Cavalry Vanguard

📉 Opinion: As an investor who follows Warren Buffett's principles, it is crucial to remember that successful investing is not based on predicting short-term market fluctuations, but on identifying and holding assets whose #intrinsic value exceeds their current price. In this sense, the idea of ignoring daily market swings has merit, but we must be aware that even in a long-term approach, strategic adjustments need to be made when valuations deviate drastically from reality. 🔍 Analysis of indicators such as #CAPE, forward #P/E, and the Federal Reserve model suggests to us that the market, as a whole, is currently overvalued. This may be an indication that the safest and most profitable opportunities may not be in large US stocks at the moment, but perhaps in more undervalued assets such as foreign stocks or corporate bonds. However, the key here is not a knee-jerk reaction to this data, but a disciplined approach based on an assessment of intrinsic value. Warren Buffett has repeatedly shown that the wisest investment decisions are made outside of market emotions and based on careful analysis of true value. It's not about ignoring signals of overvaluation, but rather using these signals to reinforce our strategy, ensuring that we are buying #assets when they present a clear and sustained margin of safety. 📈 Lessons and strategy: Ben Graham, Buffett's mentor, spoke of the "margin of safety" as the fundamental principle of intelligent investing. This margin applies not only to the selection of individual stocks, but to the market as a whole. In an environment where indicators suggest that large #stocks are overvalued, the discipline of staying focused on intrinsic value becomes even more important. Over the long term, history shows that markets tend to correct themselves and that returns are often lower when valuations are extremely high. However, it also shows that those who maintain a value-based approach, buying with a margin of safety and avoiding panic or euphoria, are the ones who ultimately reap the rewards. The current situation reminds us that while markets may be overvalued in historical terms, smart investing is still a matter of discipline, patience and an accurate assessment of intrinsic value. Ignoring daily market swings is wise, but adjusting our portfolios when valuations deviate significantly is also essential. It’s not about timing the market, but ensuring that every investment we make is backed by a solid margin of safety.

Why are Central #Banks Buying Gold at Record Levels? In recent years, we have seen a significant increase in gold purchases by central banks globally. This strategic move is driven by several key reasons, which reflect the complexity of the current economic and geopolitical environment: 1. Reserve Diversification Central banks, especially in emerging economies, are seeking to diversify their international reserves to reduce dependence on the US dollar and other strong currencies. #Gold is presented as a safe option, as it is not tied to any particular #economy. 2. Protection against Inflation In a context of high global #inflation, gold has historically stood out as an #asset that protects value against currency devaluation. Central banks are increasing their gold reserves as a preventive measure to safeguard the purchasing power of their economies. 3. Geopolitical Uncertainty Political and geopolitical instability, such as the conflict in Ukraine and tensions in Asia, have increased demand for assets considered safe havens. Gold, because of its ability to maintain its value in times of crisis, is a preferred choice for central #banks. 4. Distrust in the Global Financial System Concerns about the stability of the international financial system, driven by rising debt and expansionary monetary policies, have led central banks to secure their reserves with tangible assets such as gold. This is perceived as a hedge against potential systemic risks. 5. Long-Term Strategy Some central banks are accumulating gold as part of a long-term strategy to ensure economic and financial stability. In a world where the monetary landscape could change dramatically, gold is seen as a key strategic asset. 6. Internal Financial Stability For certain economies, holding large gold reserves can increase confidence in their internal financial system. This is particularly relevant in countries where the local currency faces credibility challenges, as gold can strengthen the perception of stability. 7. Preparing for New Monetary Frameworks Amid speculation about possible changes to the global monetary system, central banks may be stockpiling gold in preparation for a future where gold plays a more prominent role in the international financial architecture. #CavalryVanguard #Gold #Sell

📌 Allianz, Europe's largest insurer, has reported strong financial results for the second quarter of 2024, beating market expectations despite facing higher claims from natural disasters. The company recorded a net profit of €2.51 billion, beating both the results for the same period last year and analysts' estimates. Allianz's operating profit grew by 3.7% year-on-year to €3.91 billion, with a notable increase in total business volume, which rose by 7.5% to €42.5 billion. Despite challenges in the general insurance segment, where losses from weather conditions and riots affected results, the company's diversification allowed it to maintain a solid performance in other areas such as life and health. In addition, Allianz announced the expansion of its share #buyback programme, with a new tranche of €500 million to be executed between August and December 2024. This move underlines the company's confidence in its long-term strategy and the strength of its operations. With an improved solvency ratio of 207% and third-party assets under management at levels not seen since 2022, Allianz is well positioned to face the challenges of the second half of the year. Analysts have highlighted the underlying quality of the business and the effectiveness of its diversification, which has driven the company's shares up 1.7% in early trading.

📌 The world's major #economies, the United States and #China, are showing signs of weakening consumer spending, raising concerns among multinationals. While in #China the spending slowdown is due to a crisis in the housing market, wage pressures and a climate of economic uncertainty, in the United States, the impact of high inflation and rising borrowing and input costs is limiting consumption, especially among lower-income households. Companies such as PepsiCo, McDonald's and The HEINEKEN Company have reported falling sales and profits, affected by the decline in consumption in both China and the United States. These companies, along with other large corporations, have warned that the double whammy of the economic slowdown in both nations could significantly impact their future results. In the United States, even though inflation is beginning to moderate, the cumulative impact of years of price increases is putting pressure on household budgets, while in China, consumers are prioritizing savings in the face of economic uncertainty. Business leaders are highlighting the need to adopt creative strategies to generate growth in this challenging environment, as they face an increasingly complex and uncertain global scenario. This situation highlights the fragility of the global economy and the need to adapt to an environment in which consumer spending, a key driver of economic growth, is under pressure in the world's two largest economies. #CavalryVanguard

📌 The Reserve Bank of India (RBI), under Governor Shaktikanta Das, today announced the decision to maintain its policy repo rate at 6.50 per cent, amid persistently high inflation, largely driven by high food prices. Addressing the monetary policy committee meeting, Das highlighted that the Indian economy is showing signs of robustness, projecting real growth of 7.2 per cent for the fiscal year ending March 2025. This figure, unchanged from the last estimate in June, reflects the RBI’s confidence in the country’s economic fundamentals despite recent global turmoil. The key challenge remains #inflation, which stood at 5.1 per cent in June, exceeding the RBI’s target of 4.0 per cent with a tolerance band of 2 per cent. Das acknowledged that progress towards price stability has been uneven, underlining the need for continued vigilance to ensure that inflation moves sustainably towards the target while supporting #economic growth. The #RBI had earlier raised its interest rate in response to the crisis triggered by the war between Russia and Ukraine as well as the post-COVID-19 recovery. It has since kept this rate steady, reflecting a cautious stance in the face of persistent inflationary pressures. Economic growth of 8.2% in the previous fiscal year was driven by government spending on infrastructure and improvements in key sectors such as manufacturing and construction, highlighting the resilience of the Indian economy in the face of both internal and external challenges. In short, the #RBI has chosen to maintain monetary stability in a context of elevated inflation, seeking to balance price containment with support for economic growth, thereby reaffirming its commitment to India's long-term economic stability. This conclusion reflects the RBI's resolve to prudently manage monetary policies to mitigate the effects of inflation while fostering sustainable growth, thereby ensuring the country's economic stability in an uncertain global environment. #CavalryVanguard

📌 It is impressive to see how the Asian manufacturing sector has shown remarkable resilience, even in the face of persistent challenges such as inflation and fluctuating demand. The recent S&P Global Purchasing Managers' Index (PMI) data, which indicates new order growth in the #ASEAN region reaching its highest level in 15 months, is a testament to the dynamism and resilience of this region. Our analysis highlights a crucial point: strengthening demand conditions have allowed companies to not only increase production but also hire more staff. This is a clear indication of an expanding economy and growing confidence in the future. However, inflationary pressures remain a significant concern, forcing central banks to keep a close eye on monetary policies. Particularly interesting is the varied performance across different Asian economies. #Taiwan and South Korea stand out for their solid growth in output and new orders, driven by demand for high-tech exports. However, these countries also face challenges, such as capacity constraints and logistics disruptions, which could hamper sustained growth. The situation in China presents a different nuance. Despite the slowdown and the PMI falling into contraction territory, the sector has largely stabilised. Our Analysts suggest that this slowdown is a temporary moderation after a period of intense activity, rather than a sign of sustained weakness. This provides a hopeful outlook for the immediate future of the Chinese manufacturing sector. In contrast, the #Japanese manufacturing sector faces a gloomier picture, with a fall in new orders and a significant increase in input prices. This combination could limit near-term growth prospects, underlining the importance of innovation and efficiency in production to maintain competitiveness. India, on the other hand, continues to show impressive growth in its manufacturing sector, although it also faces considerable inflationary pressures. Pranjul Bhandari’s observation on the continued rise in the producer price index highlights a major risk: inflation could delay interest rate cuts, potentially affecting the pace of growth. Finally, the overall outlook for the manufacturing sector in Asia, Our Professionals, suggests that below-trend global growth could weigh on #manufacturing activity in the region in the near term. However, the resilience demonstrated so far provides a solid foundation on which to build, adapting to new economic realities and maintaining a proactive stance in the face of challenges. Our Analysis provides a comprehensive and nuanced view of the current situation of the Asian manufacturing sector. It is a reminder of the importance of adaptability and resilience in times of uncertainty, and underscores the crucial role of continued innovation and strategic management in building a sustainable and prosperous future for the region. #CavalryVanguard

📌 The Bank of #Japan's recent adjustment to a more conventional monetary policy marks a significant milestone in its long-standing economic strategy. By raising the benchmark interest rate to 0.25% and halving government bond purchases, the central bank is seeking to manage an economic environment transformed by inflation and global dynamics. This step represents a gradual return to positive interest rates, abandoning ultra-loose policies that dominated the past decades. The decision reflects a paradigm shift within the Japanese central bank, which is now moving away from direct bond market manipulation and opting to allow for more natural conditions. The initial impact has been felt in financial markets, with the yen strengthening against expectations of higher domestic yields, potentially attracting investment back to Japan. This adjustment could also influence global investment flows, especially compared to the United States, where the Federal Reserve is considering cutting rates. Despite these changes, the Bank of Japan maintains that conditions will remain accommodative to support economic activity, recognizing that real interest rates remain negative. The transition to a more normalized economic environment reflects a new focus on growth and interest rates, challenging the conventional wisdom that higher rates inhibit economic development. 🚩 In conclusion, this adjustment by the Bank of Japan not only marks a shift toward more conventional monetary policy, but also reflects a response to current economic realities and inflationary pressures. The way forward will involve closely monitoring how these measures affect both the domestic economy and global financial markets, in a context where central bank decisions have significant repercussions around the world.

📌 The growing reliance on artificial intelligence and automation across various industries poses an underappreciated but critical threat: the erosion of practical skills development among young workers. This is especially evident in the field of surgery, where surgical robots have revolutionized the way we operate. These robots, which make life easier for experienced surgeons by allowing them to perform procedures more quickly and accurately, are also relegating residents to a passive observer role. I have observed firsthand how residents, who were once actively involved in procedures, now barely have a chance to practice. Instead of operating for the majority of a multi-hour procedure, many residents are given barely a few minutes to interact with robots. This lack of practice is resulting in newly graduated surgeons who lack the experience needed to handle a variety of basic procedures when they enter the workforce. This phenomenon is not limited to medicine. In many industries, advanced technology allows experts to work more independently, decreasing the need to involve novices in crucial tasks. Senior engineers can design and model processes without the help of junior engineers, and managers can make decisions based on data analysis without consulting less experienced employees. The result is a generation of professionals who, while technically competent, lack the depth and diversity of skills that are acquired through practice and direct mentoring. We are sacrificing skill development and human connections on the altar of efficiency and productivity. To meet this challenge, it is essential that organizations find a balance between technology adoption and preserving learning opportunities. Mentoring programs must be strengthened and adapted to ensure that novices have the opportunity to learn from experts, even in a highly automated environment. Without this intervention, we risk creating a workforce that is ill-equipped to meet the challenges of the future and that lacks the ability to innovate and lead.

📌 In the buzzing debate over the risks of artificial intelligence (AI) to the workforce, the dominant narrative often focuses on one overriding fear: technology displacing workers. Yet beneath this obvious surface, AI poses a more discrete and pernicious threat—one that, if left unaddressed, will have profound repercussions for businesses and their workers. This reflection stems from a disturbing observation: the way we manage AI is hindering the acquisition of skills by young workers. For more than a decade, I have researched how intelligent technologies, such as robots and AI, are transforming work across a variety of industries. An emerging pattern reveals that while these technologies increase the efficiency of experts, they do so at the expense of training novices. Consider the surgical setting, where robots enable experienced surgeons to perform operations more quickly and accurately. Previously, these complex procedures required cooperation between a senior surgeon and a resident, with the resident actively learning by participating in critical tasks such as incisions and suturing. Now, robotic efficiency allows the surgeon to operate almost autonomously, relegating the resident to a passive observer role. Less practice, less learning. This erosion of hands-on learning opportunities is replicated across industries. In process engineering, experts use advanced software to model on their own, excluding junior engineers from a valuable learning process. In warehouse management, managers rely on automated analytics rather than collaborating with less experienced employees to understand workflows and staffing. The consequences of this trend go beyond individual skill loss. We are sacrificing professional development and mentoring ties in the name of productivity. Regardless of role, seniority, occupation, or industry, without collaboration with experienced mentors, young workers do not learn effectively and cannot keep up with market demands. This not only stifles career growth, but also prevents organizations from advancing and innovating, as they lack the deep knowledge that only comes through shared experience. Decades of research support the importance of collaboration between experts and novices for skill development. Traditionally, novices observe, assist, and gradually take on greater responsibilities under the guidance of a mentor. This mechanism, essential for learning and professional growth, is breaking down in the face of the increasing independence that technology confers on experts. My observations and the data of other researchers reveal a destructive dynamic that is affecting multiple sectors. AI and smart technologies, while promising increased efficiency and productivity, are inadvertently undermining the fundamental learning process that has underpinned professional development for generations.

📌 Amazon's Echo speakers represent an example of an ambitious but challenging market strategy. Launched in 2014 under founder Jeff Bezos, Echo devices followed a similar model to Gillette: selling the hardware at a low cost in hopes of turning a profit through complementary services. However, unlike Gillette's razors, significant benefits did not materialize for the Echo speakers. Although hundreds of millions of Alexa-enabled devices found their way into consumers' homes, they were primarily used for free applications like setting alarms and checking the weather, rather than generating substantial revenue through spoken purchases on Amazon. This situation resulted in significant losses for Amazon, with more than $25 billion lost in its device business between 2017 and 2021. With the arrival of Andy Jassy as CEO in 2021, Amazon has begun to reevaluate its approach. Jassy is trying to close the financial hole created by this initial strategy and is launching a paid version of Alexa as part of a plan to reverse the losses. Despite internal concerns about the viability of this new measure, Amazon remains confident that its device division has the potential to be profitable. The company highlights that hundreds of millions of Amazon devices are used globally, an indication of its long-term success. Part of the problem lies in an internal Bezos-era metric called "downstream impact" (DSI), which assigns a financial value to a product based on subsequent spending by customers within the Amazon ecosystem. Although this metric has justified Echo's losses for years, Jassy is reconsidering its usefulness and relevance in Amazon's current business strategy. In summary, Amazon is at an inflection point where, under the new leadership of Jassy, it is adjusting its strategies to transform innovative but loss-making products into engines of profitability, learning from its past experiences to ensure a stronger and more sustainable future. #AMAZON #AMZN