Some notes from my recent journal entries, which may interest some.
17/03/2024
The AI bubble is still in full swing, and seems to be supporting a more broad based bull market. My RL portfolio is looking very healthy, with annual returns nearly back up to 20%. I think pre-Covid they reached 25%. Total value has increased by 18% in the past 8 months. Interestingly I could have done even better by not trimming my NVIDIA shares, these just keep going to the moon. I also gave serious thought to investing in Supermicro last June, when the share price was $260, but decided against it based on poor corporate culture. The company has been a major beneficiary of the AI boom, and is now trading at $1065!
23/03/2024
Roper Technologies is another example of a company I researched and liked, but held back from investing on valuation concerns. When I first started researching the company in May 2023 the share price was $460, now it is $556.
No doubt Roper is also benefiting from the AI bubble, but should I be placing less emphasis on valuation if I really like the growth prospects of a company?
Meanwhile NVDA is now a 10 bagger, at 16% of the total portfolio value. Despite my earlier attempt to trim this holding to 10%, a costly move in retrospect, I am now content to let this one run, as we are still in a very early innings of the AI boom.
Given my more than respectable returns, it is easier to be philosophical about the ones that got away, and about profits foregone from selling too soon.
I agree with you @lankypom that you have to go US for good AI exposure - we haven't even got a decent IT sector in Australia, it's one of the smallest sectors in the Aussie market but one of the largest in the US. Interesting you passed on Supermicro due to poor corporate culture - there's a global fund that uses corporate culture as one of their main frontline filters - and they're doing reasonably well actually - see here: WCM Global Growth Limited (ASX:WQG) - Associate Global Partners
Good corporate culture and growing moats are their two main criteria - so they pass on any company with a poor corporate culture and they like ones with good corporate cultures and competitive advantages that are growing, not shrinking. And as is usually the case with any ASX-listed LIC or LIT that holds global rather than ASX-listed shares, they trade at a discount to their NTA:
WCM Global Growth (WQG) February 29 Fund Update
Disclosure: I do hold a small amount of WQG here in my Strawman.com virtual portfolio, and have held them in the past both here and in real life. I am not currently holding any LICs or LITs in any of my real money portfolios, or any shares that are not ASX-listed. If I wanted global market exposure, I would probably do it through WQG or WGB at this point in time. WQG has the better track record of TSRs and portfolio performance, and their fees are quite reasonable; not the old 2 and 20, but instead 1.25 and 10, plus a 0.1%p.a. Admin fee, so more like 1.35 and 10, benchmarked against the MSCI All Country World Index (ex-Australia), and beating that benchmark over all but one timeframe (3 years). I have tried investing directly in US shares in prior years, but it's not for me, I've got my hands full with trying to follow my ASX-listed companies.