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According to Warren Buffett, a crucial aspect of identifying superior investments involves seeking out companies with sustainable competitive advantages, often described as having "wide economic moats.".

“A truly great business must have an enduring “moat” that protects excellent returns on invested capital. The dynamics of capitalism guarantee that competitors will repeatedly assault any business “castle” that is earning high returns. Therefore, a formidable barrier such as a company being a low-cost producer (GEICO, Costco) or possessing a powerful world-wide brand (Coca-Cola, Gillette, American Express) is essential for sustained success.”

Within the vast expanse of the financial landscape, the MOAT Investment Fund curated by RIOT Investment Society emerges as a beacon of strategic investing, a portfolio of 33 companies, with sustainable competitive advantages.In this article we will explore how the fund performed in the first 4 months of 2024.







In 2023, Maire Tecnimont experienced remarkable growth across its financial metrics:

Revenue surged to €4.3 billion, exceeding guidance by 23.0%. EBITDA grew notably by 31.1% to €274.4 million, supported by improved margins from Sustainable Technology Solutions. Net income soared to €129.5 million, marking a remarkable 43.3% increase. Adjusted net availability rose to €337.9 million, driven by strong operational cash generation. The company secured new orders worth €11.2 billion, resulting in a solid backlog of €15.0 billion. Moreover, Maire Tecnimont increased its dividend by 59% to €0.197 per share, raising the payout from 45% to 50%.

Looking forward to 2024, Maire Tecnimont anticipates robust growth:

Revenue is forecasted to range between €5.7 billion and €6.1 billion, representing a 30-40% increase and achieving the level forecasted in the 2023-2032 Strategic Plan four years ahead of schedule. EBITDA is expected to range between €360 million and €405 million, reflecting a 30-45% increase. Capex is projected to be between €140 million and €170 million, primarily allocated to technological portfolio expansion. Adjusted net availability is anticipated to rise compared to December 31, 2023.


With NVO set to report its FQ1'24 earnings call on May 02, 2024, readers want to pay attention to its sales and Free Cash Flow generation.

This is because the management has previously guided FY2024 revenue growth of between +18% and +26% YoY.This is on top of the management's new share repurchase program of up to DKK 20B in FY2024 (-33.3% YoY), implying the management's confidence of generating robust cash flow while maintaining its shareholder returns, despite the intensified capex projections of DKK 45B (+80% YoY).

For now, the market has priced in FQ1 '24 sales of $9.11B (-4.6% QoQ/ +15.4% YoY) and adjusted EPS of $0.77 (+8.4% QoQ/ +18.4% YoY).

The YoY double digit growths are not overly aggressive indeed, with the ongoing shortage through Q2 '24 implying the immense demand for weight loss therapies in general, naturally triggering the rising prescription prices.



China stocks have gained momentum as market players scurry to avoid missing rallies driven by supportive policies, analysts say, while cautioning that the upswing does not yet reflect a return of long-term investors. A series of measures announced since mid-April to support the mainland and Hong Kong stock markets are playing a key role.

China's securities watchdog, in once-a-decade market policy guidelines issued earlier this month, said China wants to improve listing company quality and enhance shareholder returns. The same regulator also announced separate measures to prop up the Hong Kong market, including efforts to increase the types of products available via the Connect scheme. Overseas traders bought a total of 6.02 billion yuan (US$831 million) of yuan-traded shares through the cross-border Stock Connect programs with Hong Kong, adding to net buying of 82.7 billion yuan during the previous two months, according to Bloomberg data. The three consecutive months of inflows are the longest streak of foreign buying in a year, the data shows.





Kering SA shares tumbled after the French luxury group warned that sales at Gucci, its biggest brand, have fallen about 20 percent in the first quarter.

The Gucci sales slump, owing to a steeper-than-expected decline in the Asia-Pacific region, widens the gap between the company and its stronger rivals. The fashion group has been trying to revitalize Gucci, the Italian label that accounts for about two-thirds of profit, without success. Its biggest label is suffering from “being amid a major design and management transition. With a recovery in China slow to materialize, luxury companies have grown more dependent on the US. That’s bad news for Gucci, which is particularly exposed to the Asian market. Sales at star brands dropped 21%.

This is not a problem for us, brands like Gucci are cyclical, and with a certain level of confidence, we know that they will be able to recover in the coming years. Furthermore, the 5% dividend yield is very interesting, with a good payout ratio. Therefore, we will increase our position in Kering in the future.


Apple stock has underperformed the market this year as investor worry escalates. In 2024, Apple's shares experienced a 14% decline. Apple’s significant sales contribution from China, approximately $72.6 billion out of $383.3 billion in 2023, highlights its over-reliance on the country, especially given China's economic challenges and increased competition from lower-priced rivals. Analysts anticipate a slight decrease in sales to around $68.76 billion for 2024 in the region.

Moreover, while many tech companies have disclosed plans regarding generative AI, Apple has remained relatively silent on this front, causing investor concern. Despite this, we remain attracted to Apple's strong competitive position and we will increase our position in the company if its shares drop below $130.


A Review of the American Market in these first 4 months of 2024


This period proved to be of significant fluctuation for the American stock market. While the overall trend leaned positive, several major news events caused periods of both bullish and bearish sentiment. Let's delve into the key factors that shaped the market's performance.



New all-time high


The S&P 500 closed on the 30th of April at a valuation of 5024, hitting the new top on the 1st 19th surpassing 4819 points and setting it on the 1st of April at 5276. 

Most of the gains have been made by just five of the “Magnificent 7”, in fact Apple and Tesla are no longer training the index but dragging it down. However, the considerable impact they all have on the index hasn’t stopped at all, in fact they make up over 30% of the components.

With the Mag 7 contribution excluded, the index's Q1 earnings in 2024 would have decreased by 3.5% compared to the same period last year (as opposed to growing by +2.2% in the other case).



Some positive inputs


The year started off feeling cautiously optimistic. The American economy persisted in its post-pandemic recuperation, exhibiting favourable growth in employment figures and a progressive decline in inflation. The major indices got off to a great start thanks to the strengthening of investor confidence by these encouraging economic data. Further improving market sentiment was the fact that numerous big businesses revealed higher-than-expected earnings for the last quarter of 2023. This impressive corporate performance demonstrated the perseverance of American companies and their aptitude for overcoming current global challenges. Therefore, a short-term reduction in interest rates is expected.


Geopolitical Tensions and Supply Chain Disruptions


Nevertheless, rising geopolitical tensions halted the encouraging trend. Due to worries regarding a protracted conflict and its effect on energy prices, the ongoing conflict between Russia and Ukraine has continued to cast a shadow over the world economy. The investors withdrew from riskier assets during this period of market volatility due to uncertainty. Furthermore, the ongoing Israeli-Palestinian conflict made people even more fearful of what lay ahead. These elements worked together to reduce investor fervour and trigger a small market correction started in April.


Market Recovery and Looking Ahead

The US market showed some resilience in spite of these difficulties. The market recovered some of its earlier losses as time went on, suggesting that investors were adjusting to the new economic reality. A renewed emphasis on corporate earnings was evident in the latter half of the last month, as several important industries, including energy and communications services, delivered some much-needed positive reinforcement.

In summary, the American stock market saw conflicting signals during this first period of 2024. While times of volatility were largely caused by supply chain disruptions, fear of interest rate moves, and geopolitical tensions, optimism was also bolstered by the economic recovery and strong corporate earnings. To understand the direction of the American market as we head into, it will be imperative to keep an eye on the ongoing geopolitical situation, the Fed's monetary policy decisions, and the state of the global economy.




Our “All weather” portfolio performed very well in the period under review, from October 2023 to April 2024.


This return is attributable to the growth of all four asset classes within the portfolio:

●       The US stock market reached all-time highs before experiencing a slight correction of a few percentage points.

●       Gold also rose to high levels. This is due to the global geopolitical situation characterized by great instability due to wars such as the war in Ukraine and the war in Gaza.

●       Finally, the bond component of the portfolio also grew in line with expectations of interest rate cuts. Central banks have in fact implemented rate hikes since 2022, which have led to a significant decline in the value of bond funds, especially those with long maturities. Market operators, observing macroeconomic data that signal a cooling of inflation, are convinced that interest rates will be lowered soon. The portfolio will benefit greatly from these movements given the significant presence of long-term bonds, which are more sensitive to interest rate movements.




CME FedWatch: Decoding Market Expectations of Interest Rate Changes


The CME FedWatch is a crucial tool for investors and analysts seeking to grasp market expectations regarding future interest rate movements. By analyzing the prices of Fed Funds futures contracts, which essentially wager on the future federal funds rate, the CME FedWatch translates these prices into probabilities of rate changes, providing valuable insights into market sentiment.


Interpreting the Image: Anticipated Fed Rate Moves


The provided image depicts the probability of the Federal Reserve altering the federal funds rate at upcoming FOMC (Federal Open Market Committee) meetings. Based on the image's analysis, it is highly likely that the US central bank will maintain interest rates at 5.25%-5.50%, with a strong likelihood of these rates persisting throughout the summer, carrying a probability of around 65.1%. However, towards early September, while the event probabilities are not significant, a decrease in interest rates to 5.00%-5.25% is anticipated.


Interest rate cuts?


The much-desired "soft landing" seems to be on the horizon? On March 31st   even though both the labour market and inflation were favourable for the Fed. The Federal Reserve Chairman Jerome Powell warned on April 16th that persistently high inflation is likely to delay any Fed interest rate cuts until the end of the year, opening the door to a period of higher rates for longer.

We don't worry much about that; our 40% in cash allows us to hedge in case of a market downturn. Meanwhile, we'll continue to buy good businesses, and if there's a descent, we'll increase our holdings at a discounted price.



“You get recessions, you have stock market declines. If you don’t understand that’s going to happen, then you’re not ready, you won’t do well in the markets.” 


Peter Lynch



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