Forum Topics Super holdings
Chagsy
Added 4 years ago

I have COVID.

I've been treating COVID patients for several years now, and never got it. Every single other member of my department has had it at least once. I got slacker and slacker with my PPE and hand washing and still nothing. My mask technique slipped and I remained unaffected. I began to think I had a COVID-immunity superpower which was reinforced as the months went by and I remained the sole person to not go down.

It seems I am not in possession of a super power after all.

So, I am sulking in the spare room with the dog for company and cursing my stupidity.

The worst symptoms have worn off now, I have a day or two to kill and so I have decided to procrastinate completing my tax returns until the very last moment, and instead perform a not particularly useful, but mildly entertaining review of some of my Super holdings. Hopefully these will be of some use, albeit quite a different theme to the majority of companies reviewed on Strawman.

This was prompted by the following article which highlighted how certain tech firms have crashed and burned and others are expected to do quite well over recent years. I have a tendency to choose tech related companies, so was of particular interest to me. The only holding in the Lockdown Lunacy Index I hold is Shopify, which in retrospect I should have taken profits on when it was absurdly overvalued last year. Oh well, another lesson learnt.

The tech winners and losers of the pandemic

As Zoom and friends tumble, the software that underpins daily life thrives

Sep 1st 2022

How worrying is this return to Earth? To be sure, some of it reflects gloomier prospects for the global economy, racked by inflation, war and rising interest rates. And it is disappointing that two years of digitisation and remote work have not provided clear evidence of a productivity boom. Yet there are reasons still to be techno-optimistic. Much of the early enthusiasm may simply have been focused on the wrong types of firm. Though the pandemic darlings have fizzled, the shift towards ever greater digitisation continues. The true winners are not the flashy consumer-tech firms, but the companies that provide the infrastructure to enable this shift. 


Much of the decline of our lockdown index reflects shakier business models. On August 22nd Zoom reported that its year-on-year revenue growth had fallen to 8%, the lowest rate since the company listed in 2019. Three days later Peloton reported a nearly 30% fall in its quarterly sales, compared with a year ago. Subscribers are fleeing Netflix for other viewing platforms, such as Disney+. Robinhood is laying off a quarter of its staff as day traders cool on the markets. 

The fading work-from-home boom has affected the demand for hardware, too. Worldwide pc shipments are expected to decline by 10% this year; analysts reckon mobile-phone sales will tumble by 7%. A downturn in spending on video games and a series of crypto implosions have dented the sales of the powerful semiconductors used to mine digital currencies and render computer graphics. 

Look beyond the boom and bust of consumer tech, though, and you see the real successes. The market for the infrastructure technology that underpins people’s daily lives, such as cloud computing, cybersecurity and digital payments, is thriving. The cloud-computing industry is expected to grow to almost $500bn this year, up from $243bn in 2019. Amazon’s cloud offering, the largest in the world, is still growing at 33% each year. It accounted for three-quarters of the firm’s operating income over the past 12 months, and is propping up the tech giant’s ailing e-commerce business. Its closest rivals are the cloud services of Microsoft and Google. Their annual sales are growing by 40% and 36%, respectively.

Cloudification has created new demands for cybersecurity, another tech winner. *The combined revenue at the three largest listed cybersecurity firms has almost doubled since the start of the pandemic. Their market capitalisation has tripled, and has come down only a fraction since the start of the year. Digital payments are another bright spot, thanks to lockdowns and social distancing. Three-quarters of iPhone owners use Apple Pay, up from half in 2019, and nine out of ten American retailers now accept it as a payment method. Almost 200m people in India and China have used some form of digital payment for the first time since the onset of covid. A third of adults in sub-Saharan Africa now have a mobile-money account, up from a fifth in 2017.

*my emphasis (see HACK)

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mikebrisy
Added 4 years ago

@Chagsy get well soon! Appreciate the use of your time. $HACK is on my list to buy when the we get a bit further through this downturn. I owned it for a few years as part of MFPro and did well with it. Its a great way to get exposure to some good US stock. Several of the top ten listing have pretty impressive FCF generation. Generally, I don't choose thematic ETFs, but $HACK is the one exception to that rule. Thanks for the reminder!

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Jimmy
Added 4 years ago

Glad to read you're on the mend Chagsy seems only a matter of time before we all get to experience it.

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Chagsy
Added 4 years ago

Mike, I think I speak for most of us when I say the quality of your contributions has been fantastic. And this reporting season you’ve outdone yourself!

I really appreciate the time, effort and deep knowledge you have shared with the community.

From a purely selfish position I hope you continue your current rate of productivity for many years to come!!

37

Strawman
Added 4 years ago

I second that @Chagsy. And hope you bounce back to full strength soon.

Awesome work @mikebrisy

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mikebrisy
Added 4 years ago

Thanks @Chagsy and @Strawman . And Andrew, really appreciate what you have created here. It is a great concept and the community is making it real!

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reddogaustin
Added 4 years ago

100% that HACK.ASX is an exception to the thematic-ETFs-usually-suck rule.

Cyber security is here to stay. Forever. Its that simple. Those big players will continue to be big and an upstarts will likely be added in time to the underlying index.

I usually top up with a big nasdaq dip.

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Chagsy
Added 4 years ago

Thematic ETFs are definitely a risk. Research shows they usually launch when the price appreciation of the underlying assets has already occurred, seem to underperform the market (because of the previous issue) and often cease to exist after 5 - 10 years.

I wish I could resist them better than I do, but I am a sucker for a good narrative. There are 2 other thematics I would like to have got into early (but dithered until it was too late):

ACDC which has done extremely well. I am not sure of the valuation of most of the companies in this field now and am dubious about the future performance

and

ROBO which has returned ~10% pa. I am not sure when its time for glory will be, but at the end of this tightening cycle might present an opportunity.

My worst forays, were METV down 40%, FTECH down 30%, and CRYP down .......60%!! (Yeah, I got a bit carried away with the whole DeFi and Crypto thing.)

I still hold METV as it mainly consists of bluechip tech companies, many of which have been savaged recently by recent big misses (Nvidia, Meta) but also those that continue to perform well (Microsoft, Apple, Amazon), and companies that I wouldn't normally invest in individually such as games software developers Roblox and Unity. It's a really interesting space, which I suspect may do incredibly well over the long term. It's also an area where I don't have any idea what I doing and would have no chance trying to pick individual companies. The sensible advice would be to not invest outside areas of your own competence, but I think I am happy to take a risk on a small part of my (underwhelming) US portfolio with Stake; ie outside of super.

13

reddogaustin
Added 4 years ago

@Chagsy

I'm constantly wondering about ACDC also. That is a mega trend, and so i don't think its too late to jump aboard. But has this ETF captured the right part of the production chain? Is its mandate setup to adjust as the mega trend continues to jostle? (Ie the right mineral in the right battery type etc) i'm not sure.

ROBO i think is too intangible to at this stage. Are they companies that make will smith robots? Or just invest in ai... because EVERY company will/should be developing ai for their product, whether it be in production chain or as a function to the user.

Disc. I hold neither IRL.

16

edgescape
Added 4 years ago

I noticed Okta is in the HACK ETF. And Okta got hacked recently. So not sure why this is still in the ETF

I remember being interviewed at Okta for a MySQL DBA job. As it was a challenge juggling my project work and learning/preparing for MySQL questions (as I'm more an Oracle person), I didn't end up getting through the interview.

Probably a good thing I didn't get through in the end. Imagine telling people you work for a company that got hacked. Not a good feeling.


5

reddogaustin
Added 4 years ago

I think getting hacked is a way of life now. No business or system will ever be completely secure. And it should be expected in business.

I don't think the ETF would exclude a business for being hacked. They might exclude a business from the underlying index if its products were constantly hacked/didn't provide the cyber security function as advertised, but that is a pseudo business reason, as said company's revenue probably becomes impacted also.

7

edgescape
Added 4 years ago

Okta is already down over 50% from ath of 200+.

While may be the case that it is good value here, it will take time for Okta to remediate any reputation damage. Identity management is pretty competitive industry also now with lots of players including Microsoft, Google, AWS, Oracle etc. So that moat that okta created has a likely chance of being eaten up.

That's also the issue with most software companies - they have to keep throwing lots of resources to maintain "innovation rent".

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