Charts Of the Month - Jan 2024

Welcome to the Enhanced Value Fund (EVF) newsletter! With Charts of the Month, we’ll be providing you with occasional updates on EVF and sharing interesting charts that have caught our attention in recent weeks.

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Thank you to the friends and connection who sent many charts in the last few weeks, this is now becoming a (n extended) team affair! Please do send along charts you deem interesting or relevant.

Happy New Year!

We’re getting ready to celebrate Chinese New Year here in Singapore, so these weeks between Christmas and CNY are usually pretty slow for business in Asia: a good excuse to read Charts of the Months!

Media update

We joined the educational podcast “Cents of Securities” to discuss Value vs Growth investing, I posted the link to the 15 minutes conversation with Cassidy Clement here.

Market insights

2023 closed with a bang!

Quite a bang-comeback by the Mag 7

Almost an everything bang, a part from China equities, which has been for a while

But China treasuries, where majority of Chinese investors have exposure, are up nicely

And by the way, China equities had a nice inflows recently… Is the bottom in?

Who knows where is the bottom for Chinese equities, but boy, China is #1 in many ways, take robot installations for example

Charlie Munger passed away on 28 November last year, and we know as per the recent filing his investment vehicle hasn’t sold Alibaba as Dec 31st

Now moving to a question that is in the head of many investors: Are markets overvalued? According to CAPE Price to Earnings Ratio the S&P500 is definitely not cheap

But the fight to inflation might have been won

Economy is running healthily

And US manufacturing spending surprised to the upside

… While US companies seems to be doing more with less

Some make also the point that Warren Buffett himself is keeping record amount of cash at Berkshire Hathaway, but the analysis below put things in perspective: as a percentage of total asset numbers seems much more close to the long term average

On the other hand, Buffett is very vocal that keeping dollars is not a good idea in the long term…

Mainly because of the fiscal stimulus, things don’t seem to be slowing down on the inflation front…

Nonetheless, financial operators have been digging into US treasuries, anticipating a recession?

However you look at it, value seems to continue to be found in the Emerging Markets

But EMs are boring, better to bet on AI at 200 Price to Sales ratio!

By the way, on this topic I recommend an interesting podcast by Brad Gerstner and Bill Gurley, they make some interesting points on how the cash flows between AI startups and Tech Mega caps work here

Or, if you don’t have time to listen, just short TESLA and buy NVIDIA

Changi Airport in Singapore seems to have returned to pre pandemic high, even if Chinese travelers are to a large extent Missing In Action

Electric Vehicles adoption slowing down quite a bit, you saw TESLA stock price performance in one of the charts before?

In Shipping: the Suez canal issue is getting worse by the day, don’t look the other way

Many vessel due to go through Suez Cana are not sailing, awaiting for the situation to clear

Utilization rate is tight…

And container freight is spiking again

Thank you for making it so far, if you have any comment or suggestion, make sure you send them in!

The Enhanced Value Fund (EVF) Team

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