Hi Multis
I’m starting to write this Overview of the Week in the back of an Uber, driving to Denver Airport.
I’m not constantly glued to my screen, as the scenery is simply too beautiful.
It’s Saturday afternoon here now, and I will arrive home around 4.30 pm on Sunday. I know I’ll need a few days of recovery from the jet lag. Those of you who have been flying east know that that’s always the worst, as you ‘lose’ time while flying.
I loved the conference a lot again. The best thing about it is not necessarily the ideas, but the conversations with some of the world’s smartest and most successful investors. They are great at poking holes in your thesis, asking the best questions and adding valuable context.
As I already shared last week, I presented about Mercado Libre.
If you want my full presentation, you can download it in the paid part of this article.
Articles In The Past Weeks
Because of my stay in Vail, this is just the second article this week. I know you are used to more, but most services don’t provide half as much content as I do for this price.
On Monday, I published the Topicus earnings analysis, updated the Quality Score and valued the stock. You can read that article here.
By the way, Constellation Software was widely discussed during the conference. ;-)
Memes Of The Week
Two memes this week. They may be outside some people’s comfort zone, so feel free to scroll past them. But I found them too funny not to share.
This is a parody of Benjamin Graham’s book The Intelligent Investor.
The second one is about SpaceX.
I don’t know much about technical analysis, but this one looks pretty correct, haha.
Interesting Podcasts Or Books
On the flight to Denver, I read about 70% of this book on Nubank. It’s self-published, and that means that there are a few things a good editor would have weeded out (like a paragraph that’s repeated), but it’s well-written and great to get extra insight on the company. I intend to read the rest on my flight home, although I might also try to sleep.
The markets in the past week
How did the markets do this week? As I was fully immersed in the conference, I actually have much less of an idea than I normally do. Let’s have a look.
That’s pretty crazy. The Nasdaq was down 4.6% this week, while the S&P 500 only lost 1.95% and the Russell 2000 was up 1.02%. I can’t remember such a big difference between the weekly returns of the indexes.
The Greed & Fear Index dropped to EXTREME FEAR.
Quick Facts
1. Apple Wants To Buy Banned Chips
Apple is lobbying the Trump administration for permission to buy memory chips from China’s CXMT (ChangXin Memory Technologies).
The Pentagon has classified CXMT as a Chinese military company. Apple reportedly contacted the Commerce Department more than a month ago and has also approached White House officials and political allies. Its goal is of course to lower the cost of memory. But I doubt that this will be successful. CXMT is blacklisted because of its ties with the Chinese military. I would be very surprised if the White House approves this. I mean, do you want almost every American to have a Chinese spy chip in his pocket? I don’t think so.
At the same time, Apple raised prices for iPads and MacBooks, saying it could no longer absorb the jump for the expensive memory chips.
2. $100K Is More Than 10% of the Journey to $1 Million
Compounding growth is a hard concept to understand and I saw a great post this week that shows how many get it wrong.
Suppose you want to go to $1 million. On paper, $100,000 is only 10% of $1 million. But measured in time, it can represent more than 25% of the goal.
If you invest $10,000 a year and earn an average annual return of 7%, it would take 30.7 years to reach $1M. The first $100,000 would take 7.8 years. That means the first $100,000 consumes about 25.5% of the total timeline.
Then compounding starts doing more of the work and things speed up. Going from $900,000 to $1 million takes only about 1.35 years, almost six times faster than reaching the first $100,000.
At the start, things may feel slow, because most of the growth comes from your own contributions. Later, the compounding returns accelerate.
The first $100,000 is the hardest. Charlie Munger already said that.
Below for paying subs:
Why the Mag7 turned into the Drag7
Why companies are suddenly cutting AI spending,
Why Alphabet's stock was down on surprising news
My full Mercado Libre Vail presentation to download, and of course, much more.
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