Podcast Summary
Investing in specialized machinery companies: Millennial investors Andrea and Jamie focus on investing in companies like ASML, which designs and builds essential machinery for chip production, due to the growing demand for smaller, more efficient chips and limited competition in the market.
Andrea and Jamie, two millennial investors and chartered accountants, consistently invest a portion of their salaries into the stock market each month, focusing on companies like ASML, which designs and builds equipment used in semiconductor chip production. They believe in the growing demand for smaller, more efficient chips and the limited competition in the market for the specialized machinery needed to produce them. ASML's high-end machines, which can cost hundreds of millions of dollars, are essential for companies to manufacture the best chips. The investors have held ASML stock for several months and plan to continue adding to their investment despite its recent growth. This consistent investment strategy, along with their educational and disclaiming tone, aims to help listeners become more confident in the world of investing and finance.
Market Fears vs Long-Term Investing: Market fears and psychological barriers can impact investment decisions, but long-term potential and financial results should be the primary factors in making investment decisions. Geopolitical tensions may cause temporary price drops, but the underlying business fundamentals remain important.
The current share price of a company should not be the only factor in determining an investment decision, but the psychological barrier of buying at higher prices can make it harder to add to positions. The speaker shares his experience with investing in ASML, a brilliant business with a long-term winning potential, and his plan to gradually increase his holding during a supposedly slow-growth year. However, the market's fear of potential US restrictions on ASML's chip exports to China led to a significant drop in the share price, despite the company's strong financial results. The speaker believes that the impact of such restrictions would be minimal and that ASML's integral technology equipment will always be in demand globally. He took advantage of the recent drop in share price to add to his existing investment. In short, even in the face of geopolitical tensions and market fears, the speaker remains confident in the long-term investment thesis of ASML. Additionally, the speaker also added to his investment in the Invesco EQQ NASDAQ 100 ETF to gain exposure to the technology sector.
NASDAQ 100 ETF, Diversification: Investing in NASDAQ 100 ETF reduces risk by providing exposure to a diversified portfolio of tech companies, including non-tech firms, and allows for continued growth potential in the tech sector.
Investing in the NASDAQ 100 ETF can provide exposure to a diversified portfolio of technology companies while reducing the risk associated with investing in individual stocks. This was the decision made after selling a portion of CrowdStrike shares following an incident that caused concern. The NASDAQ 100 includes companies like Costco, PepsiCo, and Starbucks, in addition to tech firms. By investing in an ETF, an investor can spread their risk and still benefit from the growth potential of the technology sector. The speaker also mentioned adding to their investment in Zscaler, a cloud-native cybersecurity provider, despite the incident with CrowdStrike. Zscaler's Zero Trust Exchange platform helps ensure the right users access the right applications while keeping bad actors out of an organization's network.
Zero Trust Security: Traditional network cybersecurity is becoming obsolete, and Zero Trust Exchange solutions like Zscaler ensure secure access to applications and data outside of corporate networks
Traditional on-premise network cybersecurity is becoming obsolete as more applications, users, devices, and data move outside of corporate networks. Zscaler Zero Trust Exchange is a solution that ensures the right users can access the right applications at the right time, using a "trust no one, verify everyone" approach. Zscaler is a leader in this field, but there are competitors like Netscope and Palo Alto Networks also doing well. Zscaler's founder CEO, Jay Choudry, owns over a third of the business, giving him a strong incentive to see the share price rise. I recently added more to my investment in Zscaler. Another investment I made was £600 into a "global pie" - a mini ETF that I created to be more diversified in my global investments. Unlike the all world ETF, this pie includes smaller companies. I have slightly different weightings than you due to the version of the Invesco Fund I use. Overall, these investments reflect the trend towards cloud infrastructure and the importance of cybersecurity and diversification in a global economy.
ETF dividends: Choosing between an ETF's distributing and accumulating versions depends on personal preference and potential fees. Sellers consider valuation and risk management when deciding to sell or trim investments.
Investing in an ETF's distributing version, like the Invesco Footsie All World ETF (FTWG), allows for dividends to be paid out in cash, while the accumulating version (FWRG) automatically reinvest dividends. The choice between the two depends on personal preference and potential fees. The speakers, in their investment strategy, invested £600 into their global pie and sold over £1,100 worth of Crown Strike and Tesla shares, with the latter being sold due to its expensive valuation and market conditions. The speakers believe in Tesla's long-term potential but prefer smaller holdings due to short-term risks. They also mentioned that interest rates could be a temporary challenge for Tesla but may eventually benefit the company. Overall, their approach involves careful consideration of valuation and risk management when deciding to sell or trim investments.
Tesla investment decision: The hosts reduced their Tesla investment due to personal reasons and financial considerations, emphasizing the importance of making informed decisions and acknowledging investment risks.
The hosts of this podcast, after considering Tesla's upcoming financial results and the recent spike in its share price, decided to reduce their investment in Tesla and allocate more funds to other investments. They emphasize that this decision is based on their personal reasons and circumstances, and should not be considered as financial advice. They encourage listeners to make their own informed decisions and remind them that investing always carries risk. Additionally, they ask for support by rating their podcast highly on streaming platforms and mention their sponsor, Trading 212, with a referral link for a free fractional share offer.