To The Moon

With US market behaving erratically since the beginning of August 2023, it sets me thinking how "best" should individual investor like me navigate the "minefield"?

Will we sleep "better" if we invest in (only) the best companies in the world? (see above)

Logically speaking, these companies should be able to weave some "magic" during bad times right?

Since they are the "best" of breed, is it "right" to assume that:

• During bad times, they know how to make light of the economic situation and adopt "survival" mode stance to weather through.

• During good times, adopt strategies to fortify one's position, paving the way for a brighter future.

• They should be hardy enough to weather through any drastic fall in their share prices too, right?

Criteria / Conditions:

1. The world's largest two economies by far, US and China, are headquarters for 9 of the 10 most profitable companies.

2. Equally important, 50% of the companies on the list are financial service firms while the rest consist of technology and energy firms.

3. Only companies listed on US exchanges, either directly or through ADRs, and OTC, are included in this list.

4. 4 of 5 companies on the list are based in China, most of them receiving major financial support from China's central government.

5. Selection criterion is based on 12-month trailing (TTM) net income.

6. Data is courtesy of TradingView.

7. All financial information is as of 30 Jun 2023, unless otherwise stated.

8. All market caps and one-year trailing returns are as of 16 Oct. 16 2023.

I have tabulated the Top 10 companies into 2 tables for easy reference (see below).

Top 1 to 5

Top 6 to 10

Are you surprised that most of the US companies are already US market darlings?

Due to limited real estate, I will touch and go on the highlighted yellow companies.

(1) $Microsoft(MSFT)$.

Microsoft develops, licenses, and supports a range of software products, services, and devices.

The company's products include operating systems, server applications, business applications, software development tools, video games, and more.

The company also manufactures personal computers, tablets, gaming and entertainment consoles, phones, other intelligent devices, and related accessories.

Microsoft also offers cloud-based solutions through its Azure cloud-computing platform.

The 2nd latest development at Microsoft would be integration of his investment end-results ChatGPT into its suites of products and the infinite possibilities with its new product - "Co-pilot".

Microsoft Copilot refers to Microsoft's AI companion that will span across all of Microsoft's applications and experiences, including [a] Microsoft 365, [b] Windows 11, [c] Edge, and [d] Bing.

With Copilot, users will be able to get AI assistance in virtually every aspect of their workflows on the different Microsoft applications.

The latest development at Microsoft is none other than the long overdue integration of Activision Blizzard (ATVI) into the company, after surviving different countries regulatory restrictions.

Justifications for Activision Blizzard's acquisition:

• Further improve its presence in the gaming industry and the metaverse, although the metaverse seems dead for now.

• To consolidate itself as the de facto king of cloud gaming.

Do you think Microsoft is about to enhance:

• The way we work via its suite of co-pilot products?

• The way we relaxed via its suite of cloud-based games?

• Its share-value for its shareholders, as a result of the above 2 latest projects?

(2) $Exxon Mobil(XOM)$.

The world's largest refiner of petroleum products, ExxonMobil is headquartered in Irving, Texas.

The company distributes [a] fuel, [b] lubricants, and [c] chemicals around the world under its four brands: [1] Esso, [2] Exxon, [3] Mobil, and [4] ExxonMobil.

The company's upstream oil and gas production division includes various production chains including deep water, unconventional, heavy oil, and liquefied natural gas chains.

For Exxon Mobil, its latest project is the acquisition of Pioneer Natural Resources.

• As part of the agreement, Pioneer stockholders will receive 2.3234 shares of Exxon for every Pioneer share they own.

• The deal is expected to close in H1 2024, said Exxon Mobil, in their press release.

• Exxon said its production volume in the Permian Basin would more than double to 1.3 Million barrels per day once the transaction closes.

Do you think it’s time to “buy the dip” in anticipation of Exxon ascend in H1 2024, when production ramps up?

(3) $Bank of China, Ltd.(BACHY)$.

This state-owned commercial bank provides a broad range of banking and financial services to individuals, corporations, government authorities, and financial institutions.

Its services include:

• Savings.

• Deposits.

• Lending.

• Mortgages.

• Credit & Debit cards.

• Trade-related products.

• Credit facilities.

The bank also offers insurance, underwriting, stock brokerage, investment research, and asset management services.

In another post, I have just mentioned that banks are tightly coupled with a country's economic status. So is Bank of China with China's economy, that is not exactly in the pink of health.

On Fri, 20 Oct 2023, the bank's stock price crossed below its 200-day moving average. (see above)

The stock has a 200-day moving average of $9.29 and traded as low as $8.70.

Bank of China shares last traded at $8.71, with a volume of 87,105 shares changing hands.

With China's economy facing multiple challenges & risks in 2023:

• Property crisis.

• Weak domestic demand.

• Geopolitical tensions.

Forecasters have slashed its growth outlooks for 2024, expecting a further slowdown.

It is hard to estimate when China's economy will recover, but analysts believed that it may take several years to resolve the structural problems and restore confidence.

Is it prudent to hold off dumping any monies, lest recovery is further down the road?

(4) $SHELL PLC(SHEL.UK)$.

This is the only non-US & non-China energy company that made it into the World's Top 10.

Shell is an international energy company that operates refining and petrochemical complexes around the world.

The company's primary line of business is the exploration, production, processing, transportation, and marketing of oil and gas.

Headquartered in London, England, the company's product line also includes lubricants and petrochemical products used in plastics, coatings, or detergents.

Latest development at Shell is its CEO's cutting hundreds of contractors from its workforce, amid a major efficiency drive to aim for bigger shareholder returns. (see above)

With a new CEO, Shell appeared to row back on plans to cut oil production each year for the rest of the decade, promising instead to focus on “value-based decisions” over oil output rather than specific production targets.

The “bigger shareholder returns” is just about the most enticing bit of the news article. Is it time to load up on some Shell now, when stock price is still ?

• Do you think it is “safe” to invest in the 10 companies mentioned?

• Do you think it is “safe” to invest in the Chinese firms that made it to the list?

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