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Become a Better Investor Newsletter – 8 June 2024

Noteworthy this week

  • Bond/Gold ratio signals global financial weakness
  • Nvidia gains US$1trn+ and overtakes Apple
  • China dumps US Treasuries for Gold
  • Buffett likes US Treasuries, though
  • US$9trn of US gov’t debt maturing soon

Bond/Gold ratio signals global financial weakness: The ratio can be seen as the relative strength of the global financial system. When the global financial system is being well managed, then paper money (like US bonds) performs well against gold and commodities.

Nvidia gains US$1trn+ and overtakes Apple: Nvidia now has the second largest market cap in the US after Microsoft. Just in the past 32 trading days, Nvidia has gained more than US$1trn in market cap. The 6-week gain is greater than the total market cap of Berkshire Hathaway, which Buffett has spent 6 decades building.

China dumps US Treasuries for Gold: China has been buying Gold and selling US Treasuries in the past decade.

Buffett likes US Treasuries, though: Berkshire Hathaway’s purchase of US Treasury bills has been so aggressive that it now owns 3% of the entire bill market, according to an estimate from JPMorgan.

US$9trn of US gov’t debt maturing soon: This is likely to pressure the Fed to lower rates before the debt matures.

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Weekly market performance

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Chart of the week

Discussed in the Become a Better Investor Community this week

“In case you missed yesterday’s Become a Better Investor community live session, click here to access the presentation. We had an exciting discussion about the copper opportunity and its need.”

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Podcasts we listened to this week

Morgan Housel: Get Rich, Stay Rich

“The skills it takes to get rich are drastically different from the skills it takes to stay rich. Few understand this phenomenon more than Morgan Housel.”

Listen to the episode.

Readings this week

Stock Market Concentration: How Much Is Too Much?

“In this report, we look at concentration over the past 75 years to see where we stand today and to reflect on what it means for active equity managers.”

Download PDF.

Book recommendation

Wealth, War and Wisdom by Barton Biggs

“In Wealth, War & Wisdom, legendary Wall Street investor Barton Biggs reveals how the turning points of World War II intersected with market performance, and shows how these lessons can help the twenty-first-century investor comprehend our own perilous times as well as choose the best strategies for the modern market economy.”

Get the book on Audible or Kindle.

Audible is great; have you tried it? If not, click here to get 2 books for free.

Memes of the week

New My Worst Investment Ever episodes

Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds

In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 1: The Determinants of the Risk and Return of Stocks and Bonds.

LEARNING: Look for key metrics, traits, or characteristics that help them identify stocks that will outperform the market.

Access the episode’s show notes and resources

Published on Become a Better Investor this week

How do you know that the learning you and your colleagues are doing is leading to changes in behavior? In this episode, Bill and Andrew discuss little tests you can do to see if the transformation you’re working toward is really happening.

Listen to How to Test for Understanding: Awaken Your Inner Deming (Part 22)

Advanced Micro Devices Incorporated (AMD US): Profitable Growth rank of 8 was up compared to the prior period’s 9th rank. This is below average performance compared to 640 large Info Tech companies worldwide.

Read Advanced Micro Devices Inc – World Class Benchmarking

Bluestar Adisseo Company (600299 SH): Profitable Growth rank of 9 was down compared to the prior period’s 5th rank. This is poor performance compared to 750 large Materials companies worldwide.

Read Bluestar Adisseo – World Class Benchmarking

Procter & Gamble Company (PG US): Profitable Growth rank of 1 was up compared to the prior period’s 2nd rank. This is World Class performance compared to 550 large Cons. Staples companies worldwide.

Read Procter & Gamble – World Class Benchmarking

In May 2024, we published 4 new episodes of the My Worst Investment Ever podcast. Listen to all of them here.

Listen to My Worst Investment Ever May 2024

DISCLAIMER: This content is for information purposes only. It is not intended to be investment advice. Readers should not consider statements made by the author(s) as formal recommendations and should consult their financial advisor before making any investment decisions. While the information provided is believed to be accurate, it may include errors or inaccuracies. The author(s) cannot be held liable for any actions taken as a result of reading this article.