August 2023 Pricing Commentary (Audio version now available – use the controls above.) Our three ABC Funds generated positive returns during the month of August despite all major stock indices closing the month in negative territory. This outperformance was driven by a number of our common stock holdings including Amazon, Mastercard, Visa, Boston Scientific, Danaher, Thermo Fisher Scientific, Broadcom, Adobe, Autodesk, and Alphabet. Of particular importance, NVIDIA stood out as our top common stock performer, reinforcing its longstanding position as a core holding in our ABC Funds. On August 23, the company reported exceptional second quarter earnings results, authorized a $25 billion share buyback program, and delivered forward guidance that shocked Wall Street. A cornerstone of NVIDIA’s success is their groundbreaking H100 chip, a pivotal asset in the race to build out large language models and generative AI capabilities. This chip offers unparalleled computational prowess, enabling a new generation of AI-powered solutions from autonomous vehicles and advanced language models to virtual reality simulations and precision medicine. NVIDIA founder and CEO Jensen Huang said it best in the earnings press release: “A new computing era has begun. Companies worldwide are transitioning from general-purpose to accelerated computing and generative AI.” With numerous tailwinds in data center, automotive, professional visualization, and gaming, NVIDIA remains a prime ABC Funds holding. Looking ahead to 2024, while many investors have been less sanguine on the North American economy and equities, the fact is most corporate earnings results have exceeded analysts’ expectations, inflation while not eradicated is decelerating, and there is now a sense that the U.S. Federal Reserve and the Bank of Canada have become less hawkish since the beginning of the year. Furthermore, we believe that any perceptible weakness in economic activity resulting in central bank ease could spawn a deluge of common stock buying. This event could easily take place before the end of 2023 or early 2024. Consequently, we remain optimistic and fully invested as we enter the final four months of the year. Irwin A. Michael, PresidentI.A. Michael Investment Counsel Ltd.
