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We wanted to help make settling back into your normal routine even easier by sharing some of the top stories you may have missed from TradeSmith Daily this week.
- Currently, only about 10% of the world’s semiconductors are made in the United States, while East Asia boasts 75% of global chip production. And semiconductors are such a vital component of the electronics that we purchase that the industry is expected to grow in value from $573.44 billion in 2022 to $1.38 trillion by 2029. When the United States CHIPS and Science Act was signed into law on Aug. 9, it was a signal that America is aiming to be a hub of semiconductor production, as the law will provide $52 billion to increase the domestic production of semiconductors. We put two semiconductor companies that could benefit from this cash infusion through the ringer in our Buy This, Not That series, and this is the one that came out as the winner.
- Even if people on Wall Street have already made billions of dollars, they are still always looking for an edge. Just a few years back, a group of hedge-fund barons built a new subsea cable connecting London and New York. It was the first new transatlantic cable in a decade. And it had just one purpose: to save users six milliseconds — a tiny fraction of a blink of an eye — on every trade they made. That amount of time saved mattered — a lot. Each of those milliseconds was expected to be worth $100 million in profits. But it’s time for everyday investors to turn the game back in their favor.
- When Berkshire Hathaway Inc. (BRK.A) bought $1 billion worth of Apple Inc. (AAPL) stock in 2016, it came as a surprise to many. After all, Warren Buffett believes that you should only invest in businesses that you understand, and he’s a man who only bought a computer to play bridge. But it turns out that it was one of Buffett’s up-and-coming lieutenants who made the investment, and Berkshire kept adding to that investment. By the time May 2022 rolled around, Berkshire had made $90 billion on AAPL. Near the end of 2021, the company made another “unusual” tech investment. You can see what it is here, and you’ll also learn why owning this company now could provide double-digit returns.
- There’s an old saying on Wall Street, perhaps dating back to the days of J.P. Morgan himself, that “gentlemen prefer bonds.” That may have been true in the recent past. But that preference has completely changed in today’s inflationary environment, and you need to stay in step with the times. Traditionally, the rock-solid, all-weather portfolio allocation for “gentlemen” (and ladies, too) has been the 60/40 portfolio. It has been the bedrock of “prudent” investment management for decades — even long before Senior Analyst Mike Burnick got into this business 35 years ago. But again, everything is different now, and Mike believes that, between stocks and bonds, your hard-earned money will be treated best here.
We hope you have a great rest of your day, and we’ll see you tomorrow for a new issue of TradeSmith Snippets.