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. Today, I am sharing subscriber comments with you. Membership member "th" left a comment expressing gratitude and made a valuable "Super Thanks" donation. I would like to express my sincere thanks. I will start by revealing my accounts first. My direct investment account in the US has seen its returns plummet to 90% and profits drop to 154 million won, while my domestic account remains unchanged with a 133% return and 7.9 million won in profit as the market has not yet opened.
Additionally, although profits in the second account have decreased, fortunately, foreign exchange gains are being maintained. Bitcoin has also turned negative. The current situation reminds me of a famous quote by Charlie Munger. We are looking toward 2030. To achieve high returns in the long term, we must learn to endure short-term losses in this "puddle"—a correction-like market—which is currently in August 2024.
Now, yesterday, the US stock market closed lower due to concerns arising from anxiety over NVIDIA's earnings announcement. Why did anxiety regarding NVIDIA's earnings announcement suddenly arise? It is precisely because of short selling. This is due to the report by Hindenburg. This has instilled anxiety in investor sentiment.
Hindenburg, currently famous as a short-selling firm for Nikola, released a report alleging accounting issues with Supermicro and that demand appears to have been inflated, effectively shorting the company. The reason these concerns have grown even larger is that SMCIN delayed submitting its business report yesterday, just one day after the short-selling report was released.
In other words, anxiety regarding AI is increasing. Concerns are growing over whether the demand for AI investment is exaggerated and if AI can actually make money. The reason this has such a significant impact is that Supermicro is the third-largest revenue generator for Nvidia, following Microsoft and Meta.
While there are many Big Tech companies, the fact that the company providing the third-largest revenue to Nvidia has been targeted by a firm famous for short selling is significant. This could serve as material for the media to discuss an "AI bubble." Therefore, the market hoped that Nvidia would definitively dispel these concerns once again, as it influences the stock prices of other semiconductor companies.
Now that Nvidia has risen to third place in market capitalization, SMP It accounts for a whopping 6.6% of the SMP 500. Therefore, if Nvidia experiences a significant drop this time, it could impact the SMP 500 and the Nasdaq Carylink. Now, Nvidia released its earnings report earlier, and both revenue and EPS exceeded expectations.
As expected, they delivered record-high earnings. Additionally, they announced that a share buyback had been approved. Furthermore, regarding demand for Hopper semiconductors, they made remarks to alleviate investor concerns, stating that robust demand remains in place. They also instilled expectations that demand for Blackwell would be surprisingly high.
The implication is that demand for Hopper is overflowing, and so is demand for Blackwell. In fact, Blackwell demand is currently exceeding supply, and this trend is expected to continue until next year, 2025. However, as I always emphasize, interpreting investor sentiment is more important than the data itself.
Currently, the earnings beat based on Nvidia's forecasts was a natural consequence that had already been fully reflected in the stock price. This implies that other aspects regarding demand were also priced in. So, looking at other detailed factors, despite delivering record-high earnings, the stock price is currently plummeting by a staggering 7%.
We can look at Dia. I mean, NVIDIA hit an earnings beat by exceeding revenue and EPS estimates, and demand is said to be overflowing, so why on earth is the stock price falling by 7%? We need to examine this part. First, to mention the first reason, the growth rate has slowed, and the very important net profit margin has also slowed.
If we look at the graph on the left, it shows NVIDIA's quarterly revenue growth rate. It had risen to about 260%, but now the growth rate has slowed to around 100%. However, it doesn't end there. While this is a unique company boasting very high demand, we can see a graph that suggests the net profit margin has also peaked and is slowing down.
Of course, it cannot grow at 200% forever, but Dia is a leading growth stock of all time, and investors are currently expecting record-breaking demand. On top of that, it is a unique company with unique products. Therefore, the growth rate should be maintained to some extent, and margins should not show a slowdown.
The fact that the growth rate and margins are slowing down for this record-breaking growth stock and unique company leads to the suspicion that it has now peaked and is slowing down. The point is that this could be connected. We need to provide another explanation for this slowdown in growth speed, and this is directly linked to the second sharp decline.
It raises the question of whether the "butterfly effect" created by the Blackwell launch delay is occurring. Currently, the Blackwell launch delay is a factor we were all aware of. However, the butterfly effect of the launch delay has manifested as a slowdown in Dia's earnings growth speed. The reason this resulted in a slowdown is that by announcing the new Blackwell product before it was even released, they created demand for pre-orders and waiting orders.
The downside of this is that the demand that companies need to purchase right now could falter. Let's think about this simply using our own example. If we decide to buy an iPhone 15, but then hear that the iPhone 16 will be released with massive upgrades in a few months, the demand to keep the iPhone 10 will decrease so that we can wait a little longer to buy the better iPhone 16.
The demand to wait a bit longer and buy the new, better model grew with the Blackwell unveiling, but because the Blackwell launch was delayed, the growth speed slowed, and the Osborn effect began to occur. The point is that it has emerged. To explain it simply for those who don't know what the Osborn Effect is, it refers to a situation where the demand for the current product disappears because the next new product is announced well in advance, rather than the one currently being sold.
However, adding my personal opinion here, while the correction and sideways movement might continue for a while longer, considering that the demand for AI remains overflowing, that semiconductors are essential in the Fourth Industrial Revolution, and that Nvidia is unrivaled, it will eventually break through the previous high and rise again.
Therefore, now is a time for patience and holding on. Ultimately, with good assets, the structure is such that those who endure and hold on until the end become rich. I think this is a time when patience and tenacity are most important. Now, if you look at the Nvidia daily chart, when that human indicator was in a super- overheated state, I thought, "Wow, surely not," but that really was an incredible signal of a peak.
To think that was the peak human indicator—when everyone was looking up to and cheering for CEO Jens Tang. It is true. I couldn't believe it. Now, however, the price has already fallen quite a bit. Yet, there are belated calls to reduce buying weight, saying that we should sell Nvidia, and even as recently as yesterday...
Investors who were clamoring to invest in Nvidia are suddenly changing their minds without any patience or perseverance. However, to share my personal thoughts frankly with you, I believe we should hold these stocks until at least 2030. Of course, I lack insight and do not invest in individual stocks due to risk management; instead, I am indirectly investing through semiconductors, the Nasdaq, and the S&P 500.
Since I believe they will eventually rise, if another painful correction comes, I plan to accept it as an opportunity and proceed with staggered buying of these stocks. Now, seeing this sharp decline is frightening, isn't it? Therefore, the majority likely perceive this as a crisis. Pessimists view the current situation as a crisis, while optimists view it as an opportunity.
The same situation unfolds for everyone, but individual choices create each person's future. So, instead of talking about inequality, you just need to choose to be part of the tiny minority. I am holding onto my Nasdaq, semiconductor, and S&P 500 holdings. Since dips can form like this, and I already have a certain amount of cash, there is no need to sell stocks separately.
I plan to simply hold onto them and seize the opportunity once again during this dip. I am still I have not yet found a better investment opportunity than the Nasdaq, SNP 500, and semiconductor sectors. That is why I have been holding onto these for four years; in fact, I am continuing my long-term investment by constantly picking up dips and increasing my holdings.
Charlie Monger advised that investing is about finding a few great companies and just sitting there with your butt firmly planted. Similarly, Jim Rogers noted that successful investors actually did nothing for most of their investment periods. In other words, when the market creates dips like this, they do not get distracted but stay still, buying when the desired price level is reached.
And now, the worst month, September, is starting soon. I plan to seize this opportunity again in this so-called worst September to further grow my assets. I am personally sharing everything with you. Don't be intimidated in September; the choice to seize the opportunity will accumulate and become your future.
For those who want to seize this once-in-a-lifetime opportunity, I will leave the membership link in the pinned comment, so please sign up and join the Telegram group; you will surely be out of reach. Now, let me say it again: there have always been excuses to sell. Even more serious than this situation.
There were more excuses regarding bad news. Nevertheless, if you utilize time, your assets will grow. So, endure the pessimism and hold on until the end. I will hold on longer than you, so please try holding on longer than I did. Your life will gradually chang.
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