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Blackrock CEO Larry Fink thinks India's love for gold has done little for its economy. Maybe he's wrong
BlackRock CEO Larry Fink recently stated that India's cultural affinity for gold has hindered economic progress, claiming it has "done little for its economy and investors." However, this categorical dismissal fails to account for the multifaceted role gold plays in India's economic and cultural fabric.

For centuries, gold has been deeply woven into Indian traditions, viewed as a symbol of wealth, prosperity, and auspicious beginnings. This intrinsic connection has fostered a massive domestic demand for gold, making India one of the world's largest consumers of the precious metal. Far from being an economic deadweight, this enthusiasm for gold has yielded tangible benefits.

First, India's gold industry is a significant employment generator, with millions deriving their livelihoods from mining, refining, manufacturing, and retailing gold products. This labor-intensive sector contributes substantially to the nation's GDP and acts as an economic stabilizer during turbulent times when other industries falter. Moreover, the robust domestic demand for gold has nurtured a thriving ecosystem of jewelers, artisans, and craftspeople, preserving India's rich cultural heritage and traditional skills. This vibrant industry not only caters to local appetites but also fuels exports, earning precious foreign exchange reserves for the nation.

From an investment standpoint, gold has long been regarded as a reliable store of value and a hedge against inflation and economic uncertainties. For countless Indian households, especially in rural areas with limited access to formal financial instruments, gold represents a crucial savings vehicle and a form of private wealth transfer across generations.

Notably, India's gold reserves have played a strategic role in shoring up the nation's economic resilience during times of crisis. In the early 1990s, when India faced a severe balance of payments crisis, the government's gold holdings were pivotal in securing emergency loans from international agencies, averting an economic collapse. Furthermore, the demand for gold has spurred innovation and technological advancements in the Indian jewelry industry. Manufacturers have embraced modern techniques, such as computer-aided design and 3D printing, to cater to evolving consumer tastes and tap into global markets.

While Fink's concern about the opportunity cost of gold consumption is valid, it overlooks the broader economic and cultural context. India's love for gold is not merely a frivolous indulgence but a deep-rooted tradition that has fostered employment, preserved heritage, facilitated savings, and bolstered economic security. Rather than dismissing this cultural affinity, a more balanced approach would be to harness its potential through responsible policies and financial literacy initiatives. By encouraging investment in more productive assets while respecting traditional values, India can strike a harmonious balance between its golden legacy and its aspirations for economic growth.

CNBC
India's love for gold has done little for its economy and investors, BlackRock's Larry Fink says
Fink emphasized the importance of capital markets and how they can improve a country's economic standing as opposed to gold.

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Coca Cola is an underrated acquirer
For a mature business that grows at the rate of inflation (or maybe less) and is one of the core holdings of Berkshire Hatahway, those that own $KO should do so for a secure source of dividend income. The growth prospects for Coca Cola are minimal as it is a pure beverage company and is far bigger than $CELH $MNST and other exciting beverage companies.

Looking at the history of Coca Cola's acquisitions, one can conclude that any company Coca Cola acquires usually become a major sales success.
The Motley Fool
What Companies Does Coca-Cola Own? | The Motley Fool
You might be surprised by some of the brands that Coca-Cola owns.

Small-Caps Will Make All-Time Highs Sooner Than Investors Realize
Money rarely leaves markets.
It rotates.
We are in the midst of a massive rotation favoring recent laggards.
Small-caps will make all-time highs sooner than investors realize.

As a data researcher, nothing gets me more excited than when a narrative shifts. Often, behavioral changes begin subtly…then the forward picture illuminates.

Last week, I highlighted how Energy stocks are ready to lead. The hidden message in that writeup was how a renaissance was underway in our data.

Leadership is changing…fast.

Turns out, this momentous reshuffling of the market deck is favoring smaller firms.

The recent all-time highs quoted by pundits has been large-cap focused. BUT I’m making the data-driven case that small-caps are next in line for success.

Not only is our data favoring the laggards, two historical studies prove why betting small could be the next big ticket.


Technology stocks have gotten all the glory. The A.I. resurgence has captivated the crowd. Fortunately for MAPsignals, back in early November we made the case for the sector to explode in 2024.

We saw a layup in the data…and it didn’t disappoint with Technology stocks gaining +22.88% since that post.

Today’s environment, however, signals more broadening participation in the market. Essentially, growth isn’t the only game in town.

Below shows this wonderfully. In the month of March, every major sector except Consumer Discretionary and Real Estate have outperformed Tech:

That’s a tidal wave price shift, favoring many smaller cap areas. Clearly, professional investors see value lurking in recent lagging areas.

Diving below the surface illustrates this beautifully.

When we tally all inflows this week, 86% of buys are focused in companies with market-caps below $50 billion in market cap:

Even more striking is how companies with market sizes of $50B+ barely had any buying to write home about.

Anyone overweight mega-cap tech has felt this in their portfolios with crowded high-flyers failing to notch new highs recently.

So, where is the newfound capital flowing specifically? I’m glad you asked!

As showcased last week, our sector rankings completely reshuffled with Energy taking pole position.

Industrials and Financials jumped to 2nd and 3rd place respectively, as many of the stocks in those areas attract Big Money:

Folks, there’s a lot of opportunity right now in many areas NOT on the lips of the media.

Battered small-caps are ready to surge and 2 historical studies only reinforce this non-consensus narrative.

First, let’s get into some technical data. The 1st quarter is nearly complete with the S&P 500 zooming 10%.

This is in stark contrast to small-caps barely eking out a positive return. The S&P Small Cap 600 is only up 1.4% this quarter.

If this underperformance has you feeling gloomy…consider this fact. Since 1995, whenever the S&P Small Cap 600 has had lackluster performance in Q1, to the tune of 2% or less, it kicks off a monster market-beating rally.

The following months of April – December surge on average 17.38%. A slow start to the year is quite bullish into yearend.

Marty McMAP is zooming in on the opportunity ahead:

Up to this point, we’ve got a really nice story building for small-caps. Sectors are reshuffling, money flows favor the area, and a weak start to the year is a very bullish technical omen.

BUT there’s one other major macro signal to consider. One that gives me the courage to suggest that small-caps will make all-time highs sooner than investors realize.

It’s due to the fact that interest rates are set to decline. The Fed effectively greenlighted rate cuts coming later this year.

Whenever rate cuts occur and the economy is humming along, small-caps rip!

Since mid-1995, whenever the Fed first cuts rates and the economy isn’t in recession AND doesn’t fall into recession a year later, the S&P Small Cap 600:

  • Gains 10.6% 3 months later
  • Soars 19.3% 12-months later with a 100% batting average

Ladies and gentlemen, the small-cap train is leaving the station.
Unbutton the bear suits.

A rally of 19% would easily put the lagging group into all-time high territory…stunning the crowd.

Anytime the technical and macro favors this amount of upside, you can bet single stocks will double and triple in this backdrop.

This is where having a market map is critical…
Let’s wrap up.

Here’s the bottom line: A small-cap rebirth is here. Sector leadership and money flows signal a reshuffling of the stock market deck.

Additionally, lackluster Q1 performance isn’t something to fear…it’s something to cheer.

Throw in the fact that the Fed will be cutting interest rates in 2024, and you’re staring at one heck of a bullish cocktail.

Our Top 20 leaderboard is reshaping weekly with all-star stocks in Energy, Industrial, and Financial sectors.

If your portfolio could use a recharge, don’t wait for the media bull whistle to blow…by then it’ll be too late.

Instead, use a map.

Tomorrow’s small-cap leaders are here today.

Go big by going SMALL.

If you’re a professional money manager, Registered Investment Advisor (RIA), or someone that take investing seriously, get a MAP PRO subscription and see the actual stocks under heavy accumulation day after day.
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MAPsignals
Solutions - MAPsignals
MAPsignals’ volume and price analysis tools enable investors to identify unusually large trading activities around individual stocks and ETFs. This allows traders and investors to move beyond sentiment with a more precise, predictive, and measured data analysis tool that MAPs the signals being delivered by the market’s biggest players.MAPsignals capabilities include: Read more »

China's electric vehicle industry is lifting the Chinese economy out of recession
Whether it's emerging markets or developed nations, China has been exporting electric vehicles globally and have seen an explosion in demand for the past few years. While the sales success of Chinese EVs in Europe and developed nations in Asia is no surprise, in emerging markets, Chinese EV companies have seen instant success within their first year of selling vehicles there. While established automakers like $TSLA look to halt the expansion of factory construction in other nations, BYD is looking to build factories in Thailand, Brazil, Indonesia, Hungary, Uzbekistan and even Mexico. In markets where Toyota use to dominate, BYD is now outselling Toyota. This is because BYD is able to produce cars for much cheaper than competitors. As the middle class in emerging markets continues to grow, we can rest assured that those newly minted middle class households will choose a Chinese EV over a Japanese or even an American EV.

Since the US already imposes a 27.5% tariff on Chinese-made vehicles, Chinese automakers are avoiding the US markets. With the USMCA trade deal and the nearshoring trend, Chinese companies have been eager to offshore their factories in Mexico and take advantage of the terms of the trade deal and avoid tariffs from there. With the Chinese government offering large scale subsidies to their auto industry, Chinese automakers are able to price themselves affordably to households in Latin America. Chinese consumer companies that are already exploiting this loophole are benefiting from the trend where the US imports more goods from Mexico than from China.

While the US, Europe, and Japan find the rise in Chinese EVs to be concerning, for all other nations that don't have an auto industry, they are fond of China's rise in the automotive industry. Their people get better vehicles at affordable prices and those automakers create jobs by offering to build factories in their country. Non-westerners are not concerned with the growing influence that China will have in their country as a result of flooding their market with cheap electric vehicles as their countries are not in a military competition with China. Also, people in general would care more about advancing their financial well-being and upgrade their standard of living.

In terms of economy, China's real estate troubles and manufacturing exodus are providing a shadow over the economy's bright spots, with electric vehicles being one of the biggest bright spots. As international manufacturers leave China, Chinese automakers are filling those empty factories. As international companies demand fewer cargo services from Chinese cargo providers, Chinese automakers are requesting for more cargo ships to transport their vehicles into Europe and Latin America. Many higher paying jobs are created as a result of China's growing automotive industry. As households in China shift from hoarding their wealth in real estate to either investing it in the stock market or splurging it on consumption, we can see households owning more vehicles and thus creating more demand for electric vehicles at home. BYD making luxury SUVs and super cars is a sign that households in China are looking to splurge big on consumer discretionary items. Why else would BYD makes those vehicles when those vehicles wouldn't sell well in Europe nor the emerging markets?

When taking a macro historical view of China, you'll find that China has and continues to upgrade in the economic value chain. It rose from basic manufacturing to producing electronics to now producing cars and later, airplanes. As economists worry about China entering the middle income trap, seeing the country rise in the economic value chain debunks those worries. Japan, which had issues with population growth, became a developed nation simply by growing in the economic value chain. China going from being a recipient of manufacturing to then offshore manufacturing to Latin America and Africa is all part of the process with growing its influence in the developing world as well as creating room for higher value activities within its borders. This is the same roadmap that other developed nations have seen. The high influence of China in the developing world will help China's electric vehicle industry grow as the industry will simply ride the growing wave of new middle class households in those nations. As for the subsidies, I'm unsure when the CCP will stop subsidizing the industry but I believe it will stop subsidizing it sooner rather than later as the electric vehicle industry is already profitable.

Electric vehicles look to create a new wave of economic growth for China.
post mediapost media

Company Deep Dive on JP Morgan
This is Part 1 of a company deep dive on J.P. Morgan $JPM.

Over the past five years, JPM share price generally moves in line with the S&P 500. However, during periods of a market uptrend, JPM tends to outperform the index.

On the other hand, during periods of a market downtrend, JPM tends to underperform the S&P 500.

open.substack.com
J.P. Morgan Chase & Co (Part 1) - Higher ROE than its peers
Company deep dive with stock details, ownership information, business analysis, key drivers and key risks on JPM

Amazon is smart to double down on Anthropic
The two leaders in AI development are OpenAI and Anthropic. OpenAI embodies the Silicon Valley mindset of "move fast, break things, and keep going until you get to your destination". Anthropic embodies a different mindset that can be summed up as "slow and steady wins the race". While OpenAI was first to create an AI chatbot, an AI image creation service, and an AI app store, Anthropic was slow to release their Claude AI chatbot to the public and hasn't dabbled into AI image creation or other AI applications.

The recent unveiling of Claude 3 is proof that slow and steady wins the race. As you can see, all three Claude 3 AI models have capabilities that surpass both OpenAI's GPT-4 and Google's Gemini 1.0 Ultra AI models. Even if Anthropic's emphasis on AI safety slows its development, they've been able to create better AI models than anyone else. Outsiders observing this will say that Anthropic has nailed the sweet spot strategy when it comes to AI development.

Source: Anthropic

$AMZN first invested $1.25 billion in Anthropic in September 2023 as $MSFT, $GOOGL, and OpenAI have already unveiled their chatbots and have seen immense success from launching them. While Amazon wasn't interested in creating a chatbot, it was interested in being the primary cloud services and semiconductors provider to the AI research firm. After the release of Claude 3, Amazon then invested $2.75 billion more in Anthropic. Before Anthropic, Amazon's biggest venture bet was its $1.3 billion investment in $RIVN. Clearly Amazon is more optimistic on Anthropic than on Rivian and for good reason. Unlike the investment in Rivian, Amazon's investment in Anthropic will allow Amazon to build anything they want by leveraging Anthropic's technology.

As for Anthropic, since they already have the sweet spot strategy in AI development, their partnership with Amazon ensures it will have enough computing resources to compete with OpenAI and $GOOGL Gemini. Without Amazon, Anthropic will either have to acquire those computing resources from $MSFT, who has already dedicated a significant portion of their computing resources to OpenAI, or to Google, who already dedicated a significant portion of their computing resources to DeepMind. Amazon was the best choice as they don't have partnerships with any other AI research firms.

Importantly, if the battle is only about computing resources, then Google would beat both OpenAI and Anthropic. However, the battle is bigger as there are other factors to think about, like research efficiency, focus, and execution. And both OpenAI and Anthropic thrive in those areas.

Overall, Amazon is smart to double down on Anthropic. It will be exciting to see what innovations Amazon creates with Anthropic's technology and I am optimistic that Anthropic will be key to Amazon's new era of growth. Imagine the new wave of products and services Amazon will create because it was able to leverage Anthropic's technology. All the ads that they can put on Alexa to monetize the Alexa devices. All the other AI companies that it can attract to AWS. And all the new AWS features it can create and offer to current customers. Amazon is smart to double down on Anthropic.
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www.semianalysis.com
Amazon Anthropic: Poison Pill or Empire Strikes Back
Claude 3, Claude 4, Trainium2, Marvell, Alchip, Bedrock, Google Infrastructure

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