 'God's portfolio' - would deliver stratospheric long-term returns… but still could not avoid agonizing drawdowns.
Wesley Gray, Phd, an asset manager and former US Marine, published a paper in 2016 concluding this which is discussed in our blog here: https://montaka.com/blogs/accept-the-drawdowns/.
Over the 90-year investment horizon, God’s portfolio compounded at more than 29% per year which would have turned an initial investment of just $1 into almost $12 billion! (The S&P500 index of the top 500 US listed stocks returned on average just under 10% per year in this time and a $1 investment would have grown to about $5,000.)
While the theoretical value created by God’s portfolio is no doubt staggering, the drawdown profile is more astonishing. Instead of protecting against large reversals in fortune, God’s portfolio endured the pain of drawdowns that exceeded 20% on ten different occasions. The worst of these was a 76% decline over almost three years in the Great Depression – not dissimilar to the stock market’s 85% drawdown around the same time.
Must listen to this interesting discussion around #sell-off #investing and the #volatile #global #equity markets.
Why AI (Artificial Intelligence) is today's most important investment theme - and how to profit from it
Most investors are aware that artificial intelligence, or AI, is an important transformation. But many still underestimate the sheer world and life-changing power of this revolution and its investment potential.
AI will recast and refashion every aspect of life: how we consume, how we work, how we monitor industrial machines, how we deliver healthcare, how wars are won, and how we solve climate change.
Not only is software eating the world, but it is becoming a lot smarter at an accelerating rate and will continue to do so. Why? Because of AI – and more specifically, machine learning (ML), the most common and practically applicable subset of AI today.
In this podcast, Andy and Chris discuss Montaka’s recently published whitepaper: The Amazing Hyperscalers – Why epoch-defining AI is today’s most important investment theme. They share Montaka’s latest thinking on AI and why owning the world’s leading hyperscalers is so attractive today.
Getting to know Amit Nath, Senior Analyst at Montaka
Andy connects with Montaka's Senior Analyst, Amit Nath, from our New York office. Get to know how Amit’s background as a generalist investment banker and credit analyst helps him uncover great long-term investment opportunities for Montaka’s portfolio.
#investment #thoughts #NY #analysis #research #global #equities
Concentrated & Patient: How Active investing wins
Andy chats to Chris about two key ingredients for long-term investing success: (i) portfolio concentration; and (ii) long-term patience. Chris wrote about these winning fund manager characteristics in our August Monocle.
A select set of active managers who run concentrated portfolios and patiently hold their positions have been shown to significantly outperform over the long term. With passive strategies set to be challenged in the next decade, investors need Active investing avenues now more than ever.
#investing #basics #Passive or #Active #FundManagement #InvestmentMgmt #IndexFunds #ActiveETFs #MKAX #MOGL
Why have investors become THEME JUNKIES?
Chris talks to Andy about a piece he wrote for the Montaka Monocle last year titled: Why have investors become theme junkies? Each year investors will be served up an array of exciting new themes to consider. The only problem is - as you’ll hear in our discussion - it remains far from clear if many of these new themes are even themes at all.
#investing #howto #stocks #equities #themes
Kicking off 2022: Inflation up, stocks down, what to do?
Andrew Macken & Chris Demasi discuss the significant equity market volatility that has characterised the beginning of 2022. US inflation and interest rate expectations seem to be the sole focus of the markets. But Andy & Chris step through some important reasons why equity markets may well have already overshot to the downside.
#Stocks #Inflation #Equities #ASX #HowToInvest #BuySellHold