Joel Shulman CIO, CEO, Founder, EntrepreneurShares Market Update (08/15/23)
EntrepreneurShares — First Thematic Investment Strategy in Entrepreneurial, Disruptive, Innovative Stocks
NVDA CONTINUES TO RISE, BUT MAY NOT BE A “BARGAIN” HEADED INTO EARNINGS ON 8/23
o EntrepreneurShares has owned this stock since 2005 o NVDA was a $5 stock on 12/31/2014 (stock is now $435--increased 90X in last 10 years) o NVDA is a tremendous company but has appreciated 260% since last October o Valuations are now stretched to limits o Stock has potential to rise further w/speculative trading and passive indices pushing stock higher o Stock appreciated approx. 20% from last earnings to recent highs then returned to same levels as last earnings report (approx. $400) o Yesterday the stock appreciated 6%, but our firm is not chasing o EntrepreneurShares has had a long term overweight, but has recently placed stock as an underweight
o YIELD CURVE HAS INCREASED AT LONG END — BUT NO DANGER YET o Most of the recent action related to the yield curve (Fitch & PPI) has been to long-end of the curve o 5yr, 10 yr and 30 yr rates have all increased o Rates have increased approx. 30 to 40 basis points from February o 30 yr rates at 4.25% are still well below historical levels (e.g. 8/31 2007 — 4.85%; 8/31/1981 — 14.8%) o Long Term treasuries may be overbought — hedge funds are shorting (offset risk on equities) o Speculative stocks will need to adjust with higher rates (most of impact is over) o Economy is resilient — no major danger yet o Fiscal policy needs to be addressed — Fitch highlights systemic problems with National Debt RESILIENT ECONOMY HAS, SO FAR, AVOIDED DISASTER o Inflation is under control and continues to (generally) decline o Unemployment rate is low and has recently dropped (3.6%) o Long term rates, though rising in recent days, are still well below historical averages o Rising 30 year bond rates can cause problems for regional banks that invested long-term o Mortgage rates above 7% should slow down real estate market o Mortgage rates (30 yr fixed) are now at highest levels since July 2001 (22 yr ago)
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