Equity Mates - Big Tech Correction, Politician’s Portfolios Revealed & What Happened to ESG Investing?
The podcast begins by discussing the recent downturn in big tech stocks, highlighting that the 'Magnificent 7' are in a correction phase, with Tesla being the worst performer. Despite this, Nvidia reported strong earnings, driven by its data center revenue, which is crucial for AI infrastructure. The hosts emphasize the importance of long-term investing amidst short-term market noise.
The discussion then shifts to ethical investing, prompted by a listener's question about balancing values with investment returns. The hosts explain ESG investing, which involves screening companies based on environmental, social, and governance criteria. They compare the performance of ethical ETFs to traditional ones, noting that globally, ethical ETFs have outperformed due to higher tech exposure, but in Australia, they have underperformed due to the exclusion of major banks and miners. The hosts conclude that ethical investing can still yield competitive returns and is a viable option for value-driven investors.
Key Points:
- Big tech stocks are in a correction, with Tesla down 39%.
- Nvidia's earnings beat expectations, driven by data center revenue.
- Ethical ETFs globally have outperformed traditional ones due to tech exposure.
- In Australia, ethical ETFs underperformed due to exclusion of banks and miners.
- Ethical investing can still provide competitive returns.
Details:
1. 🎉 Welcome & Episode Overview
- The episode will explore investment opportunities by examining what politicians in Australia and the US are investing in, providing insights into current trends in political investments.
- There is a focus on ethical investing, responding to a community question on the subject, indicating a resurgence of interest in ethical investment strategies.
- The episode will begin with a news segment to set the stage for the discussions that follow, ensuring listeners are updated with the latest developments in the investment world.
2. 📰 Tech Market Update: NVIDIA & The Magnificent Seven
- The tech market is experiencing a correction, led by declines in major tech companies known as the 'Magnificent Seven': Tesla, Amazon, Apple, Microsoft, Alphabet, Meta, and NVIDIA.
- Tesla has declined by 39% since the index's peak in mid-December, falling below a trillion-dollar market cap, marking it as the worst performer among the group.
- Amazon, Microsoft, and Alphabet have each seen declines of at least 10%, while Meta is the only company in the group with a 5% increase.
- The S&P 500 index has decreased by 2% since its December peak, indicating the broader market trend.
- NVIDIA reported record quarterly earnings, with total revenue close to $40 billion and operating income at $25.5 billion, exceeding market expectations.
- NVIDIA's data center segment generated $35.6 billion in revenue, showing a 93% year-on-year increase and a 16% increase from the previous quarter.
- Despite high expectations, NVIDIA continues to exceed market predictions, showcasing strong performance.
- Super Micro, another company in the data center space, reported doubled revenue to nearly $14 billion year-on-year, successfully avoiding NASDAQ delisting.
3. 🏛️ Politicians' Investments: Insights & Controversies
3.1. Insider Knowledge and Property Investments
3.2. Investment History and Public Sentiment
4. 🏠 Stocks vs. Property: Where Politicians Stand
- Nancy Pelosi achieved a 700% return on investments from 2014 to 2024, averaging 22% annually, which is slightly better than Warren Buffett's long-term average, highlighting the potential for significant gains in stock investments.
- 83 members of parliament declared shareholdings post-2022 election, while 67 have one home and 48 own multiple properties, indicating a balanced interest in both investment avenues.
- Karen Andrews and Michelle Ananda Raja each own seven homes, while former Senator Barry O'Sullivan owned 33 properties, showcasing a strong inclination towards property investment among some politicians.
- The most commonly held stocks among politicians include Westfarmers, ANZ, Westpac, BHP, CBA, and NAB, with 25 politicians owning a company that has underperformed the market in the last 5 years, suggesting a potential risk in stock investments.
- Anthony Albanese owns four properties but no shares, raising questions about promoting wealth building outside property, reflecting a traditional approach to wealth accumulation.
- Paul Scar from the Liberal Party owns 25 individual shareholdings, demonstrating a diversified stock portfolio, while Jed Carney from the Labor Party owns 38, reflecting a strong commitment to stock investments.