BNN Bloomberg

BNN Bloomberg’s Market Call: Shane Obata – July 5, 2023 (Full Interview)

  • BNN Bloomberg
  • BNN Bloomberg’s Market Call: Shane Obata – July 5, 2023 (Full Interview)
M-Asset

Shane Obata is Lead Portfolio Manager on the following Middlefield strategies:

Middlefield Innovation Dividend ETF (MINN: TSX)

Middlefield Sustainable Global Dividend ETF: (MDIV: TSX)

Market Outlook:

It was a great first half for the tech bulls, with the Nasdaq 100 rising around 39 per cent for its best start to a year ever (with data going back to 1985).

The “magnificent seven” (Apple, Microsoft, Google, Amazon, Meta, Tesla and Nvidia) did most of the heavy lifting, returning around 58 per cent year to date. While leadership has been narrow, we believe it has been largely well deserved by some of the best companies in the world that are likely to be the first-order beneficiaries of the artificial intelligence (AI) cycle. In addition, we would note that narrow leadership is not necessarily a bad thing and is more commonplace than most believe. Goldman Sachs research notes that in any given year, equity returns tend to be concentrated in a small group of companies. For example, the top 10 contributors have accounted for 32 per cent of the S&P 500’s return in the median year since 1995.

Seasonality bodes well for future short-term gains. At the risk of “jinxing it,” the Nasdaq has traded higher in each of the last 15 years during the month of July. Furthermore, the market tends to continue moving higher when the first half of the year yields greater than 10 per cent and follows a negative year prior (i.e. 2022).

 

Top Picks:

Purchased at US$627.65 on April 21, 2023

Broadcom (AVGO) provides GARP exposure within the high-beta semiconductor industry. The company is well-diversified across reporting segments, end markets and functions. Key growth areas include data center networking and custom chips for AI acceleration. Taken together, we expect that Broadcom’s AI-related revenues could amount to at least $7.5 billion in 2024, which would position the company as the second-largest AI compute/networking semiconductor business behind Nvidia.

Blackstone (BX NYSE)

Purchased at $82.33 USD on May 18, 2023

Blackstone (BX) is the global leader in alternatives, with assets approaching $1 trillion. The company began in private equity but is now well diversified across end markets such as real estate, which is now its largest segment in terms of AUM. While we expect the market for office to remain challenging, Blackstone has been reducing its footprint over time. U.S. office now accounts for just two per cent of its real estate portfolio. With over $190 billion in dry powder, BX is well positioned to deploy capital into depressed assets as we move past peak inflation/rates.

Nintendo (7974 TYO)

Purchased at 6160.69 JPY on June 13, 2023

Nintendo is a Japanese video game company that is best known for its highly successful franchises such as Mario, Zelda and Pokémon. While the Switch console is clearly in the latter half of its life cycle, we believe that it will continue to generate resilient operating profits, especially on the software side, that will serve as the foundation for the next-generation device. Moreover, we believe that the massive success of the Super Mario movie, which has grossed over $1.3 billion worldwide, provides a glimpse into how Nintendo can maximize the value of its intellectual property (IP) going forward. In other words, great IP on the video game side (e.g. Mario) can translate into great results in the theatre, which can then drive sales on the video game side.

Disclosure Personal Family Portfolio/Fund
AVGO NASD N N Y
BX NYSE N N Y
7974 TYO N N Y

 

Past Picks: July 22, 2022

Nvidia (NVDA NASD)

  • Then: US$173.19
  • Now: US$428.26
  • Return: 147%
  • Total Return: 147%

Motorola Solutions (MSI NYSE)

  • Then: US$221.16
  • Now: US$290.87
  • Return: 32%
  • Total Return: 33%

LVMH (MC EPA)

  • Then: €634.70
  • Now: €848.10
  • Return: 34%
  • Total Return: 36%

Total Return Average: 72%

Disclosure Personal Family Portfolio/Fund
NVDA NASD N N Y
MSI NYSE N N Y
MC EPA N N Y

 

 

Disclaimer

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. You will usually pay brokerage fees to your dealer if you purchase or sell units/shares of investment funds on the Toronto Stock Exchange or other alternative Canadian trading system (an “Exchange”). If the units/shares are purchased or sold on an Exchange, investors may pay more than the current net asset value when buying and may receive less than the current net asset value when selling them. There are ongoing fees and expenses associated with owning units or shares of an investment fund. An investment fund must prepare disclosure documents that contain key information about the fund. You can find more detailed information about the fund in these documents. Mutual funds and investment funds are not guaranteed, their values change frequently and past performance may not be repeated. Certain statements in this disclosure are forward-looking. Forward-looking statements (“FLS”) are statements that are predictive in nature, depend upon or refer to future events or conditions, or that include words such as “may”, “will”, “should”, “could”, “expect”, “anticipate”, “intend”, “plan”, “believe”, or “estimate”, or other similar expressions. Statements that look forward in time or include anything other than historical information are subject to risks and uncertainties, and actual results, actions or events could differ materially from those set forth in the FLS. FLS are not guarantees of future performance and are by their nature based on numerous assumptions. Although the FLS contained herein are based upon what Middlefield Funds and the portfolio manager believe to be reasonable assumptions, neither Middlefield Funds nor the portfolio manager can assure that actual results will be consistent with these FLS. The reader is cautioned to consider the FLS carefully and not to place undue reliance on FLS. Unless required by applicable law, it is not undertaken, and specifically disclaimed that there is any intention or obligation to update or revise FLS, whether as a result of new information, future events or otherwise.

This material has been prepared for informational purposes only without regard to any particular user’s investment objectives or financial situation. This communication constitutes neither a recommendation to enter into a particular transaction nor a representation that any product described herein is suitable or appropriate for you. Investment decisions should be made with guidance from a qualified professional. The opinions contained in this report are solely those of Middlefield Limited (“ML”) and are subject to change without notice. ML makes every effort to ensure that the information has been derived from sources believed to reliable, but we cannot represent that they are complete or accurate. However, ML assumes no responsibility for any losses or damages, whether direct or indirect which arise from the use of this information. ML is under no obligation to update the information contained herein. This document is not to be construed as a solicitation, recommendation or offer to buy or sell any security, financial product or instrument.

  • BNN Bloomberg
  • BNN Bloomberg’s Market Call: Shane Obata – July 5, 2023 (Full Interview)
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