Welcome to the Enhanced Value Fund (EVF) newsletter! With Charts of the Month, we’ll be providing you with occasional updates on EVF and sharing interesting charts that have caught our attention in recent weeks.
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EVF updates
We recently welcomed several high-profile investors to Enhanced Value Fund (EVF). Before committing, they rigorously challenged our strategy and positioning.
We appreciate this level of engagement, as it benefits everyone involved. Investors gain a deeper understanding of our fund’s strategy, while we, as fund managers, gain valuable insights and perspectives.
In this issue of Charts of the Month, we will share some key points from these conversations. We hope you enjoy it!
Let’s dive in!
Aaaaand… He is gone!
Actually, before we start, for the next issue of Charts of the Month, what would you prefer to see:
Equity markets
This is an interesting perspective, shared by one investor, regarding the very low volatility in 2024 (until the recent spike) vs the previous years.
In the last month, we had a Nasdaq “major” correction (that’s what we call a -9% peak to trough, nowadays), while the All Country World Index ETF is flat and the small cap index is charging ahead.
In fact, Alphabet results were strong, but the Capex part scared the s**t out of analysts:
Usually that’s how it goes: market punishes high capital spending companies, then these companies reduce spending, finally the suppliers of these companies suffer. All this at the speed of light.
We just need a bit of operational efficiency!
In fact, forward quarterly Earnings Per Share are looking good.
It is just that money are not made where it used to be. Or is it time to buy?
US large cap funds look overbought.
Maybe India. Is anyone looking there?
Looks like we’re late to the party.
Gentle reminder: in the US a lot of people have a lot of skin in the game (i.e., money in the stock market).
Sick West
In case you didn't notice, France has been heavily running the tab on future generations.
While the US is chasing USD 1T in yearly interest payments to service its debt.
Hopefully productivity will save everyone, US first.
In fact, in Oil and Gas, US guys more productive than majority of EU counterparts.
If you’re planning to have your kids study coding, this might change your mind. It’s a machine biz now.
In Private Equity, the money (USD 1 Trillion) are made by the big boys running , crumbles to investors.
The EU biofuel mandates are a mess. This picture might look bullish given the net balance in deficit, but there are not enough feedstocks available. As we speak, a lot of capex are going down the drain. Please remember we mentioned this here first.
Chinese cars are getting cheaper.
And are flooding the EU.
But note it’s mainly Teslas, BYD has yet to penetrate properly the market.
You can read this chart in a few ways, let give you ours: at 2000-2010 nuclear power output level, Germany could replace today’s coal and lignite power production. But they’re phasing out Nuclear… Long live lignite!
On nuclear power, and why the West needs to wake up, you’ll find an interesting 10 minutes overview by David Friedberg, double click on the picture below to listen to the clip.
Rest of the world corner
The pace of increase and absolute amount of business that is done outside the western block is staggering.
In high-quality science paper China is leading
And in quantum technology funding, too.
And regarding chipmaking capabilities, they are positioning for a fight.
Which will likely yield results, with China + Taiwan = 80% of world supply in 2027.
China is having another record year in solar installations.
World solar is China.
All this solar while battery prices are dropping fast too.
India is burning gas like no tomorrow. Better than coal but still…
Commodity Land
In copper, China turned exporter, but it is not clear what drove this yet.
Copper production is definitely under stress
It takes a long time to build a new mine.
Global jet fuel demand is all time high.
Global coal consumption is increasing.
Hopefully all these data centers will not be powered via coal generated power.
Miscellaneous
Not a surprise to us in general, but the ranking is interesting.
Denmark wind: just wow!
This is real, we checked…
Thank you for making it so far, hope you enjoyed it!
Any comments? Send them in!
The Enhanced Value Fund (EVF) Team
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