Mid-Year Review -- June, 2023

Locator: 44852INV. 

Investing

The most under-reported story this past year: Nvidia

• May, 2023: Nvidia joins the $1-trillion club
• pivots from gaming (Covid-19 lockdown) to AI

trillion-dollar club

• only eight on the list;
• now:
• #5: Saudi Aramco
• #6: Nvidia
• next year (2024):
• #4 Nvidia
• #6: Saudi Aramco
• Meta does not move up the list, ever
• Tesla could falter short term
  
• of the trillion-dollar clubs, 
• only a few are integrated vertically (AAPL) 
• at least two highly dependent on ads
• cloud services a major component of at least three
• one is an outlier on so many levels
• the darling of Wall Street and many mom-and-pop investors, this company has a market cap well less than $1 trillion; resting on laurels and legacy companies; thinks differently, and lately, wrongly
  
• high point, March 25, 2022, has since dropped back; without AAPL, would have been dismal for investors
• replaces bonds in 60/40 investing model
• the next six trillion-dollar club members but could take years; when one looks at this list, it demonstrates just how dominant AAPL -- at $3 trillion -- is; in fact, companies now in $1-trillion club will lap the following:
  
• two oil companies: CVX $300B), XOM ($400B)
  
• one bank: JPM ($400B)
  
• one Big Pharm: AstraZeneca
• one is a lithium play: Rio Tinto
• one is seen as a brick-and-mortar retailer: Walmart, currently $400 billion
• note: BRK is not on the list
  

Tech

The most under-reported story this decade: the fourth industrial revolution

Biggest advancement in user interfaces: spatial computing (AAPL)

• Apple owns it
• META doesn't have it
• GOOG: dropped
• probably another decade before we see it in full bloom
• alpha generation: will use it
• beta generation: will grow up with it

EVs

the universal supercharger plug: Tesla NACS

• Tesla owns it
• all other supercharging networks will fold by 2025
  

transition: adoption of EVs will not unfold as expected

• RIDE: darling of Wall Street declared bankruptcy
• #1 global brand: 2Q23 deliveries to be announced shortly; will provide clearer picture
• more and more, EVs seen for elites; very, very expensive
• once one has an EV, one thinks about re-charging 24/7; the issue lives in one's mind rent-free
• we should start seeing stories on repeat buyers; used EVs for sale: won't be a pretty picture
• for 90% of Americans, switching to an EV is a bridge too far

Renewable Energy

Solar, wind: works, at least in sunny, windy states with lots of land; incredibly expensive

• Texas: relentless 100+ heat streak in early summer, 2023; unprecedented; electricity demand hit all-time records;
• ERCOT: grid held; at great expense; spot costs jumped from $5 / MW to $5,000 / MW
• luck or good planning? wind and solar gods favored Texas in June
• solar
  
• Texas: 25° 50' N to 36° 30' N (36° north to 26° south)
• California: northern border: 38.8375; San Diego, 32.7157 ((40° north to 33° south)
• wind
• Texas: consistent and perfect "speed"
• from the Gulf of Mexico to the Plains, Texas is home to three of the windiest cities in the United States. These cities average winds ranging from 12 MPH to over 13 MPH throughout the year, with higher winds recorded during periodic thunderstorms, hurricanes, and other seasonal storms.
• California: varies across the state; 
• off-shore best opportunity; on-shore, will not exceed Iowa's production
• most under-reported wind story: as blades become more efficient, failure rate increases
  

Geo-Politics

Ukraine: Wagner group a bigger story than most realize

• yes, a flash in the pan, but
• will have major effect on US intel (CIA) operations
• US CIA failure --> increased support for Ukraine

China: won't invade Taiwan in 2023 (or 2024, or 2025, or 2026, or 2027)

US Supreme Court

Tectonic

Warren Court: 1953 - 1969 -- most liberal court in US history,

• 15 years, 261 days
• I was born: 1951; high school graduate, 1969 -- most fascinating overlap of dates for me personally

Roberts Court: 2005 - present

• 18 years and counting; in good health and only 68 years old; appears much youngeer
• President Biden: 80 years old; could die in office of natural causes; more likely cognitive decline ends career;
• will be seen by historians as most conservative court in US history
• only major misstep: Obamacare
• will beecome most divisive court

COVID-19

autumn, 2023: will it re-surface as a news story?
seasonal flu: whatever happened to seasonal flu?

Global Economies

$25 trilion: it's lonely at the top. Spend some time at the link; many, many story lines (see below)
graphic: this chart is way out dated; the gaps have become even greater

• Nigeria makes the graphic; Russia doesn't

Graphics: