Tourerists

Today, I'm just sharing a thought about the management of family finances. I liked this post on Twitter (sorry, sorry, X) by Doug Boneparth. He's a wealth manager in New York, and a colourful member of the "fintwit" community. I agree with his comment below.

Eddy Elfenbein discussed the ongoing rivalry between growth and value stocks in his latest blog post. He made this telling point: "Typically, when growth beats value, it's a long, steady grind, but when value leads growth (like in 2022), it's short and brutal.

I would rather be in the camp that experiences long periods of steady outperformance, as opposed to benefiting from short bursts of glory whilst everything else is taking strain.

Short sellers have a similar, contrarian mindset. Michael Burry is a famous permabear, and developed a theory about the housing market being overvalued in 2006, but had to wait for over two years while his clients' money withered away, before his thesis played out. It nearly drove him insane. Yes, he made a lot of money in the end, but that's a very difficult path to getting rich.

We don't like to put ourselves in a box when it comes to growth versus value. We love stocks that have upside potential because they are currently out of favour, but only if they are growing revenues at the same time.

There are mass protests against tourists happening in Barcelona. Residents went around spraying tourists with water, telling them to go home. You can see some visuals here, courtesy of the BBC.

It's interesting how people in rich countries view tourism. I understand that having a busy city during summer is annoying, but harassing tourists is taking things to a whole new level. In South Africa, we are trying to attract as many people to the country as possible, because they create good jobs and stimulate economic growth.

If I was a betting man, I would wager that just about everyone in the anti-tourist protest has unacknowledged links to Barcelona's tourist industry, and benefits indirectly from visitor spending. These protests remind me of the story about a UK flower merchant who voted in favour of Brexit, but was surprised when the divorce from the EU halted his cheap supply of Dutch flowers.

I'm sure there is a better way to deal with tourists than spraying them with water. Find win-win solutions so the foreign visitors enjoy their stay in the 2 000-year-old city, but encourage them not to treat it like a cheap theme park.

Amazon (NASDAQ:AMZN) Web Services (AWS) has unveiled its fourth-generation Graviton processor. The Graviton4 chip promises significant improvements, delivering three times the compute power and memory of its predecessor, 75% more memory bandwidth, and 30% better performance.

The chip industry, valued at $544 billion, is crucial for the global economy and is expected to exceed $1 trillion by 2033, due to rising AI demand. Big tech companies like Amazon, Apple, Google, and Microsoft (NASDAQ:MSFT) are developing custom chips to meet their needs, reduce costs, and offer better options to customers.

Nvidia currently dominates the GPU/AI chips market with over 82% share. While AWS's Graviton4 is not an AI chip, it supports AWS's AI-focused Inferentia and Trainium chips, which compete with Nvidia's powerful AI chips. AWS aims to provide cost-effective alternatives rather than directly competing with Nvidia. In other words, leave all the hard tasks to Nvidia chips, and have the in-house chips work on easier tasks.

AWS also designs its own chips and rents them out at $0.02845 per hour of computing power. This strategy helps AWS power its cloud infrastructure and reduce IT costs for customers. The company's in-house chip development efforts include a new large language model, potentially rivaling OpenAI's ChatGPT.

In local company news, Pick n Pay (JO:PIKJ) received shareholder approval for its R4 billion rights offer. The proceeds from the capital raise will be used to pay down some debt, list Boxer on the JSE, and help with its turnaround.

US equity futures are unchanged pre-market. The Rand is currently at around R18.11 to the greenback. Vestact's AUM surpassed R12 billion for the first time last night.

US inflation data is due out today. The core Consumer Price Index (CPI), which excludes food and energy costs, is projected to rise by 0.2% in June for the second consecutive month. This would be the smallest back-to-back increase since August.

Keep chugging away. See you tomorrow.

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