Libor Vasa @liborvasa: "Dear Followers, Dear Copiers, February turned..."

Czech Republic

Dear Followers, Dear Copiers, February turned out to be another difficult month for the portfolio. The overall value declined by 4.98%, and at one point — on February 22nd — the drawdown reached 7.5% before partially recovering toward the end of the month. The decline was somewhat stronger in the companies we hold than in the broader market. Much of the pressure seems to come from growing investor concerns about a potential AI bubble and increasing expectations that the enormous investments into artificial intelligence should start producing tangible returns. This has created a somewhat paradoxical situation: pressure is mounting both on companies that aim to build their future profits on AI, and on those potentially threatened by it. In some cases, the same company can fall into both categories at once — $ADBE (Adobe Systems Inc) and $IBM (International Business Machines Corporation (IBM)) are good examples. From my perspective, however, it’s clear that AI is not an empty bubble. In my own professional life, this technology is already having a significant impact, and it seems inevitable that its influence will only continue to grow in the years ahead. From an investor’s standpoint, the situation is relatively straightforward. Prices have declined, and since we still had a portion of capital held in dollars from earlier profits, this creates an opportunity to open new positions. During February I opened several trades: On February 2nd, I opened a position in $U (Unity Software Inc.) . Unfortunately, this position is currently down about 33%. Unity is generally a highly volatile stock, and part of the recent decline may be linked to new technology demonstrations suggesting that game development could move in directions different from traditional pipelines (for example Google’s Genie project). This is a topic quite close to my own field of interest, and my view is that fully AI-generated games matching the quality of today’s major titles are still quite far away. Creating a convincing visual world is one thing — building a meaningful story that players truly want to experience is something entirely different. On February 4th, I opened a position in $AMD. For me, this remains something of a high-conviction stock. Although the position is currently down around 4.15%, I have little doubt that it will return to profit over time. Finally, on February 6th, I opened a position in $AMZN (Amazon.com Inc) — a large and well-established company that may benefit greatly from AI but is not directly threatened by it. This position is already in profit. As I write this update, it’s already clear that March will likely be another challenging month. A long-simmering conflict in the Middle East has escalated into open war, and geopolitical instability is rarely good news for markets. All we can do is hope that once the conflict eventually ends, the world will emerge as a calmer and better place, where people can focus again on building companies that improve the lives of others. In the end, supporting such companies is exactly the role we investors play. Thank you for your continued trust and patience. Best regards, Libor Vasa

Not investment advice. The author may have financial interests in the mentioned instruments.