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The downturn offers great opportunities, I have already bought Komerční banka and I am going to Microsoft, says Anna…

Jamie Cameron
23. 10. 2022
8 min read

In today's interview with analyst Anna Píchová, we discuss the ideal composition of the portfolio, whether Microsoft is an attractive investment, which stocks to keep an eye on, the semiconductor sector and other interesting topics, including the impact of President Biden's crackdown on China's approach to chips.

Anna Píchová

Anna Píchová is a Principal Equity Analyst at Cyrrus Investment Group (Cyrrus is an investment firm founded in 1995 that engages in securities trading and client investment management).

In the past, Anna Píchová has made no secret of her sympathies towards Microsoft $MSFT-0.2% and semiconductor companies, which will be reflected in this interview, where she will give us her opinion on the aforementioned stock and the semiconductor sector. There will also be a discussion of President Biden's action against China's approach to chip technology. Finally, we'll look at women and investing.

First, we'll briefly look at the issues arising from the limitations of the Biden administration, as that will be one part of this conversation. The Biden administration has announced sweeping limits on the sale of semiconductor technology to China, a move aimed at crippling Beijing's access to critical technologies needed for everything from supercomputers to weapons guidance.

These moves are the clearest sign yet that a dangerous standoff is increasingly playing out in the technology sphere between the world's two major superpowers, with the United States seeking to consolidate the advanced computing and semiconductor technologies that are essential to China's military and economic ambitions.

The package of restrictions issued by the Commerce Department is largely designed to slow the progress of Chinese military programs that use supercomputers to model nuclear explosions, conduct hypersonic weapons, and create advanced networks to monitor dissidents and minorities, among other activities.

  • We'll get to that later in this interview, but first we'll start with the basics on strategy, ideal portfolio composition and more 👇.

My first question is directed at your investment strategy - What strategy are you currently using? And which stocks do you currently prefer?

I haven't changed my investment strategy during this year, and there was no reason to. I have two portfolios - one for regular investments, there is no reason to change the strategy and interfere with the current setup. For the stock portfolio, I also did not change the strategy, nor did I make a switch towards "defensive" stocks. In general, I don't really like the division into value, growth, etc. But as for this year's strategy, it could be very simplistically named as "wait and see". So far I haven't made any big changes to the portfolio and I'm just keeping an eye on what's going on with the titles I've picked and considering some new purchases or buying up existing positions.

In your opinion, what should an ideal composite portfolio (in terms of stocks, bonds, cryptos, ETFs, etc.) look like? In your opinion, is it also necessary to diversify appropriately?

There is no universal portfolio, something different will be ideal for each person. It may be a kind of an over and over again saying, but everyone should have a portfolio layout according to their personal setup and their preferences. For some that will mean just stocks, for some it will mean bonds/fixed income products, for some it will mean just cryptos, for some it will mean investing in physical assets or even private equity. I recommend thinking of the portfolio as a whole, so some diversification is needed, whether between currencies, assets, or even sectors. However, the portfolio should not become a complete goulash and the investor should always have an overview of his portfolio - for some this will mean having 10 titles/tools in the portfolio, for others 30.

On your Twitter account, I found out that your favorite company is Microsoft. Why is that? Do you see the current price ($236 per share today) as attractive?

Very simple - I like Microsoft's business model, the company's long history and how they have been able to handle change in the past. Now they're proving it again with the cloud, where they're well positioned thanks to their contacts and established business relationships. After the current declines, Microsoft stock is starting to look interesting and I'm thinking about increasing my position.

I've also seen that you have a preference for the semiconductor (chip) sector - do you think it makes sense to invest in any of the companies in this sector at the moment? Do you have a favourite in this sector? Alternatively - Could the Biden administration hurt these companies in connection with China?

I'm very cautious about the semiconductor sector, it's a highly cyclical sector and right now the cycle is on a downward trajectory, which means declining revenues for companies and any investor should factor that into their analysis.

The situation between the US and China is complex and I dare not predict all the consequences at the moment. The Biden measure is a huge blow to the Chinese semiconductor sector and the impact is likely to be many times greater than the consequences of Trump's trade war. In particular, it is not only the supply of chips that has been restricted, but American engineers and designers working in China have been forced out of their jobs. At the moment, the entire semiconductor sector in China could be paralysed.

I have several favourites because, although it is one sector, it is not homogeneous - whether it is processors, FPGAs, converters, sensors, chips for automotive, industrial, etc. So to name my favorites, it's ON semi, AMD, Infineon, Wolfspeed, Texas Instruments, Marvell - for each of the companies I have different reasons why I find them interesting and what I like about their business.

Do you have a stock in your sights right now where you're just waiting to see if the market will knock it down further with the price? If so, what stock is it?

I have several stocks in my sights, mainly watching valuations and future developments. I'm looking at semiconductor companies, specifically AMD. Then on solar, and some technology stocks (CRWD, SNOW, VEEV, INTU).

Have you included any new stocks in your portfolio recently?

Most recently, I added Komerční banka shares to my portfolio. It was an increase in an existing position, the price below CZK 600 was very attractive from my point of view, even taking into account the impact of the windfall tax, which was only talked about at the time.

My last question will be from a slightly different barrel and a bit more extensive - In the Czech Republic, it is said that about 38% of Czechs invest, but recent developments on the financial markets have shown that women are better at investing, but they are generally rather underestimated. So my last questions are on the topic of women and investing. Do you feel that there are not too many women investors? Why are/can women be more successful in investing? Is it a matter of individual strategy and less risk tolerance, or is it something else entirely? Do you have a message for women who don't invest but are thinking about it?

There aren't as many women investors who are publicly known as men. There is also a lack of successful female portfolio managers managing equity funds who could be good role models, because role models are often what attract people to the industry. In general, I think women do invest (or at least I can see that from my surroundings and there may be some bias due to my social bubble). Women have investing as a means rather than a hobby, hence they don't feel the need to talk about it as much and actively seek out information or follow investment platforms.

I don't have information on whether and why women can be more successful than men in investing because I lack data. So any comment on the subject would be pure speculation, and I'd rather leave that out.

For women who are not yet investing, I have a simple message - invest and be concerned about your finances and your financial future. Beginnings can be difficult, but it is worth overcoming the initial difficulties, studying the issues and taking the time to set up a strategy. Then you just need to stick to that strategy, check it occasionally to see if it still fits your goals, and let time work.

Highlights from the interview:

  • I didn't change my investment strategy during this year, and there was no reason to. I recommend thinking of your portfolio as a whole, so some diversification is needed, whether between currencies, assets, or even sectors.
  • After the recent declines, Microsoft stock is starting to look interesting and I am thinking about increasing my position.
  • Biden's action is a huge blow to the Chinese semiconductor sector and the impact is likely to be many times greater than the consequences of Trump's trade war.
  • In the semiconductor sector, I have several favorites - ON semi, AMD, Infineon, Wolfspeed, Texas Instruments, Marvell.
  • But you can also find stocks like $CRWD+2.0%, $SNOW-1.9%, $VEEV+0.3%, $INTU+1.2% in Anna Pichova's crosshairs.

With that, I would like to thank Anna Píchová, who has given us her insight and her views on several topics today, which I appreciate, especially for her candor on her favored stocks.

Please note that this is not financial advice. Every investment must undergo a thorough analysis.

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