We draft 6 stocks from SOHN Investment Conference New York

Bryce: [00:00:19] Welcome to another episode of Equity Mates, a podcast that follows our journey of investing. And we are here in the States on the Equity Markets US tour with my co-host Ren. How are you? 

Alec: [00:00:30] I'm very good, Bryce. Well, you can actually hear it in my voice. I'm a bit stuffed up. [00:00:34][4.6]

Bryce: [00:00:35] Big night last night.

Alec: [00:00:36] Big week and a half. 

Bryce: [00:00:38] It has been a big week. You're on a mattress that deflates every night. 

Alec: [00:00:42] Oh, it is unbelievable. Bryce is sleeping on a king bed. I am in the other room on an air mattress that has a hole in it, so it's only a tiny hole. So I fill it up. Then probably about once a night, I'll wake up or a deflated air about trust that I have to reinflate it and then Alf is on a couch.

Bryce: [00:01:07] Yes. Now, whilst it is a business trip we obviously aren't doing, they. Everyone stays in a hotel room vibe. We are. 

Alec: [00:01:15] Well, I mean, business is good, but it's not three hotel rooms in New York. 

Bryce: [00:01:21] Fiscally responsible. For context, we're staying at a mate's place in Brooklyn, which is awesome. But the sleeping arrangements were such that it required a closest to the pin guessing competition. To who would get for who would get the king sized bed, who would get the couch, and who would get the air mattress. You came second, but we weren't aware that the air mattress had a hole in it. 

Alec: [00:01:48] Brookie didn't do much due diligence, but that's a good investing lesson right there. Now, Bryce and I might end up sharing a bed. 

Bryce: [00:01:58] Well, now I've been absolutely usurped, and I think tonight I'm going to be on cushions on the floor.

Alec: [00:02:05] True. Yeah. We've got a few extra guests tonight. Anyway, that's about our sleeping arrangement. This podcast is about where we sleep at night. It's actually about us learning to invest so our money can go to work while we sleep at night. 

Bryce: [00:02:19] That's right. Now, while we are licensed, we are not aware of your financial circumstances. So any information on this show is for entertainment and education purposes only. Any advice is general. 

Alec: [00:02:31] And if you are just getting started investing, We do have a sister podcast. Get started investing. That really goes through the basics. So putting your content wherever you are in your investing journey, but Bryce, wherever we are on our investing journey is New York.

Bryce: [00:02:48] We are in New York. So in today's episode we're going to pick it up from where we left off at the end of Omaha, have a bit of a chat about what's happening here in New York, and then go through some of the stock picks that have just been put through from the SOHN conference here in New York. We're going to draft and make a bit of a portfolio for those six companies. But before we kick into that, a massive thank you to Milford for sponsoring the US tour. They are a leading New Zealand fund manager and they are now available for Australian investors and advisors. 

Alec: [00:03:23] Milford's Flexible active management strategies and high performing globally. Experienced investment team aim to deliver strong long term returns while managing downside risk. 

Bryce: [00:03:31] Milford's team also invest in the same funds as their clients. So you know that they're highly motivated because they're on the journey with you. 

Alec: [00:03:37] Find the Milford funds on your trading platform or at milfordasset.com.au, before you invest, be sure to read the Fund's product disclosure statement and target market determination found at milfordasset.com.au. Thank you to Milford for getting us to New York. Yes. Now Bryce, you mentioned the SOHN conference for people that aren't familiar with it, it's a charitable endeavour. They raise money for medical research and the way that they do it is a whole bunch of fund managers get together and pitch their best ideas. And, I think, about $4,000 a ticket. Yeah, it started in New York. There's now a conference. There's a number of conferences around the world, including one in Australia. But we were in New York for the SOHN conference. Little did we know it was actually online. 

Bryce: [00:04:29] Yeah. Yeah, well, we did actually look at it before we came with the hope of actually going, but yeah, a lot of it was, well, it was all online so which was a shame because they had some amazing they always get really high quality speakers. And that continued this year. They have a few sort of keynote presentations and then essentially these expert investors get up and pitch a high conviction idea.

Alec: [00:04:55] Yeah. So we, they don't publish the stock picks. No, but we have found seven of the stocks that were pitched. Well six stocks and one bond. Yeah. So we're going to talk about that the keynotes, as you said, some pretty big names. Patrick Collison the co-founder of Stripe the payment processor interviewed Sam Altman, the co-founder of Openai. For me, that was a super interesting conversation. And then Stanley Druckenmiller was interviewed, one of the a legendary investor, and then the chief investment officer of Bridgewater Associates was also interviewed by Patrick O'Shaughnessy. So some big names there. And what we've done is pulled out some of our favourite bits from the three keynotes. 

Bryce: [00:05:48] Yeah. So we start with Patrick Collison in conversation with Sam Altman. Incredibly AI focussed, as you would expect, but he's a few highlights from their conversation.

Patrick: [00:05:58] And thank you, Sam, for being with us. Last year I actually interviewed Sam Bankman-fried, which was, which was clearly the wrong Sam to be interviewing, so it sounds good to correct it. Yeah, this year. All right, Sam. All right. So I presume almost everyone, the audience is a chat geek user. What is your most common tangible use case like? Not when you're testing something, just you actually want to get a word. ChatGPT is purely an instrumental tool for use summarisation by far. 

Sam: [00:06:29] I don't know how I would still keep I wouldn't still keep up with email and slack without it, but you know, posting a bunch of email or Slack messages into it hopefully will like build some better plug-ins for this over time. But even doing it anyway, it works pretty well.

Patrick: [00:06:43] Have any plug-ins become part of your workflow yet? 

Sam: [00:06:46] Browsing in the code interpreter once in a while, but honestly they have not. For me personally, they have not yet. Kind of like tipped into a daily habit.

Patrick: [00:06:55] You know, think whatever you want about crypto and the ups and downs, but the fact that the US is the worst country in the world to have a crypto company in or you just can't offer it at all is sort of a big statement. A historically big statement. 

Sam: [00:07:11] Yes. Yes it is. Yeah. It's hard to think of the last technology for which that was the case. Maybe the Europeans are supposed to do. That's not us. Yes, it's supersonic air travel or something like that. Then, yeah.

Patrick: [00:07:25] Should nuclear secrets be classified? 

Sam: [00:07:29] Probably, yes. I don't know how effective we've been there. I think the reason that we have avoided nuclear disaster is not solely attributable to the fact that we classified the secrets, but that we did something. We did a number of smart things, and we got lucky. You know, the amount of energy needed, at least for a long time, was like huge and sort of required the power of nations. So first of all, I think it is always a mistake to draw too much inspiration from a previous technology. Everybody wants the analogy. Everybody wants to say, Oh, it's like this or It's like that, or We did it like this. We're going to do it like that again. And the shape of every technology is just different. However, I think nuclear materials and A.I. supercomputers do have some similarities, and this is a place where we can draw more than usual parallels and inspiration. But I would caution people to to over learn the lessons of the last thing. I think something like an IAEA for A.I. like and I and I realise how naive the sounds and how difficult it is to do. But getting a global regulatory agency that everybody everybody signs up for four extremely powerful A.I. training systems seems to me like a very important thing to do. So I think that's like one lesson we could learn. But what the world needs is not more A.I. safety. People who like post on Twitter and write long philosophical diatribes. It needs more people who are like going to do the technical work to make these systems safe and reliably aligned. And I think that's happening. It'll be a combination of people that have good EML researchers shifting their focus and new people coming into the field.

Patrick: [00:09:10] How much important Amal research comes out of that? 

Sam: [00:09:14] I would love to know the answer to that question. Like how much it does it come out of China that we get to see? Not very much. 

Patrick: [00:09:20] So, yes, yes. I mean, from the published literature. 

Sam: [00:09:22] Non-zero, but not a giant amount. 

Patrick: [00:09:25] Do you have any sense as to why? Because, you know, the like the card, not like the number of published papers is very large. And there are a lot of Chinese researchers in the US who do fantastic work. And so why is the kind of per paper impact from the Chinese stuff relatively low? 

Sam: [00:09:44] I mean, what a lot of people suspect is they're just not publishing the stuff that is most important. 

Patrick: [00:09:48] Do you think that's likely to be true? 

Sam: [00:09:51] I have. I don't trust my intuition, sir. ChatGPT is the only product I use daily. 

Patrick: [00:09:57] Is there a is there any AI products that you wish existed and are using the capability that our current capabilities make possible or wrote very soon made possible that you're looking forward to? 

Sam: [00:10:06] I would like a co-pilot like product that controls my entire computer so that I can like look at my slack and my email and zoom and messages and my like massive. To do list documents and to just like kind of do most of my work is some kind of three plus plus sort of thing. Yeah. Yeah. 

Patrick: [00:10:24] And you mentioned curing cancer. Is there an obvious application of these techniques and technologies to science that again, you think we have or was having capabilities for that you see people obviously pursuing today? 

Sam: [00:10:41] There's a boring one and an exciting one. The boring answer is that if you can just make really good tools like that one I just mentioned and accelerate individual scientists each by a factor of three or five or ten or whatever. That probably increases the rate of scientific discovery by a lot, even though it's like not directly doing science itself. The more exciting one is I do think that a similar system could go off and start to read all of the literature, think of new ideas, do some limited tests in simulation, email a scientist and say, Hey, can you run this for me in the lab? 

Alec: [00:11:19] All right, Bryce. Well, that's two of the best tech minds in the world in conversation. Super interesting. The good news is all three of these keynotes are available in full on this show, and YouTube will include the three links in the show notes. It's just the actual stock pitches that you don't get access to unless you pay the thousands of dollars or you find the right Twitter account. But that was the first. Let's get to the second one, which was a conversation with Stanley Druckenmille. 

Bryce: [00:11:50] So this picks up midway through an answer from Stanley. Essentially, he kind of summarises the environment that we're in. But the more interesting part is where to from here? So this is him picking up from where at a point of increase in interest rates.

Kiril: [00:12:10] Last year, you probably thought the US recession arrived in the last 23 or early 24. But you recently told me that you brought your recession forecast forward. You're hearing lots of anecdotal information that she knows. You talked to problems in trucking, problems in retail, obviously credit construction vaccinations. And you believe that the consensus of a soft landing is very unlikely. Then you rate the probabilities of hard landing as wide. After all, how could we not have a hard landing? 11 years of the greatest monetary stimulus in US history. A 500 basis point increase in stored rates over the past due to developing real estate prices. Commercial real estate. 

Stanley: [00:13:06] Regional banks have 33% of their loans in that sector and the bursting of the region realising they had probably made the biggest mistake in the history of the Fed. They slammed on the brakes. They've raised rates 500 basis points in the last year. We know historically two things which you've already articulated. Number one, the worst economic outcomes tend to follow. Two easily engineered asset bubbles. And number two, Big Macs on my business don't fight the Fed. So I'm sitting here staring in the face at the biggest asset and probably the broadest asset bubble. Forget that I've ever seen that I've ever studied. Right now we have a big hike in interest rates. 

Bryce: [00:14:00] So this is the second conversation between Kiril Solokoff and Stanley Druckenmiller, where I actually hopefully get Kiril on the show at some point. Oh, really? Yeah. 

Alec: [00:14:11] Also, Stanley Druckenmiller. Hopefully we'll see. 

Bryce: [00:14:13] Stanley at some point. Now, this conversation is really around Stanley's thoughts on where the global economy is heading, particularly the U.S. And to summarise 50 minutes of conversation, we are fact is his is really the point that he's making. 

Stanley: [00:14:33] It's hard to look at that constellation of factors. Know that we've only had a few soft landing since 1950. All of them were preceded by what I would call proactive rather than reactive Fed policy and believe we're going to have a soft landing. One never knows. But if you're just looking at the odds, they're very tough. In terms of the timing. I have left much less certainty on that than I do on whether we're going to have a hard landing or a soft landing. The timing is difficult, but I will say while we're not in our shop, we tend to use anecdotal information a lot. It's somewhat mixed. Housing, which has tended to lead historically, is actually fairly, fairly robust. And travel restaurants, stuff like that is fairly robust. But other stuff. Trucking, which has been a guiding light for my firms in terms of economic forecasting with a 6 to 8 month lead time actually since I got in that business, is extremely weak. We're hearing bad, bad anecdotes from retail. And then of course, you have the you've already mentioned the banking problem. We always knew. Given what I've already described, there are going to be bodies out there. When you have free money. People do stupid things. When you have free money for 11 years, people do really stupid things. So there's stuff under the hood. It's starting to emerge. Obviously, the regional banks reset. We have Bed, Bath and Beyond, but I would assume there's a lot more bodies coming. The median regional bank has 43% of their loans in commercial real estate, about 40% of that as office. As you know, we've had this huge change in lifestyle due to COVID. Number one, the great resignation, that number two, people are going to the office. So we have actually a higher vacancy rate than we had in 2008. So I put all that together and I look also at the inverted yield curve. The timing has always said sort of third, probably the fourth quarter of this year, first quarter of 24. But the reason anecdotes, the banking problems, I wouldn't be surprised if the bean counters a year from now, as they tend to do backward looking that the things started sometime the second quarter. I don't know that, but I do this for a living, so I going to have a forecast. There's a possibility that they can't put Humpty Dumpty back together again. If there's one thing about the consensus that I'd say I'm on the other side of, and I want to be careful with my words here, it's this constant repeating that this looks like nothing like 2008 or 2007. First of all, I was saying it. I don't remember them predicting in 2007 what was ahead of them. I don't remember people saying the banking system was that weak going in. I. I am not predicting something worse than 2008, so I don't want to see headlines tomorrow that I said something worse in 2008 is coming. But I think it's naive to not be open minded to some sort of possibility that in fact the banks have got themselves on a balance sheet problem before the loan losses have started because obviously the mismatch of liabilities and assets would treasuries on their balance sheet. They're basically have stuff yielding two, two and a half percent that their cost of funds is 5% on. So before we even get into an economic contraction, many of the banks already have impaired balance sheets. If you pile on losses in commercial real estate, credit card loss is the stuff that normally happens in a recession. And you take the fact that we have had this big asset bubble going into it and you take the fact that we just had the most rapid increase in interest rates from the bottom in history. I think it's just naive, not be open minded to something really, really bad happening. 

Bryce: [00:19:17] Alright, Ren. The Final one, which was a conversation between Patrick O'Shaughnessy and the CEO of Bridgewater, Karen Karniol-Tambour. They covered a wide variety of topics. So here are some of the key highlights. 

Patrick: [00:19:30] I would say that the theme thus far today of the big conversations, the sort of fireside chats like this one has been this clash of what I'll call macro headwinds that Stanley Druckenmiller just laid out for us, and technology tailwinds, most specifically the revolution that's going on in the world of artificial intelligence that Patrick Collison and Sam Altman started the day with this morning. I would love to hear your take on something like AI. 

Karen: [00:19:59] China comes out of two decades with a slow train was kind of going through and making its way through our economy and it's happened all over the world. And I think when I look at what's happening with AI, the big obvious question is are we about to go through this again and way, way, way bigger? Because when you look at estimates and again, I'm certainly not an expert in technology, but you look at opening eyes estimates, look at Goldman's estimates of its methodologies, they all say the percentage of labour market that could be affected by AI in the same way globalisation, automation, touch manufacturing, it's a much bigger bite than theory. So you could be hitting a bigger swath in the people in manufacturing and that effect might be even faster and even bigger than what we just lived through. And we're still dealing with the aftershocks of all that. So it's not really something I think people can ignore. 

Patrick: [00:20:45] For investors out there that are thinking big picture, are there certain things that you watch most closely or might begin to watch most closely as this unfolds? 

Karen: [00:20:54] Well, the big thing is it has to be big enough to offset the massive inflationary forces that are going the other way. So everything else in the world is kind of going the other way, right. I think that if you look at what companies are doing right now, sure, some companies are already integrating. I would have to go how fast that's going to happen. But companies all over. I think the biggest wave of what I would call non-economic spending companies have ever had to do, which is that big wave I was talking about 1990. Every time a company spent a dollar, they pretty much knew it was going to reduce their cost base. They knew it was going to be deflationary. So they were spending money to take money out of the cost base to go make that worker more productive, to make their supply chain more efficient. Again, good things to China. Now. Companies are basically being told to go make your supply chains more resilient instead. And what does that mean? That basically means go spend money to become sometimes less productive. I have the most productive supply chain today, and I have to double do I have to go spend twice and are also being told you should go in decarbonised. That's a great idea. The world greatly needs that, but that's not spending. But tomorrow you're saving money on. It's in some sense you have to rebuild the whole energy infrastructure and that moment is inflationary or being told, let's go, you know, subsidise all sort of things in order to get more competitive and build things domestically. We didn't need to build domestically before. So that's a massive wave of pretty not economic spending that this kind of structural inflationary force and that's already some number of years in the making, right? I think that wave, if you will, is ahead of the wave in terms of companies need to do that. Spending it's already in the system is also going slowly. It's not like anybody's about to go completely out of China, but that is a structural inflationary force. And what we have to watch is sort of how will that structural potential deflationary force, it could massively upend the economy called technology. And I what is that going to go and what's going to be faster and better and stronger? And the biggest thing I worry is just it's just a more volatile environment, if you will. You just have a likelihood for more volatile inflation, more volatile shifts. I might be a lot faster. The globalisation automation did and that causes assets to hold to look very different. 

Patrick: [00:23:00] Yeah, exciting but dangerous seems to be the. The summary of applying some of these technologies to investing. Bridgewater's famous daily observations note that it sends to its investors and others often lays out big picture things in fairly simple terms. If you were writing one of those tomorrow about just the general state of capital markets, what would be the key themes of your view today? Looking forward.

Karen: [00:23:26] I think the simplest thing I would say is that the world is changing really rapidly and capital markets tend to be slow to adapt when things structurally change because people trade based on our experience, they trade based on what they're used to. They've kind of have lived experiences in the markets that are a certain way. And so whenever you see big structural changes, markets tend to lag that. Does take time for investors to kind of follow up on that. And the most obvious case of this is, look, inflation's been running well above what the Fed wants to be for a while. And markets are basically telling you, don't worry, the Fed is always right. And if it wants place to be 2%, it's going to be 2% and it's going to work out. And so almost no matter what happens to inflation, if you were to tell me waking up overnight five years ago and say inflation, we had it, what do you think markets would expect? I wouldn't have expected the markets would say, don't worry, it's going to go back. It's going to go away. It will always get what it wants. I think it's the nature of the Fed's been so successful and central banks have been so successful for so long in containing inflation that it kind of underpins people's expectations. And so you've kind of set up in this world where a lot of what was true about the last 40 years deflationary, and because of that it was very easy to always make money in risky stuff. The reason was easy to make money, risky stuff is that every time anything went wrong, central banks could solve it because there was no tension and what they were experiencing was pretty much if things are bad, these things are bad is why? Because of inflation. Nothing wrong with easing. You can just always use as much as you want. There's no tension. Just go make growth as well as you can. You'll never get inflation.

Alec: [00:25:08] So, Bryce, as we come out of that third keynote, it's just a reminder of how great some of the speakers are in these US conferences. Patrick Collison, the co-founder of the biggest, one of the biggest private companies, private Start-ups in the world and one of the smartest people going around. Sam Altman, co-founder of the hottest company at the moment, Openai. Then you've got two legendary investors, Kiril Solokoff, co-founder of 30 Day Research and Stanley Druckenmiller. And then you finish off with Patrick O'Shaughnessy, host of the biggest investing podcast in the world with the CIO of the biggest hedge fund in the world. It's a superstar Line-Up . 

Bryce: [00:25:53] It is. It is. And no wonder they've raised, I think it's over $85 million since founding the SOHN conference towards medical research. But Ren, we're going to take a quick break.

Alec: [00:26:04] The irony is that any one of those six people could probably just double that easily. Yeah. 

Bryce: [00:26:10] So, Ren, we're going to take a quick break. And then on the other side, we're going to dig into seven of the stocks that were pitched on the day at the same conference. And we're going to draft each of them to create a portfolio ourselves. So let's take a quick break and we'll be right back. 

Alec: [00:26:43] We want to say a massive thank you to Milford for powering the Equity Markets US tour. If you want to give your portfolio an offensive and defensive strategy, check out Milford's award winning Milford, Australia, an absolute growth fund. 

Bryce: [00:26:55] Utilising the skills of Milford's experienced investment team. The Milford Australian Absolute Growth Fund has been focusing on delivering a smoother journey for investors for over half a decade. 

Alec: [00:27:05] With an emphasis on managing risk and generating absolute returns. This lower volatility equity fund can play a key role in a diversified portfolio. The fund strives for long term capital growth, while mitigating the ups and downs typically experienced when investing in share markets. 

Bryce: [00:27:18] Find the Milford Australian Absolute Growth Fund ticker symbol MFOA on your trading platforms or at milfordasset.com.au. And before you invest, be sure to read the Fund's product disclosure statement and target market determination found at Milford asset icon dot Value. When we're sitting here in New York City as part of the Equity Markets US tour and we've just listened to some of the keynote presentations from the Sohn Hearts and Mind conference, and now it is time to jump into six of the stocks that were pitched by some of the world's best investors. How this is going to work, we're going to take it in turns to draft one of the stocks and create a portfolio. 

Alec: [00:27:59] Yep, let's let's do it. Some of these stocks, I guess, are more known than others. Yes, and we should say so. There were six stocks that we found that have been pitched. So we'll talk about them. There was a seventh stock pitch, well, a seventh pitch, which was four bonds for a company called Level three. And I was Googling them. There's not a lot about them. Online level Three's parent company is called Lumen. Heard of that company? 

Bryce: [00:28:27] I don't know. 

Alec: [00:28:28] I hadn't. So I Googled them. And here's what this. 

Bryce: [00:28:32] Isn't part of the this isn't part of the. 

Alec: [00:28:34] No, because it's like bonds. It's for a company that we don't know that we can't like, we can't buy those bonds and because we don't have the. Yeah, yeah. So but I just want to, I just want to tell you what I saw. 

Bryce: [00:28:44] Yeah.

Alec: [00:28:45] So Lumen Technologies, enterprise technology for the digital revolution. Okay. Is this more descriptive? Lumen is a global enterprise technology platform enabling companies to capitalise on emerging applications and the data powering modern business. What does it do?

Bryce: [00:29:03] I don't know.

Alec: [00:29:06] So we're not going to worry about the bonds for that company. We'll just focus on the six stock pictures. 

Bryce: [00:29:12] Nice. Okay. Who's going to start? 

Alec: [00:29:18] Whoever has the worst sleeping arrangements? 

Bryce: [00:29:23] Fine. You can go first. 

Alec: [00:29:25] You know, to rock off. Not good. It's not good. 

Bryce: [00:29:28] Or is paper, rock, scissors, paper, rock. Ren wins. Paper based rock. Let's go.

Alec: [00:29:38] All right, so let's let's go through these stock pitches I am going to draw first. We've got six companies on the board. I'm going to pick a company that I never heard of before, Vitesco Okay. Heard of them? 

Bryce: [00:29:54] No. 

Alec: [00:29:55] They are a German automotive supplier for drive, train and Powertrain Technologies. They're they make components for electric vehicles. The reason that I'm going to pick them first is because of the person that pitched to the Stones. David Einhorn. Now, we would have loved to get him in New York. 

Bryce: [00:30:16] We did actually get a response from his team. 

Alec: [00:30:19] It was a hard No, wasn't it. 

Bryce: [00:30:20] It it was a it was a nice no.

Alec: [00:30:24] It was an emphatic no. So for people who aren't familiar, David Einhorn is he's a really well known investor and really accomplished who has had outside of the last year or two, he's done quite well, but he's had about ten years of terrible performance. He famously was short Tesla and Elon Musk made short shorts and sent them to him. Yes. And he lost a lot of money on that Tesla short. But David Einhorn, he's had a couple of good years. His style of value investing may have gone out of fashion, but it's come back a little bit in 2022 and 2023. But this just feels like quite an interesting company, two and a half billion euro market cap. It's seen as a major beneficiary for this electric vehicle burn. It's not profitable yet, but Einhorn thinks that it. We'll triple its earnings by 2026 as a lot of as is a level of like rationalisation in the electric vehicle market. A lot of electric vehicle makers right now are making a lot of money or aren't making any profit at all because competition's hot, they're fighting for market share. But he thinks as the industry starts to mature a little bit more, then the companies that are supplying the electric vehicle companies will do better. So that's his pitch. But I yeah, interesting one, not one that I know a lot about. 

Bryce: [00:32:01] All right. So I'm going to go with a stock pitched by a female investor called Mala Goenka, and she's the founder of CIG Capital Partners, another one that we actually tried to reach out to. So Mala, if you're listening, would be great to get you on the show. She used to work at Lone Pine Capital and previously was a and a consultant for BCG, but she pitched at the London Stock Exchange. Now the reason I am pitching, getting this in the draft Ren is because she brought to light something that I had no idea about with the London Stock Exchange, which is so firstly $46 billion market cap. Well, yeah, a pretty big there then. Now a dot of business. Okay, more than a stock exchange. So they acquired a company called Refinitiv and it's an American sort of British global provider of financial market data and infrastructure. And. Since the acquisition. That company or that subsidiary now makes up 67% of revenue for the Globe. For the London Stock Exchange. So it was a great acquisition. Revenues for the firm sort of over the last five years were hovering around sort of two $2 billion and post acquisition that now six $7 billion. So serious bolt on opportunity and that's why she's pitching it. She said the firm is poised to benefit from this and also from the golden area of fixed income and high interest rates.

Alec: [00:33:39] They go, All right, nice. Well, let's keep this moving. Let's keep talking about the stocks that were pitched by some of the best investors in the world for the name of charity at the Sohn Hearts and Minds Conference. I'm going to pick a company that we are all familiar with. Oh, sorry. It's not the Sohn Hearts and Minds conference, is it? That's the one in Australia. It's just the Stone conference. Yeah. Yeah. I'm going to pick Sony. Trading in Japan, Ticker six, seven, five, eight. Pitch by division. That's me, the founder and chief investment officer of Vala Global. Everyone knows Sony like the PlayStation, the entertainment businesses, the electronics business. Everyone is familiar with Sony. But according to Division, she thinks that Sony is misunderstood by Wall Street and thinks it could rise 50% through the end of fiscal year 2024. She thinks the assets that they have, I misunderstood, but they are market leaders in a lot of the spaces that they play as almost every business seems to be doing now. They're trying to make that transition to more recurring revenue like software as a service, distributing things online. Yeah, to give an example of that, Sony Hope by 2025, 80% of their gaming business, the revenue will come from subscriptions and from software. So if you think about, you know, the PlayStation, more and more they're trying to push people to buy things online rather than physical disks and more and more that try to get you to buy more stuff on the game loot boxes. And I don't know, I don't, I don't have a PlayStation. But if they can make that transition and it becomes less about selling physical games and physical PlayStations and more about distributing things online. Just the profit you make on that is so much higher. An interesting fact from the press as well. They have the largest image sensor business in the world. Every iPhone uses Sony's image sensor technology. Yeah. So there you go. 

Bryce: [00:35:57] Image sensor technology. 

Alec: [00:35:58] Don't ask me. Google it. 

Bryce: [00:36:05] There's a lot happening here in New York. And apologies if you can hear the multiple sirens going on outside city that never sleeps, just like Ren on his air mattress. 

Alec: [00:36:14] City that never sleeps at 12:30 p.m. on a very Thursday. 

Bryce: [00:36:17] So the second stock going into my portfolio, Ren, is a company called Mirati Therapeutics. It was pitched by an investment firm called Boxer Capital. Now Boxer Capital specialises in biotechnology investments, so they certainly know what they're talking about. Mirati Therapeutics is an oncology company that obviously focuses on cancer therapeutics. Interestingly, it has a $3 billion market cap but also has $1,000,000,000 in cash on the balance sheet. Now the pitch here was around two things. Firstly, their lead drug received approval in December of 2002, so late last year, which is great news. And secondly, the company is down 80% from its all time highs. So a billion on the balance sheet, 3 billion market cap, really valuing the company at about $2 billion. The market valuing the company at about $2 billion. The pitch was that there's just a meaningful upside given whether the price has fallen. The drug's just been approved. They obviously feel like it's in a position where that stock's going to start rebounding. 

Alec: [00:37:30] Down 80% from its all time highs. A quote from the conference, A generational drawdown in biotech. 

Bryce: [00:37:39] Across the board. Yeah. There you go. 

Alec: [00:37:42] I mean, biotech's just not a part of the market that I've ever invested in because it's so reliant on something that I have zero knowledge onDrug approvals. 

Bryce: [00:37:51] Yeah. Yeah. All right. So just to recap where we're at, I've got a therapeutics company and the London Stock Exchange. Wren, you've got Sony and Vitesco, the German. Automotive supplier. 

Alec: [00:38:04] Now there are two pitches left. So for the third pick of the draft, I'm going to pick the company that I think is more interesting of the the two remaining Talon energy. Currently not listed because it went bankrupt.. Not a good start of. But it's a nuclear power company, so it owns Susquehanna. Don't know how to pronounce that, but it's a big nuclear power plant that it also owns ten gigawatts of non-nuclear energy production facilities. The company filed for bankruptcy and notably filed for bankruptcy in a period where electricity prices were rising. Not ideal, but David Rosen from Rubrik Capital has pitched it as his. Once it gets out of bankruptcy, it's going to list again on the New York Stock Exchange or the Nasdaq. He thinks it will list by the end of the year. He thinks the new management team will make it a good investment. 

Bryce: [00:39:08] Get the job done. 

Alec: [00:39:08] So super high risk. All right. So that leaves you with the final pitch of the conference, at least that we could find not one company, but three. 

Bryce: [00:39:19] That's right, Ren. So this was a pitch from Andrew Waste from Waste Asset Management, and he pitched three Korean holding companies. So the first is SQ Square, the second is Samsung S.A. and the third is LG Corp. Pretty simple pitch here. All three of them are trading at a 70 to 80% discount to their net asset value. 

Alec: [00:39:44] According to Andrew. 

Bryce: [00:39:45] According to Andrew, he's unclear what's driving the discount other than management and government concerns, which he believes are overblown and the market is overreacting. So pretty easy.

Alec: [00:39:59] Samsung's leader is in jail. 

Bryce: [00:40:03] It's overblown. So he's really just saying. At some point he believes that that discount is going to come back, I guess get back to a bit more closer to parity and now's the time to get in. 

Alec: [00:40:21] Sorry, he was in jail. He was back out.

Bryce: [00:40:24] He was back out and still in leadership of the company. 

Alec: [00:40:27] He was pardoned in August 2022. So he went to jail in 2021 and then was pardoned in August 2022 and took back over as chairman of Samsung.

Bryce: [00:40:37] So, look, three Korean holding companies, all trading a big discount value play here similar to. Well, yeah, just a value play. Yeah. Hoping that at some point the market I guess gets a closer to what their net asset values are. 

Alec: [00:40:54] Yeah. Samsung's been come up a few times over the journey here at equity markets as a key semiconductor player alongside TSMC. LG, I feel like we've heard a little bit about as well. Not as much, but yeah, an interesting one. That's the draft there. The stock picks we could find from this $4,000 a seat conference. What my biggest takeaway is just the absolute geographic diversity of the stock pictures. It's an American conference, but there was only one American company or two American companies pitched in the nuclear energy talen energy and then morality, therapeutics. They're the two American companies. And then aside from that, we've got a Japanese company and Sony, a British company in the London Stock Exchange, a German company in Vitesco, and then three South Korean companies. 

Bryce: [00:41:51] No, Aussies. 

Alec: [00:41:53] Yeah, that's not surprising. We did go down to Wall Street and we asked a few people what their favourite Aussie company was. Yeah, those few good answers. 

Bryce: [00:42:01] Unfortunately, we didn't get inside Wall Street and a lot of people who worked there didn't want to say anything given the nature of their work. But we did find a lot of cool characters, so it's been an awesome trip so far. If you're just tuning in, make sure you check out our Wealth Builders episode that comes out on Thursday. It'll be the second episode of our three part series where we're digging into some of Warren Buffett's most well known and discussed investments and some of the lessons that we've taken from those. So that's a shout out as well. To Milford, a lot of global stocks pitch today, Ren. And Milford are a leading New Zealand fund manager who are now available for Australian investors and advisors, a global asset manager. And this tour has been really sponsored and brought to you by Milford. So a huge shout out and thanks to those guys. 

Alec: [00:42:51] Milford's talented and globally experienced investment team aim to deliver strong long term returns while managing downside risks. They also invest in the same funds as their clients.

Bryce: [00:43:01] Love to say it so you can strive for a smoother investing journey with Milford experienced active management and their award winning Milford Australian Absolute Growth Fund. The ticker symbol is MFOA. 

Alec: [00:43:12] Find the Milford Australia an absolute growth fund and other Milford funds on your trading platforms are at milfordasset.com.au. And before you invest, be sure to read the Fund's product disclosure statement and target market determination found at milfordasset.com.au. 

Bryce: [00:43:27] Love It, Ren. Well, that's the final episode for us here in New York, but the content will continue. We've been fortunate enough to speak with some experts over here, so over the coming weeks we will be releasing those episodes, also continuing with our Wealth Builders episodes, as I said. But we'll leave it there and pick it up next week. 

Alec: [00:43:47] Sounds good. I'm going to try and get a nap on your palatial king size bed. 

Bryce: [00:43:51] Nice while I'm on the floor tonight. Looking forward to it.