Weekend Homework: Portfolio Cliff Notes
Here are the latest excerpts from news reports that support the portfolio's thematic and targeted strategies.
You've reached your free article limit
You've read 0 of 1 free Pro articles.
During this week’s Thematic Investing 101 teach-in, we discussed how benefits of thematic investing include spotting structural tailwinds and useful data points. With that in mind, here are some of those data points and other nuggets of information that we collected this week on themes including the aging population, artificial intelligence, the cash-strapped consumer an more. Let's dig in:
Aging of the Population
“As Texas’ population continues to age, there is a growing concern about a shortage of board-certified geriatricians available to provide specialized care. The aging baby boomer generation will double the number of people ages 65 and older between 2000 and 2030. This will result in older Americans making up 21% of the population, according to U.S. census data.” Read more here
Artificial Intelligence
“Salesforce Inc. plans to hire more than 1,000 workers to sell its new generative AI agent product. The hiring surge is aimed at capitalizing on “amazing momentum” for the new artificial intelligence product, Chief Executive Marc Benioff said in a message. “Agentforce became available just two weeks ago and we’re already hearing incredible feedback from our customers.” Read more here
Artificial Intelligence, CHIPs Act
“Tokyo Electron on Tuesday hiked its operating profit forecast for the year ending March 2025 by 8.5% to 680 billion yen ($4.42 billion) amid chip industry investment supported by the growth of artificial intelligence.” Read more here
Artificial Intelligence, Digital Infrastructure
“Server spending in Europe is projected to increase by 25% in 2024, driven by demand for AI-optimised hardware. This growth rate will moderate to 11% in 2025. Technology providers have increased their server spending by 46% in 2024, indicating a substantial build-out of AI infrastructure capacity.” Read more here
Cash-Strapped Consumer
“There is pent-up demand for projects … Our customers tell us that their lives are changing. Their families are growing. They’re upsizing, they’re downsizing. They need to move for a job. There is demand for remodeling, and they are putting it on hold until they see a more favorable financing environment. And so the demand is there, the question is, when it’s unlocked.” Home Depot customers have continued to put off projects, even though they’re in good financial shape, he said. About 90% of the company’s do-it-yourself customers own their homes.” Read more here
“Retail sales made during China’s annual Singles’ Day shopping event reportedly slowed again this year amid the country’s economic challenges and consumer skepticism about retailers’ promotions. While eCommerce platforms used to see growth in the double digits during Singles’ Day, more recent estimates put those figures in the low single digits… “ Read more here
CHIPs Act
“Late Tuesday, a person familiar with Biden administration plans told Barron’s that the Commerce Department will award all of the $39 billion before the end of Biden’s term. The $36 billion in announced Chips Act awards were just letters of intent. Next come long-form term sheets. Finally, both sides negotiate and sign legally binding agreements. Actual disbursement will be pegged to construction milestones over the coming years.” Read more here
Cybersecurity, Data Privacy
“The FBI is alerting companies that cybercriminals are using compromised U.S. and foreign government email addresses to send fraudulent emergency data requests. By sending these fraudulent requests to U.S.-based companies, the hackers are looking to gain access to the companies’ holdings of their customers’ personally identifying information (PII), the FBI said in a Nov. 4 Private Industry Notification.” Read more here
Energy Pain Point
“The German industrial conglomerate has been among the early winners in a data-center boom driven by artificial intelligence, which powered growth in orders, revenue and profit at Siemens’s key smart infrastructure segment. The division makes electrical and grid equipment that are in high demand amid a rush to build more infrastructure to support the AI era.” Read more here
Homebuilding & Materials
“Homebuyers are confronting borrowing costs that are markedly higher than a month ago, but some shoppers are forging ahead. In the four weeks ended Nov. 10, contracts to buy previously owned homes were up 4.7% from a year earlier, according to Redfin Corp. data. And a measure of mortgage applications rose for the first time in seven weeks, according to the Mortgage Bankers Association.” Read more here
Safety & Security
“China on Tuesday debuted its latest model of stealth fighter jet and foreshadowed an ambitious pipeline of advanced drones, as Beijing displayed its determination to match American military might by investing heavily in the latest tech and forging ever-closer bonds with partners like Russia.” Read more here
“In September, German Defense Minister Boris Pistorius proposed pushing the amount of spending dedicated to the military from 2% of gross domestic product to between 3 and 3.5%. In a new poll released Monday by the Koerber-Stiftung Institute, 50% of respondents supported Pistorius’ idea, while a further 15% said even more should be spent on German defense.” Read more here
The Strategies Behind the Thematics Mentioned Above
Aging of the Population - Capturing the demographic wave of the aging population and the changing demands it brings with it.
Artificial Intelligence – Software, chips, and related companies that facilitate the collection and analysis of large data sets and autonomous generation of solutions given non-machine language prompts.
Cash Strapped Consumer - Companies poised to benefit as consumers stretch the disposable spending dollars they do have.
CHIPs Act – Capturing the reshoring of the US semiconductor industry and the $52.7 billion poised to be spent on semiconductor manufacturing.
Cybersecurity - Companies that focus on protecting against the penetration of digital networks and the theft, ransom, corruption or destruction of data.
Data Privacy & Digital Identity - Companies providing the tools and services that verify authorized users and safeguard personal data privacy.
Digital Infrastructure & Connectivity -The buildout and upgrading of our Networks, Data Storage Facilities, and Equipment.
Energy Pain Point – Companies poised to prosper from rising power demand.
Homebuilding & Materials – Ranging from homebuilders to key building product companies that serve the housing market, this model looks to capture the rising demand for housing, one that should benefit as the Fed returns monetary policy to more normalized levels.
Safety & Security – Targeted exposure to companies that provide goods and services primarily to the Defense and security sectors of the economy.
