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Trader's Diary

Economic calendar

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Definition of terms:
Earnings

Earnings

refer to the profits or net income generated by a company during a specific period.

  • Earnings are a measure of a company's financial performance and are often reported on a quarterly or annual basis.

  • Positive earnings indicate that a company has made a profit, while negative earnings indicate a loss.

  • Earnings can be influenced by various factors, such as revenue, expenses, taxes, and other financial activities.

Code

The code is a unique identifier assigned to a company's stock by the stock exchange where it is listed. It is used to identify the stock in trading and other financial transactions.

Actual

Actual refers to the real or current value or result of something. In the context of IPOs, actual can refer to the actual price or number of shares sold in the IPO, as opposed to the estimated price or number of shares.

Estimate

Estimate refers to a prediction or approximation of something, such as the expected price or number of shares in an IPO. Estimates are often made by investment banks and analysts based on market demand and other factors.

Difference

Difference refers to the numerical or percentage variance between two values. In the context of IPOs, difference can refer to the variance between the estimated and actual price or number of shares sold in the IPO.

Percent

Percent refers to a fraction of 100, often used to express a proportion or rate. In the context of IPOs, percent can be used to express the difference between the estimated and actual price or number of shares sold as a percentage of the estimated value.

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IPOs

IPOs (Initial Public Offerings):

An IPO occurs when a private company sells its stock to the public for the first time to raise capital or money.

The money raised from an IPO can be used for various purposes, such as paying down debt, investing in the company's long-term health, research and development, expanding into new product lines, or purchasing fixed assets.

During the IPO process, the equity shares of private investors

convert into publicly owned shares of the new entity, and early investors may sell their stock once the company's shares begin trading.

The chief benefit of an IPO is to help the company raise money and gain access to the capital markets, allowing for expansion and increasing credibility.

Code

The code is a unique identifier assigned to a company's stock by the stock exchange where it is listed. It is used to identify the stock in trading and other financial transactions.

Name

The name is the official name of the company whose shares are being offered in the IPO.

Exchange

The exchange is the stock exchange where the company's shares are listed and traded. Examples of stock exchanges include the New York Stock Exchange (NYSE) and the Nasdaq.

Currency

The currency is the type of currency in which the company's shares are priced and traded. This can vary depending on the country and stock exchange where the company is listed.

Start date

The start date is the date on which the company's shares begin trading on the stock exchange after the IPO.

Offer price

The offer price is the price at which the company's shares are initially offered to the public in the IPO. This price is set by the company and its underwriters based on market demand and other factors.

Shares

Shares refer to the units of ownership in the company that are being offered to the public in the IPO. These shares can be bought and sold on the stock exchange after the IPO.

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Splits

Splits (Stock Splits):

A stock split occurs when a company increases the number of its outstanding shares of stock to boost the stock's liquidity.

In a stock split, the number of shares outstanding increases by a specific multiple, but the total dollar value of all shares remains the same.

Companies often choose to split their stock to lower its trading price to a more comfortable range for most investors and increase the liquidity of trading in its shares.

For example, if a company decides to split its stock 2-for-1, the number of shares outstanding would double, while the share price would be halved.

Code

The code is a unique identifier assigned to a company's stock by the stock exchange where it is listed. It is used to identify the stock in trading and other financial transactions.

Split date

The split date refers to the date on which the stock split takes effect. It is the date when the new shares resulting from the split are distributed to existing shareholders. Optionable

Optionable refers to whether the stock is eligible to be used as an underlying asset for options contracts. If a stock is optionable, it means that options can be traded on that stock.

Old shares

Old shares refer to the existing shares of a company before a stock split takes place. These are the shares that will be exchanged for the new shares resulting from the split.

New shares

New shares are the additional shares that are issued to existing shareholders as a result of a stock split. The number of new shares is determined by the split ratio, such as 2-for-1 or 3-for-2, where shareholders receive a certain number of new shares for each old share they own.

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Positive Perspectives from LVMH's Latest Quarterly Earnings

Date: 17.4.2024

Today, after reviewing LVMH's first quarter earnings report, I was reassured about its investment strategy, particularly in the luxury goods sector. Despite the global, economic slowdown that has clearly affected the luxury goods market, LVMH - home to prestigious brands such as Louis Vuitton and Dior - has demonstrated its resilience and ability to adapt to changing market dynamics. This is key for me as an investor seeking stability in these turbulent times.

Analysing sales performance amid challenges

 

LVMH reported moderate organic growth of 3% in the quarter compared to the same quarter in 2023, with sales of €20.69 billion. Although this represents a slowdown compared to the explosive growth recorded in previous years, the 2% decline, largely attributable to currency effects, does not diminish the underlying strength of LVMH's business model.

 

The slight decline in Asia, where sales fell by 6%, initially seemed worrying. However, knowing that this decline is partially offset by growth in Europe and the United States, where sales grew 2%, adds a layer of geographic diversification to LVMH's revenue streams which is key to managing risk in my portfolio.

 

Strategic management insights

 

Jean-Jacques Guiony's comments during the analyst call further boosted my confidence. The CFO's satisfaction with Chinese demand, particularly the 10% increase in purchases of Louis Vuitton products by Chinese buyers globally, is a strong indicator that the brand retains its appeal among consumers in the target group. This is key, as Chinese consumers have historically been the main driver of growth in the luxury sector.

 

Long-term growth prospects

 

The luxury market's adjustment to a slower growth environment is not necessarily a negative, but a return to normality following the post-pandemic surge in sales. LVMH's ability to maintain steady sales growth in such an environment, together with strategic price adjustments to match inflationary pressures, is a testament to its strong market position and operational excellence. This is consistent with my investment philosophy, favouring companies that can manage short-term challenges while having the strategic foresight to take advantage of long-term opportunities.

 

A diversified portfolio as a reserve

 

LVMH's diversified portfolio, which encompasses various segments including spirits, jewellery, cosmetics, and fashion, further reduces the risk and increases the attractiveness of holding its shares in my investment portfolio. Continued strength in the US market and a gradual improvement from aspirational customers suggest a recovery in the consumer base that could lead to higher results as market conditions gradually improve.

 

Conclusion

 

Overall, LVMH's first quarter results have had a positive impact on my view of investment within the luxury goods sector. The company's solid fundamentals and savvy management provide a solid foundation for growth, especially as global economic conditions stabilize. The resilience demonstrated by LVMH reassures me of the strength of my current holdings and encourages me to maintain, if not increase, my investments as the market adjusts to the new normal. In a volatile investment environment, such confirmations of strategy are invaluable.

Date: 1.5.2024
Guidance on Alphabet's strong Q1 results

Alphabet Inc.'s latest quarterly results have given me a lot to think about. The strong growth in Google Search, YouTube, and Cloud, highlighted by CEO Sundar Pichai, demonstrates the significant impact of artificial intelligence on the company's momentum. The reported 14% year-over-year revenue growth in Google services and a staggering 28% revenue growth in the Google Cloud segment underscore a thriving operating strategy.*

Date: 24.4.2024
Riding the AI Wave: My Investment Journey with Nvidia and AMD

As an investor continually scanning the horizon for promising trends, the recent explosion in demand for AI chips caught my attention. Observing the soaring performances of Nvidia and AMD, companies at the forefront of AI technology, I was intrigued. This wasn't just about a temporary spike, it reflected the transformative power AI is beginning to wield across various sectors. My decision to increase my stakes in these companies was driven by a belief in the sustainable growth of AI technology and its increasing integration into everyday business and consumer products.

Date: 10.4.2024
Microsoft and NetEase Ink Game-Changing Deal

As an investor deeply entrenched in the tech and gaming sectors, the recent news of Microsoft Corporation's (NASDAQ: MSFT) Blizzard Entertainment renewing its partnership with China's NetEase Inc (NASDAQ: NTES) has sparked a notable upturn in my investment outlook.

Date: 3.4.2024
TSMC and the aftermath of the earthquake in Taiwan

The current seismic events in Taiwan have cast a shadow over my portfolio, especially with regard to my stake in Taiwan Semiconductor Manufacturing Corp (TSM). A devastating magnitude 7.5 earthquake, the strongest since 1999, struck the island country early Wednesday morning, leading to widespread power outages, property damage and disruption of subway services in major cities including Taipei.

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