Last week, on 16 July 2024, I was invited for a short interview on Money FM 89.3, Singapore’s first business and personal finance radio station. My friend Willie Keng, the founder of investor education website Dividend Titan, was hosting a segment for the radio show and we talked about a few topics:
- The drivers behind the stock price performance of US banks (Hints: In the short term, banks are facing pressure in a few areas, namely, a lower net interest margin, weak demand for commercial loans, and a continued deterioration in the US office properties market; in the long run, it’s the healthy of the US economy that will be the key driver and the economy still looks to be on solid footing even though there are some signs of a slow down)
- My views on Goldman Sachs’ latest results (Hints: Goldman produced strong growth in the second quarter of 2024 and as an investment bank, this may be a sign of activity in the financial markets warming up)
- US stocks from the financial sector that are on my radar (Hint: I have been interested in thrift conversions, which is a niche corner of the US banking industry; thrifts, which are small community banks in the USA, tend to carry low valuations and get acquired at relatively high valuations)
- Salesforce’s latest round of layoffs (Hint: It’s likely to be part of the normal day-to-day decisions that management has to make to keep costs in check; Salesforce has been on a quest to improve its margins since late 2022 and has been successful in doing so)
- The impact of artificial intelligence, or AI, on software-as-a-service businesses (Hint: There are multiple possible outcomes, although my current stance is that AI will be a net positive for SaaS businesses)
- Why it’s so difficult to tell when the stock market will peak (Hint: When looking at important financial data – such as valuations, interest rates, and inflation – at the cusp of past bear markets in US stocks, no clear signal can be found)
- How valuations impact long-term returns (Hint: In general, when valuations are high, long-term returns tend to be low; conversely, when valuations are low, long-term returns tend to be high)
- What can investors do to help themselves ride through market cycles (Hint: It’s critical to constantly remind ourselves of what is important – the underlying long-term business performance of a stock)
- The concept of the “destination” (Hint: The concept of the destination is the idea of focusing on the eventual returns we can earn from a business over a multi-year, perhaps even multi-decade, holding period, and ignoring what happens in between)
You can check out the recording of our conversation below!
Disclaimer: The Good Investors is the personal investing blog of two simple guys who are passionate about educating Singaporeans about stock market investing. By using this Site, you specifically agree that none of the information provided constitutes financial, investment, or other professional advice. It is only intended to provide education. Speak with a professional before making important decisions about your money, your professional life, or even your personal life. I have a vested interest in Adobe, Microsoft, and Salesforce. Holdings are subject to change at any time.