Monday
A vestige of my formative career focused on the Asian technology sector is I am an early riser, so my days always start in a household still asleep as I digest and summarise on the team chat any takeaways from Asian markets. Given the recent market volatility – notably in Korean memory stocks – and with many market participants focusing their weekend reading these days on X and Substack commentaries (often with dubious authorship), the challenge is always to dissect actual changes in fundamentals versus false narratives to justify stock moves.
Mondays tend to be quieter days with no results and fewer meetings so it’s always a day I look forward to as I get to do my favourite part of the job, which is researching companies. We have a relatively unique team model where the portfolio managers are also the primary analysts on technology sub-sectors, so I’ve covered semiconductors for over two decades. Don’t let anyone tell you it’s completely different this time or that semiconductors are not cyclical! We think this dual role is important, not just to leverage our experience to navigate technology hype cycles, but also to harness major new technology waves and identify the new leaders within them.
September conference season will soon be upon us and I’m travelling to New York soon for a technology conference. I’ll be meeting 20 companies over three days, so preparation is important to get the most out of the conference and identify new ideas to act on quickly but with conviction. Last year’s conference was a fruitful one as we added a couple of strong stocks. Plus I got to meet John McEnroe and returned home with a signed, supersized tennis ball, which made me popular with my tennis-mad sons. Monday evenings are always spent playing tennis with them, and while age and experience seem to benefit me as a portfolio manager, unfortunately the same cannot be said on the tennis court, where my eldest is now routinely beating me with depressing ease.
Tuesday
The last week of August is a little bit like going back to school, with the whole investment team in place post-holidays. While the team is constantly chattering away on the team chat, sharing newsflow and insights as well as sending around their research and results notes from wherever they might be, having everyone around a desk is always more powerful. We had our formal monthly meeting today where we discussed and shared our thoughts on the latest market and technology debates, changes in conviction, the problem children of the portfolio and new ideas that we are all working on.
The end of the summer is always a time to reflect, but this year especially so, after the rollercoaster of the past few months, and before we head into the last few months of the year, conference season and potential large imminent IPOs such as Anthropic.
I talked through with one of our graduate investment analysts his new research note on Take-Two Interactive before he heads off to a video games industry conference for the rest of the week. Heading into the long-awaited launch of GTA VI, he has been doing some analysis of what the game and a more meaningful online monetised version will do to the earnings power of the company. My role is to provide some experience and context for that debate and an investment framework that will accelerate that learning curve.
But, ultimately, getting on the ground, meeting industry participants and companies is the best way to build your knowledge and conviction. I was hired straight out of university in 2004 by Katie Potts at Herald and, having studied history, I was thrown in at the deep end with a trip to China. I was blown away by the PC game cafes where millions of people were playing massive multiplayer online games simultaneously, and the first investment I ever made, off the back of that trip, was a Chinese online games company, NetEase.
Wednesday
An early start for a client webinar for our Asian clients. In a year that has already thrown at us Venezuela, Iran, a SaaSpocalypse, a new Fed Chair and Situational Awareness blowing up, it’s important to remind our clients that we remain early in a new AI technology wave. Time in the market, and not timing the market, is key, and volatility and risk are not the same thing. Regular interactions and being honest in our views on technology and markets is the key to building trust with our clients, allowing us to be their partner of choice to navigate the hype cycle of technology for them.
It’s also Nvidia results day. So much coverage is devoted to the company earnings by the media and the 80+ sell-side analysts covering the stock, and yet I would argue the results themselves are a sideshow, given the market debate is much more around the sustainability of AI capex, circular financing and Nvidia’s competitive positioning. Given the near-term unprecedented transfer of free cash flow from the hyperscalers to semiconductor companies, particular focus will be on the growing role Nvidia is playing in filling some of that AI capex funding gap via financial guarantees. Results hit at 9.20pm, which gives some time to digest the numbers before the call at 10pm, and then I look to get my note out to the team as well as some snippets for the media at around midnight.
Despite all the attention and strong results over the past year, the share price reaction has been a damp squib, but investors were certainly shaken from their slumber when the CFO casually mentioned straight out of the gate that they expect to grow 70% next year — well above expectations, sending the stock soaring. It is incredible for a company their size to be growing so fast, and reinforces the message that we still remain relatively early in this technology wave and the resultant new markets tend to be much larger and more durable than expected. With significant new disclosures on their financial guarantees, plus growing shareholder returns as their free cash flow grows exponentially, this is a very important update for the sector and the broader AI debate, so when I do finally get to bed, I’m looking forward to tomorrow!
Thursday
After the excitement of Nvidia’s results, there are also plenty of off-cycle software results to digest by the team as well. The SaaSpocalyse is still in recent memory, but we’ve never believed you can invest by sub-sector top down and it’s more about bottom up stock picking. That’s harder in an ETF-driven world, but our conviction in cybersecurity and data infrastructure names has been rewarded as part of the greater intra-sector stock dispersion we have seen of late, and we have been adding some new software names. Results are less about T+1 share price reactions for us and more about validation of our investment theses, whether conviction is going up or down and what we should be doing with our position sizing.
I run a few portfolios, and today I was catching up on the Bankers Investment Trust I manage with some of the other contributing portfolio managers in Japan and Asia, as well as the Chairman. I really enjoy hearing insights from specialists and investors on the ground, as well as sharing our perspectives from the technology sector; it is that knowledge shared that makes us stronger investors.
This investment trust dates back to 1888, so the weight of history is keenly felt as I take it forward on its latest chapter, following Alex Crooke’s retirement after almost a quarter of a century. It is also full circle from a personal history point of view, given my career started at Herald Investment Trust. Sadly, the impact of Saba has been keenly felt at Herald and I wish Katie and her team all the best under new ownership.
Friday
Today, I’m pitching for a sizeable pension mandate with an institutional client in Hong Kong. While fund managers do have to sing for their supper, there is also great satisfaction in helping our clients achieve their financial goals. I love hearing stories from clients that we helped them retire early or in some way we made their lives better. Hong Kong also holds special memories for me as it is where I worked for a few years and, more importantly, where my eldest son was born. It is fantastic to see the city back to its vibrant best and will always remain a home-away-from-home with many dear friends there.
There are more off-cycle results, with Marvell reporting last night — a stock that we have been investors in for much of the past decade, but are currently on the sidelines. With the recent Google deal potentially providing $120bn in future revenues, I am reassessing the stock and expect my meeting in New York with management and the investor day on the 6th October to provide useful insights to build further conviction. In all my years as a semiconductor investor, I have never seen a new technology like AI so correlated to compute, memory and networking and consequently having such a prodigious impact on the earnings power of these companies.
Finishing off the week, I have my youngest son’s birthday to look forward to tomorrow. He was born just after I joined Janus Henderson in 2014 so a bit scary to see him almost a teenager today! I’ve worked with my co-managers Graeme Clark and Alison Porter for 12 years now and we always joke the pictures of our children in our offices need to be updated, as they are so much bigger now. Investing can be a stressful job and having friends, colleagues and family that you can share the successes, failures and everything in between with is the only way to have a long career as a fund manager.
