EM Fund Stock Picks & Country Commentaries (April 6, 2025)
AI bubble (Nvidia/CoreWeave/DeepSeek), all about Trump's tariffs (impact on Vietnam, etc), BYD’s EV dreams, rediscovering South African stocks, Asian/EM debt, fund updates/annual reports, etc.
Last week’s post mentioned an All-In Podcast episode (The AI Cold War, Signalgate, CoreWeave IPO, Tariff Endgames, El Salvador Deportations) had an interesting discussion between Silicon Valley tech titans about Nvidia where reasonable explanations were given to explain some of the questions that have been raised about its balance sheet.
However, this alt-media podcaster had some alt-finance personalities on who discussed the AI bubble starting to deflate, data center overcapacity in the USA, and who raised questions about Nvidia and the CoreWeave IPO (suggesting the latter’s existence is intended to inflate the stock of the prior while the early investors have cashed out of the later who’s shares are getting dumped onto pension funds and retail investors…):
🎙️Dotcom bubble and a housing market crash simultaneously- Melody Wright and Jack Gamble (Michael Farris (Coffee and a Mike)) 1:18:12 Minutes (April 2025)
Melody Wright [m3melody.substack.com] is a strategist, writer, technologist living in Johnson City, TN. She joins host of “Nobody Special Finance” on YouTube Jack Gamble to discuss the CoreWeave IPO, Nvidia, DeepSeek, AI bubble, FHA loan crisis and much more.
Again, I don’t follow Nvidia and the Mag 7; but they are a big chunk of the US market and in many ETFs, funds, and pension funds. In other words, a deflating AI bubble is going to cause considerable damage to people’s net worth and have other economic fallouts…
Melody also mentioned having to resort to using “a room full of [cheap] Indians” to classify documents in lieu of trying to train AI over and over again to get it right. She thinks Western techies have gotten lazy (gotta get that 3PM matcha latte and play some fuzzball…) and have stopped being creativity - necessitating the use of non-Western developers to at least get work done. On the other hand, DeepSeek has challenged Western developers and will force them to be more creative (and maybe less lazy…).
Jack also mentioned this interesting, I guess alt-tech news site, called The Information that apparently has ruffled the feathers of Jim Cramer and other corporate media tech/AI shills or Wall Street analysts with its reporting about the AI bubble (“…We founded The Information in late 2013 with a simple idea: write deeply reported articles about the technology industry that you won't find elsewhere…”):
The other discussion on housing was also interesting for Americans as Melody thinks a bursting AI bubble will also be bad for housing as she commented about her surprise (as she worked in fintech/loan origination, etc.) to find out how many people have just one stock in their portfolio (Tesla and now Nvidia…) that they are trying to get rich on…
She also said that FHA mortgages (intended for lower income and first time American home owners - these government backed mortgages then get repackaged as investments, sold to investors and “alot can be hidden in them…”) have been abused by investor speculators (think fix and flip or AirBnB operators who lied on their mortgage application about their intention of living in a property and might have trouble servicing their mortgages) with regulators and banks largely looking the other way.
Towards the end of the podcast, both explained how “price discovery” (something Wall Street, etc. has long tried to avoid) is finally returning - whether its in tech or housing market. The good news? Homes might at least become more affordable again for first time homeowners again…
Getting back to emerging markets and as of the beginning of April, a few March updates and annual reports (our continuously updated post containing all funds is here - January 2025 research has been removed) have become available along with plenty of new podcasts and research - especially focused on tariffs:
🎙️🌐 There is a transcript for this William Blair podcast: Did the AI Bubble Burst? (36:54 Minutes) - Is it possible to identify a market bubble before it bursts? On this episode of The Active Share, Hugo welcomes James Mackintosh, senior market columnist at The Wall Street Journal, for a deep dive into the current state of the U.S. equity market. Together, they explore the impact of artificial intelligence (AI) and U.S. exceptionalism in today’s global economy and explore strategies for identifying compelling investment opportunities and navigating uncertainty in a rapidly evolving landscape.
🔬🌐 Trump, tariffs, and the dollar’s role as reserve currency (Janus Henderson Investors) - Chief Investment Strategist Myron Scholes and Global Head of Asset Allocation Ashwin Alankar argue that the costs of sacrificing the U.S. dollar’s status as the world’s reserve currency are too large to justify any dubious attempt to reshore a large amount of manufacturing capacity back to the U.S.
Morgan Stanley has these pieces:
🎙️🌐 We Are Past Peak Tariff Uncertainty, not Volatility (5:03 Minutes) - Jim Caron, CIO of the Portfolio Solutions Group, shares his macro thematic views on key market drivers.
🔬🌐 How do Automotive Tariffs Impact the Auto Corporate Sector? History in the Making - The Trump Administration has imposed a 25% additional tariff on automotive imports effective April 3, claiming it will fuel domestic manufacturing. But critics fear it may put the brakes on automakers that depend on global supply chains.
DWS has these pieces:
🔬🌐 Trump’s Tariffs: Is Free Trade a Thing of the Past?
The US has announced tariffs on global US imports that are significantly higher than most experts had expected.
Although we assume that the tariffs will not remain at this level in the long term, bilateral negotiations on tariff reductions are likely to be very difficult.
A shift away from global confrontation towards global cooperation appears necessary to limit the damage to the economy and the stock markets.
🔬🌐 When businesses stop investing - So far, Trump’s tariff threats are mainly harming sentiment. That could change quite quickly, in ways that would be hard to undo or mitigate.
🔬🌐 Wasatch Views on U.S. Tariffs (Wasatch Global Investors) - Below are a few thoughts from the different Wasatch teams on what the tariffs mean for their portfolios and markets in general.