WorldlyInvest Weekly #6
Global Market Performance; Why Trade Wars Break Markets; TheImportance of Stealth Monopolies; The Growing Power Demands of Big Tech Companies; MSFT, GOOG & AMZN
DISCLOSURE: The following weekly edition contains an affiliate link to Amazon. If you purchase through this link, I may earn a small commission at no additional cost to you. Your support helps keep this newsletter free and focused on delivering high-quality content for you.
Quote of the Week
An essential component of our education is to learn from our mistakes-and if we don't make mistakes, sometimes we may not learn at all.
— GUY SPIER
ICYMI
My write-up on a high-quality microcap that is cheap
The Best of the Week
It's a small world, after all!
In his latest data update for 2025,
explores global market performance, highlighting disparities in equity returns, exchange rate effects, and valuation metrics across regions. While global market capitalization grew 12.17%, much of this was driven by strong U.S. equity markets, continuing a trend where global diversification has underperformed U.S.-centric investments. Emerging markets showed mixed results, with Argentina leading in returns (even after adjusting for inflation) and Brazil among the worst performers. Damodaran also analyzes the impact of currency fluctuations, emphasizing how a strengthening U.S. dollar affected emerging markets more than developed ones. Additionally, he examines equity risk premiums (ERP), showing higher risks in emerging markets that necessitate greater expected returns. In terms of valuation, India, the U.S., and China remain expensive markets, while Latin America and Eastern Europe appear cheaper but come with significant risk. Lastly, he warns of growing global trade tensions, with tariffs and economic nationalism potentially reshaping investment dynamics.Read Damodaran’s full update HERE
You Can’t Miss These Readings
Why Trade Wars Break Markets—And How to Profit from the Chaos
explains how escalating trade tensions and economic uncertainty create volatility in financial markets.Stealth Monopolies
A great essay by
discussing "stealth monopolies" - companies that dominate narrow market niches without attracting much public attention. Read if you want to identify stealth monopolies.AI-Driven Convergence: Energy, Power, and Technology
says that the growing power demands of Big Tech companies, particularly for AI and data centers, are reshaping the energy sector and challenging "net-zero" ideologies.Weekly Term from The Satirical Dictionary of Finance
MAG 7: In 2024, it's not a Western—it’s a tech-heavy stock lineup driving the market while everyone else watches from the sidelines. These seven giants are like the cool kids at a party: dominating the dance floor, but leaving you wondering if the music will ever stop.
Recommended Book
Buffett and Munger Unscripted: Three Decades of Investment and Business Insights from the Berkshire Hathaway Shareholder Meetings
New book by
! IIn 2018, Berkshire released the archives of the annual meetings going back to 1994. Alex Morris watched hundreds of hours of video from these annual meetings (as well as the six AGMs held since 2018), covering more than 1,700 questions asked by shareholders over the past 31 years. He then gathered, organized and edited the most interesting material into a comprehensive and accessible form.
Stock Ideas
Microsoft Q2 2025
writes an update on Microsoft’s Q2 results:Strong revenue growth in cloud and AI services, with total revenue up 12% to $69.6 billion and operating income up 17%
Azure’s 31% growth fell short of market expectations (33%), disappointing investors.
Sanjiv also discusses the impact of DeepSeek’s low-cost AI model, which raised concerns about the massive AI infrastructure investments made by Microsoft and its competitors.
Alphabet 4Q'24 Update
provides a mixed analysis of Alphabet's latest earnings, highlighting steady revenue growth but slowing momentum in key areas:While Google Cloud revenue growth decelerated to 30.1% from 35% in Q3, AI-driven search innovations like AI Overviews and Circle to Search are showing promise, especially among younger users.
YouTube ad revenue grew 14%, boosted by U.S. election spending, but may face tough comps in 2025.
Google Cloud margins improved, but capital expenditures surged 63% YoY, with $75 billion planned for 2025 to meet AI demand.
Amazon 4Q'24 Update
makes an update on Amazon’s recent results:Amazon's retail segment showed strong growth and margin expansion, with the highest operating margin in North America since 2013.
AWS revenue growth remained steady at 19% year-over-year, with Amazon expressing optimism about its future prospects in AI and cloud services.
Amazon's CAPEX is expected to reach $105 billion in 2025, primarily to support technology infrastructure for AWS and AI services.
Thank you for the shoutout to "Buffett And Munger Unscripted"!