Rosenberg Research: The investor's guide to AI - and how to profit from its next chapter
In this Special Report, we identify and wade through the far-reaching impacts that Artificial Intelligence (A.I.) will exert across the overall economy, a wide swath of industries, and various asset classes. As well, we discuss investing opportunities and potential risks. An appendix on A.I. models, technologies, and infrastructure is included at the end for interested readers. There are, indeed, many risks to contemplate. But so long as they can be identified, they won't end up falling in the Rumsfeldian bucket of 'unknown unknowns' — rather, they become calculated risks that can be priced out before any investment decisions are made. Risks must always be calculated, not avoided — especially in the realm of generative A.I. with all its complexities and ramifications across the markets, economy, and society at large. This is otherwise known as risk management, and that is a key aspect addressed in this report. Knowledge, after all, is power, and this report serves as a guide for making educated and well-informed decisions. Yet, as extensive as it is, the topics covered are by no means exhaustive, and we welcome any thoughts or suggestions from our readership regarding further development of the storyline. Overall, it appears to be full steam ahead for investors with long time horizons. With 'The Next Generation' being the central thesis, how apropos to quote the great Captain Picard: 'Engage!' Those investors who missed out on the first chapter of this A.I. story will be comforted to know that many more chapters are on the way, and they can look forward to more significant opportunities ahead. The multiplier effects from the steam engine, the cotton gin, the railway, electricity, automobiles, and the internet lasted many years and spawned numerous profitable investments.
Read the full report here.
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Globe and Mail
8 hours ago
- Globe and Mail
Taiwan Semiconductor Just Threw Cold Water on Tariff Concerns
Key Points Taiwan Semiconductor's products remain in high demand among end users. TSMC is building plants in the U.S. to avoid tariffs. 10 stocks we like better than Taiwan Semiconductor Manufacturing › Tariff effects are still front and center in many investors' minds. As we approach Aug. 1, the date when many reciprocal tariffs take effect, the entire economic landscape could shift. Although deals are being announced, many questions remain regarding their impact. However, there is one company that stands out by saying it hasn't seen any effect: Taiwan Semiconductor (NYSE: TSM). Taiwan Semiconductor's CEO C.C. Wei stated on its Q2 conference call that they "have not seen any change in our customers' behavior so far" regarding tariffs. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » This is a significant development for TSMC, but does it suggest that the rest of the market is overreacting to tariffs? Semiconductors aren't subject to reciprocal tariffs There are a few key points to understand regarding tariffs and semiconductors. First, semiconductors are currently exempt from all reciprocal tariffs. Additionally, they're excluded from the base 10% blanket tariff. However, that could shift as the Aug. 1 reciprocal tariff date arrives. If those tariffs are implemented, other goods could be subject to higher tariff rates than semiconductors. This means investors need to be cautious about drawing conclusions about how tariffs are being applied to one industry versus another. Still, it shows that the end users of products with their chips in them aren't slowing down purchases. A second critical factor is Taiwan Semiconductor's unique position within the chip industry. There aren't many choices when it comes to chip foundries with high-end technology. Intel (NASDAQ: INTC) has failed to launch many of the cutting-edge chip nodes, and low chip yields have plagued Samsung. This leaves TSMC at the top of the high-end semiconductor fabrication pyramid, making it a critical partner for tech giants like Nvidia (NASDAQ: NVDA) and Apple (NASDAQ: AAPL). As a result, these companies are somewhat compelled to deal with the tariffs rather than seeking an alternative. But this is only temporary. TSMC is working to avoid tariffs by accelerating the build-out of its U.S. chip production facilities in Arizona. This will allow U.S. clients to avoid any tariffs on foreign goods. While Taiwan Semiconductor may not be experiencing any effects from tariffs, investors need to be cautious about drawing conclusions from its experience to the broader market. It's in a unique position that essentially requires its clients to deal with any tariff levies that come up, but it's actively working on increasing U.S. chip production capabilities to sidestep any tariffs. With TSMC's strong position, the company also becomes an intriguing stock to consider, as few companies hold a more powerful position than TSMC. Taiwan Semiconductor looks like an excellent buy at these prices Taiwan Semiconductor's bull case is fairly straightforward: Its clients will use more chips and increasingly advanced chips over the next few years. This seems like a no-brainer investment thesis, and management's bold five-year growth projections back it up. Starting with 2025, management projects that AI-related revenue will grow at a 45% compound annual growth rate (CAGR) over the next five years, with total revenue increasing at nearly a 20% CAGR. That's easily market-beating growth, yet Taiwan Semiconductor's stock trades at nearly a market-average forward price-to-earnings (P/E) ratio. TSM PE Ratio (Forward) data by YCharts Taiwan Semiconductor's 24 times forward earnings is nearly identical to the S&P 500 's (SNPINDEX: ^GSPC) 23.8 times forward earnings. However, with market-beating growth expected, this makes the price well worth paying, and I think Taiwan Semiconductor's stock looks like a great buy right now due to its projected growth, reasonable price, and strong position in the chip fabrication industry. Should you invest $1,000 in Taiwan Semiconductor Manufacturing right now? Before you buy stock in Taiwan Semiconductor Manufacturing, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Taiwan Semiconductor Manufacturing wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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Globe and Mail
8 hours ago
- Globe and Mail
3 Vanguard ETFs That Can Turn $500 per Month Into Over $1 Million
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And Vanguard offers some of the most attractive ETFs around. Here are three Vanguard ETFs that can turn $500 per month into over $1 million. 1. Vanguard S&P 500 ETF I think the easiest choice to amass a $1 million fortune is the Vanguard S&P 500 ETF (NYSEMKT: VOO). As its name indicates, this ETF aims to track the performance of the S&P 500 (SNPINDEX: ^GSPC), which includes the 500 largest U.S. companies. Over the long run, the S&P 500 has delivered an average annual total return (with dividends reinvested) of around 10%. If you invested $500 per month and achieved that return, you'd have nearly $1.09 million at the end of 30 years. At the end of 40 years, your portfolio would be worth more than $2.9 million. These amounts, by the way, assume that you invest in a tax-advantaged account, such as an individual retirement account (IRA), and don't pull any money out along the way. Granted, the Vanguard S&P 500 ETF hasn't been around for 30 or 40 years. Vanguard launched the fund in September 2010. Since its inception, the ETF has delivered an average annual total return of 13.6%. If you were able to make this higher return, your $500 per month would grow to over $1 million in only 24 years. After 30 years, you'd amass a fortune of over $2.2 million. There's no guarantee that the Vanguard S&P 500 ETF will generate an average return of 13.6% -- or even 10%. However, those returns are certainly possible. One of the advantages of the S&P 500 is that it regularly replaces laggards with rising stars. It's also weighted by market cap, which means the stocks that grow the most affect the index's performance the most. 2. Vanguard S&P 500 Growth ETF If the S&P 500 can achieve 10% returns over the long term, it stands to reason that the fastest-growing stocks in the index could deliver even greater returns. That's the premise behind the Vanguard S&P 500 Growth ETF (NYSEMKT: VOOG). This Vanguard ETF focuses only on growth stocks in the S&P 500. It currently owns 212 stocks, instead of the 505 stocks in the Vanguard S&P 500 ETF (this number is greater than 500 because some companies have multiple classes of shares). Since its inception in September 2010, the Vanguard S&P 500 Growth ETF has generated an average annual return of 16.4%. If you were able to obtain this return and invested $500 per month, your money would grow to a little over $4 million in 30 years. You'd have $1 million within 22 years. Can the Vanguard S&P 500 Growth ETF continue to deliver such a lofty return over the next several decades? Probably not. However, I think this fund could nonetheless turn $500 per month into over $1 million for those who begin investing at an early age. 3. Vanguard Russell 1000 Growth ETF Let's expand our horizons somewhat. What if, instead of limiting ourselves to the growth stocks in the S&P 500, we invested in growth stocks in an index that held more stocks? The Vanguard Russell 1000 Growth ETF (NASDAQ: VONG) could be just the ticket. This ETF attempts to track the performance of growth stocks in the Russell 1000 index. Whereas the S&P 500 owns shares of the 500 largest U.S. companies, the Russell 1000 owns shares of the largest 1,000 companies. The Vanguard Russell 1000 Growth ETF's portfolio currently includes 387 stocks. Like the other two ETFs on our list, this Vanguard ETF began trading in September 2010. Since its inception, the fund has generated an average annual return of 16.9%. That makes it the best-performing ETF in the Vanguard family. How long would it take to make $1 million investing $500 per month at that return? Less than 21 years. If you kept socking away money for 30 years, you'd have nearly $4.5 million. Again, there's no way to know for sure whether the Vanguard Russell 1000 Growth ETF will provide such a sky-high return over the long term. I wouldn't count on it. 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National Post
8 hours ago
- National Post
Michael Taube: No, Globe and Mail, Mark Carney isn't the second coming of Brian Mulroney
Mark Carney has been prime minister of Canada since March. He's been called many things by many people in this short time period. It never came to mind that he would be described as a 'progressive conservative' along the lines of Brian Mulroney. Article content This, in a nutshell, is the nonsense that the Globe and Mail's editorial board is currently peddling. Article content Article content 'That Mr. Carney was going to drag the Liberal Party back to the centre after years of an NDP-lite government under Mr. Trudeau was to be expected,' a June 28 Globe editorial noted. 'But more than mannerisms have changed. Since April, the Prime Minister has cut personal income taxes, boosted defence spending dramatically, pledged to cut the cost of the federal bureaucracy, tightened immigration rules, eliminated federal barriers to internal trade, created a framework for breaking the stasis on big national projects and signaled that he will dismiss underperforming top bureaucrats,' they wrote. Article content Article content The Globe's editorial board suggested 'that's an agenda that Brian Mulroney could have endorsed.' Article content Article content This analysis likely raised a few eyebrows, and not just in the Mulroney household. Alas, the editorial writers then flipped their collective wig with this bizarre assessment. 'In fact, it overlaps a good deal with the actual governing record of his Progressive Conservatives. Mr. Carney is a Liberal but, in the early going, he looks to be governing much like a Red Tory — a progressive kind of conservative.' Article content We shouldn't be surprised by the Globe's over-the-top analysis of Carney's leadership. It's become the raison d'être of this once-venerable publication to carry water for this particular prime minister. Article content Nevertheless, let's be serious about our national leader. Carney is certainly a progressive, but he's no 'progressive conservative' in any way, shape or form. Article content Left-leaning progressive conservatives, or Red Tories, generally combine two ideological components: classical conservative sensibilities (espoused by High Tories like philosopher Edmund Burke and former U.K. prime minister Benjamin Disraeli) and socialist-type policies such as government intrusion and developing a social safety net. Article content Article content As Gad Horowitz, a professor emeritus at the University of Toronto, wrote in the May-June 1965 issue of the defunct left-wing magazine Canadian Dimension, 'socialism has more in common with Toryism than with liberalism, for liberalism is possessive individualism, while socialism and Toryism are variants of collectivism.' Article content Article content Modern conservatism has little in common with classical conservatism. The former has largely incorporated classical liberal and libertarian ideals into its main ideology, while maintaining a smattering of social conservative principles related to individuals and families. That's why modern conservatives typically champion small government, lower taxes, free markets, private enterprise, greater individual rights and freedoms and so forth. Article content Carney doesn't fit into these conservative-leaning parameters. His progressive values do fit within the context of the modern Liberal Party of Canada. While he's not exactly the same as Trudeau, I pointed out in a March 16 National Post column that they're 'remarkably similar.' How so? In my estimation, 'they're both left-wing, pro-government intervention, distrust privatization and free markets, favour wealth redistribution, champion radical environmentalist policies, support woke ideology and political correctness — and more.' That's what today's Liberals basically stand for, and Carney's personal and political record fits like a glove.