To The Moon

Big-Tech’s Performance

Stock market "continuous rise" mode after FOMC Nov. meeting has made Powell a bit nervous, then his hammer came. At the same time, the US treasury auction once again nerves the market.

Big tech companies, especially, are leading the surge, risk-on mode is returning.

As of the close on November 9th, the return of big-techs in the last five trading days

$NVIDIA Corp(NVDA)$ (+7.92%), followed by $Microsoft(MSFT)$ (+3.55%), $Meta Platforms, Inc.(META)$ (+3.11%), $Apple(AAPL)$ (+2.73%), $Alphabet(GOOG)$ (+2.16%), and $Amazon.com(AMZN)$ (+1.83%). Only $Tesla Motors(TSLA)$ (-3.90%) record the negative.

Big-Tech’s Top Newsfeed

Apple fined $25 million by the US Department of Justice for hiring issues.

Apple lost its tax case against the European Union and may be forced to pay a $14 billion tax bill.

Microsoft releases a major update for Windows 11, including the AI assistant Copilot.

Meta and Apple, among other large US tech companies, may face strict regulation for their digital wallets.

Amazon will test advertising on Instagram and Facebook platforms under Meta for online shopping.

Amazon is implementing another round of layoffs, eliminating multiple positions in its music department.

Amazon is developing its second large language model, Olympus.

Meta CEO Mark Zuckerberg applies to sell $8.9 million worth of Meta shares.

Nvidia has developed the latest improved series of chips specifically for the Chinese market, with production expected by the end of the year.

Biden supports UAW entering Tesla.

Big-Tech’s Key insights

Will Tesla give in to UAW… or Biden?

As the only manufacturing company in the big-techs, Tesla is more sensitive to economic cycles. Due to industry expectations and questions about the company's profit prospects, it has fallen by a third since the financial report, but has also performed well in the rebound in the past two weeks.

The main reason for the big drop is Biden's statement on November 9th supporting the UAW to "make trouble" for Tesla. The reason why we say "make trouble" is because we feel that Biden is completely "watching the excitement and not afraid of big things" because-

First, UAW is a political organization, it’s not clean. But why didn't UAW President Sean Fern take action immediately? the political motivation is not enough, because his previous two terms have met Elon Musk. More importantly, the UAW chairman is not a good job, and often faces problems such as embezzlement and extortion. It succeeded in making trouble for GM and Ford, but getting more people to buy into it may backfire and harm itself.

Second, Biden is purely a bit of "gangster hatred" because Musk does not stand with the democrats. He moved Tesla's headquarters to Texas, built Gigafactory in other states, and even had closer ties with the red party. And Musk has been criticizing Biden on Twitter before.

Third, election year is coming. Gigafactoy is located in Texas (a red) and Nevada (a wing), and Biden has also begun to talk and win the favor of some voters.

Some Tesla Workers Say They'd Never Work in a UAW Factory

Of course, the market will give some feedback. After all, if it really breaks out, what will Musk do?

Move the Gigafactory to Mexico?

Fire all troublemakers and replace them with robots?

Compare with Chinese factories?

In any case, Tesla's "independence" means that its outcome may be very different.

Compared with its peers, Tesla does not have the pension burden of $General Motors(GM)$ and $Ford(F)$ (a large amount of liabilities lying on the balance sheet of DB plan). If it only increases worker wages, Musk, a workaholic, should try his best to "improve efficiency" in other aspects to make up for this burden.

The secondary market is most concerned about Tesla's fluctuations. As the company with the highest average transaction volume in the market, only fluctuations can create trading opportunities. And at around 200, whether it is expensive or cheap, it has become the focus of long and short struggles.

Trading volatility is a good choice.

The Big-Tech Portfolio

We combine the seven companies with the highest weights into an investment portfolio called the 'TANMAM' portfolio.

By equally weighting and adjusting the weights every quarter, the performance of this portfolio since 2015 has far exceeded the S&P 500, with a total return of 1355%, compared to the $SPDR S&P 500 ETF Trust(SPY)$ return of 252% over the same period.

The annualized return so far this year is 92.3%, higher than SPY's 14.7%. The Sharpe ratio is 4.28, compared to SPY's 0.99 over the same period.

At the same time, the return over the past five working days was 2.5%, exceeding SPY's 0.72%, and the Sharpe ratio was as high as 17.4, compared to SPY's 4.1.