3Q2024 was dramatic. We started 3Q 2024 with a rigorous debate about the potential of recession after Sahm’s rule was triggered. The Fed later cut 50 bps then across the pacific the PBOC followed suit with its own stimulus plans. Though we are not a macro driven fund, we could not help but to realize something is different about this cycle. In this cycle, central
banks seem to be easing when corporate profits in general are expanding. This cycle is special.

Our Year to 3Q2024 (up to 27 September 2024) performance was at 23.71%. The fund still outperformed many major indices. The challenge today is to stay insulated from all the manic swings of the financial news cycles. For example, the short seller report against Super Micro Computer had a far-reaching ramification in the information technology space. We stayed calm and let the news cycle passed, when many sold their positions.

This quarter we made a few changes that are noteworthy. Firstly, The AI theme is still very strong, and it has broadened out. We selectively deepened our positioning in companies that potentially may become among the first AI beneficiaries i.e. the software industry. Secondly, amid BoJ move that spurred the Yen, we picked up some of the precision tool making companies as we believe those companies are unjustifiably sold off. Those are companies with dominant market share, high profitability, and their products demands are inelastic. Lastly, we expanded our positions in the medical technology space specifically in the genomics. We think that the covid overhang is coming to an end and this sector is starting anew with a much better valuation.

To quote Fei-Fei, “I believe our civilization stands on the cusp of a technological revolution with the power to reshape life as we know it.” As we eagerly anticipate AI's promise for healthcare breakthroughs, productivity gains, and human flourishing, we also seek to reap the economic benefits from companies riding this monumental technological wave.

30 Sep 2024