EM Fund Stock Picks & Country Commentaries (May 4, 2025)
AI's “bulls**t cascade” + AI agent/tariff reality checks, Vietnam’s gov't restructuring, Brazil's "land of the future," EVs in EM, Russia’s frozen sovereign assets status, March/Q1 fund updates, etc.
A couple of quick notes: Craig Fuller, CEO and Founder of FreightWaves (a good source of supply chain and tariff/trade war news) appeared on the Coffee and a Mike podcast which also has a Substack:
In addition, the latest All-In podcast had a good discussion (and reality check) about the impact of tariffs and about so-called AI agents:
🎬 Trump's First 100 Days, Tariffs Impact Trade, AI Agents, Amazon Backs Down (All-In podcast) 1:35:05 Hours (May 2025)
(0:00) The Besties welcome Box's Aaron Levie and Flexport [The Supply Chain Logistics Platform]'s Ryan Petersen!
(4:05) Is Sacks back?
(8:16) Reflecting on Trump's first 100 days
(28:13) Global trade disruption, how businesses are dealing with tariffs
(49:11) Amazon flip-flops on tariff pricing feature; national security issues
(1:04:10) AI agents, 1,000,000X'ing AI, and more
Follow the besties:
The corporate media won’t tell you this, but it was mentioned how there are many creative workarounds to get around or deal with the tariffs e.g. placing tariffed items into bonded warehouses (in Mexico/Canada, etc.) where you only owe the duties when the items leave (however, there may not be much space available right now…), etc. Note that the tariffs are based on departure dates (April 9th - so everything arriving in the USA by now will be subject to tariffs).
It was stated that nobody is in China right now for cheap labor (as its cheaper in parts of SE Asia. etc.). They are there for quality manufacturing. It was also noted there are reasons Tesla builds in America (and Elon was not forced to do so by anyone) while Chinese exporters (now most of the biggest sellers on Amazon) don’t even need to create a US legal entity to operate on platforms like Amazon (who seem to Chinese over American sellers).
Chamath also made a good observation about how Trump “has this strength where he shapes these potholes for the mainstream media to fall into…” He noted that Trump’s tax bill will allow “all the PPE and the incidental costs for building a factory” in the USA to be FULLY deducted which would create an “economic bonanza if passed;” but unless you are listening to the All-In podcast or reading Scott Bessent’s tweets, there has been zero coverage of this proposal from the mainstream media. Chamath then complained that he “finds himself hunting and pecking for the things that matter” that he as a CEO needs to have while the media is to busy running fake stories about Tesla’s Board wanting to replace Elon and what an alleged MS-13 gang member may or may not have tattooed on his knuckles…
The AI agent discussion was also good and covered some Chinese and other providers. It was noted that AI agents have opened up new opportunities or lines of business that may not have been profitable before or worth the time to get to (e.g. having AI call ALL truck drivers regarding loads, etc.).
However, Chamath thinks we have already hit the “trough of disillusionment” with AI due to the “bulls**t cascade” for the last few years:
What he means is that many CIOs have signed up an AI product because their CEOs asked them what their AI strategy is because someone on the board asked them what they are doing about AI. He thinks there are some real technical complications that have not been solved e.g. for heavily regulated industries where there are BIG FINES for mistakes. He believes that QA has now the most important consideration e.g. the least talented engineers used to be allocated to QA whereas with AI, it will need to be the most talented ones (aka “improvement engineering”).
Someone else noted they used the best model in the world (Grok 3) where they sent it 500 documents and told it to fill 40 data fields on a single pass. The best score has been 90%. Obviously, this is not good enough for heavily regulated sectors or sensitive tasks and you need to experiment e.g. break the data up into smaller pieces and use other tricks to solve such problems - something I have found when using free Chinese AI providers to help extract info for this Substack...
As of the start of May, more March/Q1 fund updates have become available (our continuously updated post containing all funds is here with February research now removed) along with new research - it does seem like both the business media and fund managers have been pushing investing in Europe lately e.g.:
🔬🇬🇧🚩 Why the UK market is well-positioned to withstand the US tariff storm (Fidelity) - Alex Wright, portfolio manager of Fidelity Special Values shares his perspectives on the recent tariffs-related market volatility.
🇬🇧 Frasers Group plc (LON: FRAS / FRA: ZVX / OTCMKTS: SDIPF) - Retail, sport & intellectual property group.
🇬🇧 DFS Furniture plc (LON: DFS / FRA: DF0) - Furniture retailer (sofas & soft furnishings).
🇬🇧 Halfords Group plc (LON: HFD / FRA: HDK / OTCMKTS: HLFDF) - Retailer of motoring & cycling products & services.
🌍 Genuit Group plc (LON: GEN / FRA: 0P5) - Manufacturer of plastic piping systems for residential, commercial, civils & infrastructure uses.
🇬🇧 Crest Nicholson Holdings plc (LON: CRST / FRA: C38) - Homebuilder.
🇬🇧 Henry Boot plc (LON: BOOT / FRA: 0KH) - Homebuilder.
🌐 Reckitt Benckiser Group plc (LON: RKT / FRA: 3RB / OTCMKTS: RBGLY / RBGPF)
🌐 British American Tobacco plc (LON: BATS / NYSE: BTI)
🇬🇧 National Grid plc (LON: NG / NYSE: NGG)
However and over in the alt-finance space:
💻 Tether CEO Paolo Ardoino: 'Many' European Banks Will 'Blow Up' In The Next Few Years (Zerohedge) 🗃️
In an interview with the Less Noise More Signal podcast, Ardoino highlighted how stringent regulations and risky banking practices could precipitate a wave of failures, drawing parallels to the collapse of Silicon Valley Bank in 2023.
Ardoino’s concerns center on the European Union’s regulatory framework for stablecoin issuers, which he argues exacerbates systemic risks rather than mitigating them. “The regulation was pushing us to keep 60% of our reserves in uninsured cash deposits in Europe,” the Tether CEO told host Pascal Hügli, describing a scenario where stablecoin issuers are forced to park billions in vulnerable bank accounts. “Imagine that you have 10 billion euros in market cap of your stablecoin in Europe. Then 60% needs to be kept in uninsured cash deposits in a bank. Uninsured cash deposit means that the bank insurance in Europe is only 100,000 euros. If you have 10 billion, 100,000 euros is like a spitting on a fire.”
🎬 Tether CEO Paolo Ardoino: Banks will blow up in the next years (Less Noise More Signal) 48:09 Minutes (May 2025)
In this conversation, Paolo Ardoino, the CEO of Tether and Pascal Hügli, discuss the ethos of Bitcoin and Tether's journey in the cryptocurrency space. Paolo emphasizes the importance of stablecoins in emerging markets, their role as better banks compared to traditional institutions, and the potential of technology to enhance human capabilities. The discussion also touches on the challenges faced by stablecoins and their impact on global economies, particularly in regions with unstable currencies. Chapters:
New Asia Fund Documents & Research
⏰🎬🌏 Invitation – Asia Frontier Capital – Quarterly Webinar on Thursday, 8th May 2025 (Asia Frontier Capital)
The webinar will highlight the following key points:
The impact of U.S. import tariffs on Asian frontier markets
Which Asian frontier markets are relatively less exposed to U.S. trade
Why we believe Asian frontier markets can offer relative outperformance in the current trade and geopolitical environment
Key country picks for the AFC Asia Frontier Fund
2025 Outlook for the AFC Asia Frontier Fund, AFC Iraq Fund, AFC Uzbekistan Fund, and AFC Vietnam Fund
The webinar will be held on Thursday, 8th May 2025 at 9:00 am NY, 2:00 pm UK, 3:00 pm Swiss and 9:00 pm HK/SG time and will be recorded for viewing at your convenience.
The webinar will run for 75 minutes, including a 30-minute Q&A session following the fund managers' presentations.