4 Months In

A Good Start is Half the Battle

Here’s the update on how BREAKINGWATERS has progressed in it’s first 4 months of life.

SLIGHT BREAK WHILE BUILDING PHASE 2

Firstly, thank you immensely for being a subscriber to BREAKINGWATERS, I hope you are enjoying the content. This week I will be busy enhancing existing features and implementing new initiatives so normal service is reduced.

SPAM / ALOT

I also wanted to contact you directly because some people reported that they had not been receiving the emails. If you haven’t been receiving them regularly, can I ask you to look for “BREAKINGWATERS” in your spam folder and elevate it to your inbox so you get the emails going forward.

Some have also mentioned receiving too many emails at times which I have a plan to address.

4 MONTHS IN

I started BREAKINGWATERS just 4 months ago and I wanted to highlight some of what has been delivered in the four months.

SURPASSED 100 SUBSCRIBERS

People have been responding to the content and, subscriptions have been rising which is amazing. Some have even taken the step to sign up for a paid subscription (£3.99/mo or £39.99/yr)where I aim to offer deeper, more valuable content.

EXPERT-in-CONVERSATION SERIES (here)

William De Gale, Bluebox AM Tech Fund - we discussed AI and the Saaspocalypse. William was sceptical about the AI rally and equally the SaaS decline, noting that EPS estimates were expected to continue growing even while stock prices continued to fall. 3 months later, major SaaS names reported earnings that beat - already high growth - estimates (chart below).

Mikhail Zverev, Amati Global Innovation Fund - we discussed the next big thing and Mikhail outlined 2 areas they were focused on as real, happening now and technologically inevitable: photonics and memory.

He named Lumentum (LITE) as the name they liked in photonics - it’s up 38% since that call while memory - as measured by the Roundhill Memory ETF - is up 127%.

Alyx Wood, CIO Kernow AM - we looked at the UK (long and short) and Alyx outlined a compelling case for the UK. He also highlighted some names he likes (named below).

The audience has been coming from across the industry with some excellent organisations in attendance:

Books & Breakdowns (here)

We began a book club focusing on books that we can take learnings from for our investing. We also want them to be entertaining and I will do my best to get the author to join us for a Q&A at the end.

We have read The Man Who Solved the Market by Gregory Zuckerman and then BOOM and BUST with FT Book of the Year Winners John Turner and William Quinn, which was a truly fantastic conversation at the end. We learned so much about bubbles but especially useful is their framework for identifying bubbles - the fire triangle - Marketability, Money/Credit and Speculation.

I am in the process of selecting the next book and author so watch out for that. I have also posted several breakdowns of industry papers and have some good ones in the pipeline.

+ The Coming Wave (here) + How the Wave Broke (here) + Sun Tzu-esday (here) + Thought Pieces

I have these regular items coming out each week to map the moving landscape of markets. I will continue to enhance and improve the experience and have

some plans for how to elevate them even further beyond how they are currrently delivered.

Hints of Alpha

This is not investment advice nor is anything produced by BREAKINGWATERS but I wanted to bring your attention to some of the insights that have been delivered across the content. In some cases it can be hugely valuable.

In our conversation with William De Gale he highlighted that the Saaspocalypse may be over run, in fact these stocks may break the other way, benefitting most from AI. Although early, a sign of this is the anomaly of SaaS earnings estimates vs their YTD stock price movement:

but we should also note that the average P/E for these companies - Salesforce (CRM), Workday (WDAY), ServiceNow (NOW), Hubspot (HUBS), Atlassian (TEAM) and Adobe (ADBE), excluding the loss making Atlassian - is 54x vs NASDAQs 35.3x so still well priced.

Mikhail in our session on innovation highlighted Photonics and Memory stocks and naming Lumentum (LITE) as one of their holdings. Since the conversation, Lumentum (LITE) is up 38% and memory - represented by the Roundhill Memory ETF is up 127%.

Alyx in our session on the UK outlined some opportunities he is seeing, specifically, CMC markets, Clarkson PLC and Kistos. They have not moved which since our recent conversation but he has high conviction on these names.

SOCIALS

Phase 1 has been about laying the foundations of the content with some social media activity. We are on YouTube and Spotify with others being tentatively used.

Phase 2 plans to be far more active in its social media activity with a dedicated approach leveraging AI to deliver the right format and build engagement.

COMING SOON

On June 12th we have Dan McCrum, FT Investigative journalist joining us to talk about his book, Money Men which was our May book and details the story of the payments fraud, Wirecard. If you’re worried you don’t have enough time now to read the book then you’re in luck, there’s also a Netflix documentary, Skandal! Bringing Down Wirecard to get you up to speed.

I am in the process of lining up the next book and the author Q&A as well as the next Expert-in-Conversation speaker so watch this space. I also have a couple of really cool breakdowns coming and an analysis on SpaceX in Tuesdays Sun Tzu-esday so watch out for that.

It has been a great start to creating an amazing equity investing community where members can learn, gain insights, improve returns and ultimately enjoy their investing journey. I want to thank all those for being part of it.

Also, I am always open to thoughts, suggestions or criticism so please be encouraged to send on any you have.

Best,

Bryan

Director, BREAKINGWATERS

bryan@breakingwaters.com