What's so interesting is your view on valuations in China, opportunities to be investing in China in this context. Is it ripe for investment? Well, it's a critical question here. Really, the argument for China, and China's big tech in particular, is a valuation argument.

When you take a look at big tech and the types of companies that you have, they're very strong competitors, very strong balance sheets, shareholder-friendly, strong earnings, and very low valuations. In a world in search of low valuations, that's attractive.

But of course, you don't get those low valuations without some headwinds, or headwinds to contend with in China. And of course, that's on the geopolitical side, but it's also on the economic side, whether you're looking at

the property sector or just looking at consumer demand. So there are a lot of considerations. What I think would give investors pause. The upside is that there's a margin of safety that can cover that. So we wouldn't suggest that investors pile all their assets into China, but we

would argue that the valuation opportunity is compelling enough that maybe some exposure would make sense. Well, then you compare and contrast to the valuation lack of opportunity here in the US. I'm looking at a video trading at 47 times, let's call it, future earnings.

We've got a $3.3 trillion market cap; the margin for error is very, very small. When you're considering China, that's—I mean, that's exactly right. So what you have in the U.S.

It's kind of a young Yang compared to what you see in China. So, of course, you have very fundamentally strong companies, a strong economy, and some potential geopolitical concerns, but nowhere near what you're seeing in China.

And yet, the valuation argument isn't there. So, if we're taking a look just over the course of 2024 and we're looking at the Max seven, we saw a price-to-estimated-earnings ratio at the start of the year of

around 35, and today it's around 40. That's not extreme. It's not at the extreme levels that we've seen over the past five years, but it's certainly above that five-year average. And it just means that it's going to take a lot more to surprise investors on

the upside for there to be a positive reaction. And we've seen that over the course of this year, most notably in the summer when Nvidia largely beat expectations, but the market sold off. So I think that just takes a lot of the excess return feel out of

these names. Look at Adobe; case in point, today they managed to deliver on this fiscal quarter, but the forward-looking forecast didn't live up to expectations and it's dragged the stock significantly lower. I'm interested in, though, Alphabet

managing to reach new heights. They want to go so much into individual names, but from an antitrust perspective, are we putting that to the back burner? Are we not worried so much about the power, the domination of these Max sevens? Well, it's an interesting question.

because the antitrust and really the regulation considerations around big tech have been something of an overhang for these companies for quite some time. And now we're starting to see that come to the fore a bit more. I think when we're taking a look at Alphabet and we're looking at some of

these considerations on the regulation or antitrust front in particular, there's still some unknown, some challenges that will come about as these companies kind of navigate exactly how they're going to play out with the antitrust and what steps they're going to actually take.

I don't think that's necessarily clear. And in the meantime, we still have a very strong, fundamentally healthy company that looks to accelerate some of the opportunities. For me, I look, you're helping oversee $57 billion in assets under management at Malta.

I'm interested, therefore, where you do see the risk-reward, right? Right now, is it about diversifying, broadening out from the Mag seven at this moment? Well, listen, I mean, I think it's hard to step away from the Mag seven, most

obviously, because it represents such a large part of the overall market. A third of every dollar in the S&P 500 is going to these names. So it's hard to diversify away from them completely. And yet at the same time, they're all really keying off AI.

And as we've talked about, there isn't as much margin of safety. So as we head into 2025, our outlook calls for balance over conviction. And the way to play that, we think, is maybe to have just a modest underweight.

So some of these mega-cap names, or, you know, the biggest companies in market cap, and then add in some of these small-cap areas that have more relative value and also have some tailwinds. And we'll start to think about trying tax policy or thinking about potentially

lower rates over the course of the next year. And you mentioned rates.  Well, ultimately, should you be in equities from an asset class perspective? Is it all about equities? Is it worth going into the credit side of these tech names?

Well, it's interesting. I think when we're taking a look at where rates are headed, the expectation earlier in the year was that we were going to see potentially, you know, falling rates in a meaningful fashion over the next, call it, 12 months.

But as the economy has come in a lot stronger and as the market grapples with what Trump's policies might look like, I think the expectation is still there for lower rates, but maybe not quite to the same degree as people had previously thought. So when we're looking at fixed

income versus equities, right, I mean, yields are very attractive, but we're seeing this as more of a coupon clipping year and less of a total return year. And in fixed income, we're actually expecting lower, more moderate returns

on the equity side, too. So, in the sense of, and kind of returning to that theme of balance, we're calling for a year for balance on an asset class perspective as well.

Still Betting on the Mag 7

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중국 빅테크에 투자해야 한다는 주장은 주로 낮은 밸류에이션에 근거합니다.

중국 대기업은 강력한 경쟁, 재무제표, 주주 친화성, 수익, 낮은 밸류에이션 등 탄탄한 펀더멘털을 보유하고 있습니다.

그러나 지정학적, 경제적 역풍(부동산 부문, 소비자 수요)은 위험을 초래할 수 있습니다.

주의를 기울이는 것이 좋지만, 밸류에이션 기회는 어느 정도 노출될 수 있습니다.

미국 기술 밸류에이션, 특히 MAGA 세븐의 경우 오차 범위가 거의 없이 상당히 높습니다(예: 미래 수익의 47배에 거래되는 동영상).

미국 기업들은 근본적으로 강하지만 중국에서 볼 수 있는 밸류에이션 매력은 부족합니다.

미국 기술 밸류에이션(예: 주가수익비율)이 5년 평균을 상회하고 있어 긍정적인 시장 반응을 이끌어내기 위해서는 상당한 상승 여력이 필요합니다.

기대치를 뛰어넘는다고 해서 시장의 긍정적인 반응이 보장되는 것은 아니라는 것을 Nvidia 및 Adobe와 같은 사례를 통해 알 수 있습니다.

반독점 및 규제에 대한 고려 사항은 대형 기술 기업의 지속적인 관심사입니다.

반독점 규정이 알파벳과 다른 회사에 미치는 영향에 대해서는 불확실성이 남아 있습니다.

규제로 인한 어려움에도 불구하고 근본적으로 견실한 기업들은 성장을 지속할 것으로 예상됩니다.

MAGA 7의 시장 점유율이 높기 때문에 이를 벗어나 다각화하는 것은 쉽지 않습니다.

MAGA 7의 안전 마진이 부족하다는 것은 약간의 언더웨이트 포지션을 시사합니다.

2025년 전략은 대형주 비중 축소와 가치 있는 소형주 투자 등 균형에 초점을 맞추고 있습니다.

경제 실적 호조와 트럼프 정책에 대한 불확실성으로 인해 금리 인하에 대한 기대가 바뀌었습니다.

채권은 총수익 플레이가 아닌 쿠폰 클리핑 기회로 간주되며, 적당한 수익을 기대할 수 있습니다.

자산 배분에는 주식 전략을 반영한 균형 잡힌 접근 방식을 권장합니다.

Still Betting on the Mag 7

Still Betting on the Mag 7

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