Hello All,

This is the sixth issue of the LSMIF newsletter. Please share with your friends and family and message in the Discord to participate and share a story!

Current News and Affairs:

Janet Yellen to signal further US support for deposits at smaller banks: Treasury secretary to defend ‘decisive and forceful actions’ by regulators to avert broader crisis… To me this is having a broken leg then stubbing your toe and only focusing on the toe. Yes it hurts but it is not your only problem. (Weird analogy I Know) The point is inflation is going to runaway again and GDP growth will slump, markets will tumble and again, they are only focusing on saving banks. 2008. That is all.

Nato expects allies to agree 2% defence spending “as a minimum” – If you own Lockheed Martin, Raytheon Technologies, General Dynamics, or any defence stock, enjoy your money because these stocks are going to do well with this announcement. A little known fact about Nato defence spending agreements are that the US get a large proportion of these contracts as a standard of the agreement.

Xi Jinping invites Putin on state visit to China: I mean if this isn’t terrifying I’m not sure what is. The cosy relationship between Russia and China with their increased gold-buying, moving away from the dependency on the dollar is really pivotal in the sense of what is to come.

Google launches Bard chatbot to rival OpenAI’s ChatGPT: Tech giant seeks to make up lost ground in race to commercialise generative AI… I find this pretty exciting to be honest because when the big hitters all get involved they essentially spark an arms race and we get some very ingenious tech out of it. Watch this space closely.

Scottish Mortgage chair to step down in shake-up: McBain exits after rare public row over corporate governance… The fund owns some and seeks to buy more of this stock so this is something we should keep our eye on for sure.

UK public borrowing rises on energy support schemes: February figures of £16.7bn is higher than expected… Again, not to be that guy but 2008.

B&Q owner Kingfisher reports 20% drop in profits: They see profits falling even further this year so I might look to short this stock if I’m honest.

Fund News:

• Rebalancing Event: Thank you to all of you who turned up and to those of you who pitched your chosen stock. It was actually heartwarming to see the progress the fund has made this year! We held a poll and found that most of you agree with decisions pitched on current holdings and most of you voted for the purchase of both AstraZeneca and Unilever! So we will update you further with what price and size position we enter!

VOTING POLLS:

Below is two polls on some ERR companies chosen to be purchased and sold, please have a look and vote! This does not reflect all choices to be made, just some and is to double check decisions made in the Wednesday Meeting.

Commentaries:

• No commentaries this week, just some links to articles or sources I like to read or have read this week.

As always, thank you for your participation and attention.

Many Thanks,

LSMIF Management

Hello All,

This is the fifth issue of the LSMIF newsletter. Please share with your friends and family and message in the Discord to participate and share a story!

Current News and Affairs:

SVB Meltdown:The UK arm of SVB was sold to HSBC for £1 which is pretty hilarious. The US (main arm) is now in the process of government “bailouts” but this really begs the question, who’s next? Everyone seems to feel this is relatively contained but Credit Suisse’s stock price wobbled and a few other big bank’s have felt the pressure. Apollo, Blackstone and KKR among private capital groups eyeing SVB’s portfolio.

US consumer prices come in at 6% at tricky time for Fed amid SVB fallout: Data comes as central bank contends with broader concerns about how rising rates may have affected lenders – A rate rise follow through this week is still likely but now more risky…

ChatGPT maker OpenAi unveils new model GPT-4 – “most advanced system yet” – It is x500 times more powerful than 3.5…. They claim it exhibits “human-level performance” – It is multimodal so can accept both image and text forms and has many other apps embedded, such as Duolingo, Khan Academy and others.

SVB collapse forces rethink on interest rates and hits bank stocks: Two-year US Treasury bond yields record biggest one-day drop since 1987

Argentina’s inflation rate tops 100% for the first time in three decades!!!

Celadon becomes first UK medical cannabis group to win right to sell in Britain

Meta axes further 10,000 jobs in fresh round of cuts – strives to improve “efficiency”

China set to tighten grip over global cobalt supply as price hits 32-month low: Share of global output expected to reach 50% over next two years

UK Economy: IMF forecasts it will be the worst-performing large advanced economy this year. annual growth rates have more than halved since 2007-09. The economy is no bigger than before the pandemic and a recovery is not expected until 2026 (at the earliest) according to the BoE. Brexit slammed the brakes on UK investment. Now we are plagued by high inflation with no end in sight and a cost of living crisis amongst endless other things… We still aren’t at peak interest rates and loom in the limbo of a sizeable recession.

Credit Suisse to borrow up to $54B from Swiss central bank: Troubled lender’s shares rebound after Wednesday’s plunge of as much as -30%!

Jeremy Hunt’s giveaways in his budget announcement will have a marginal impact on UK growth, says watchdog: Office for Budget Responsibility says the country’s long-term growth prospects look no better than last November – while this free childcare and short-term budget balance seems good, it really won’t stimulate or save the economy as proposed

Fund News:

• Rebalancing Event: Thank you all so much for your attendance and participation yesterday! It was nice to see everyone turn up in smart attire and be really engaged in the presentation. I will upload pictures from the Marketing team next week!
• Next Steps: We’ve conducted our first vote of many… Please keep your eyes on Discord for the next votes and announcements where I will inform everyone of average PPS for new purchases, lot sizes, and general information.
• Management Recruitment for Next Year: As stated yesterday, we are in the process of creating an application process to recruit next year’s management. Please keep your eyes open for this!
• Looking Forward: We have another ERR for you all to do this year before certificates and we also have our last Investment Committee meeting of the year sometime next month. We will also be conducting fast-tracked trainee training for a new wave of trainee analysts in the next month.

Commentaries:

• SVB and Contagion Risks: If a few banks were so bad at managing interest rate risks and deposit outflow risk to blow up in a few hours, how do we know it won’t happen to other banks? SVB was a prime example of a bank holding a lot long-term Treasury bonds that when held to maturity, do return all the money invested plus interest but… SVB did not expect inflation and interest rate rises to go so high so fast and this caused a large loss in investment which led to them selling their investment at over a -$1.4B loss as well as having a lack of cash on hand to meet depositors withdrawal requests. This in turn led to a “bank run” where depositors withdrew their money and eventually SVB could not cope with this and did not have the funds to cover all the money. A lot of big companies like Circle and Roku held significant funds with SVB and many startups also felt pressure and the ripple effect from this meltdown. I think we are facing the prospect of an earnings recession and a “depression” in equity valuations.
• Cryptocurrency and Bitcoin: Bitcoin (as usual) has been experiencing extreme volatility but this is neither unusual or worrying to me. I still think we are in a downwards trend and the recent bank meltdowns are a sign of the magnitude of a following recession. I’d like to be wrong in this instance but in case I’m right… I have Bitcoin pricing in at $15k and below with a low target of $10k and $13.7k as my median. I will likely add a substantial position if it reaches these values and switch my options from shorts to longs. I think Bitcoin will have some slight upside essentially trading sideways in the short term but it will go back down and hopefully meet my targets. I also have to note that Circle, the company behind the USDC stable coin, hold $3.4B in funds with SVB and this led to the stable coin dropping from it $1 peg to $0.8. A -20% drop on a stable coin really brings some big questions for centralised stable coins. The cryptocurrencies I’m looking to add, and have added positions to previously, are Polygon ($MATIC), COTI ($COTI), Cardano ($ADA), Bitcoin ($BTC), and Algorand ($ALGO) – This is not financial advice, just what I’m buying or looking to. I am not a professional.
• My Picks: I either have a large position currently or seek to add some/more to: Blackstone, Gold (options and ETF), Bitcoin (options and currency), Blackrock, Bristol-Myers Squibb, PepsiCo, Unilever, Occidental Petroleum, Ecolab, Any India (Bombay Stock Exchange) ETF, Brookfield Renewable, Cobalt Long options – This is not financial advice, just what I’m buying or looking to. I am not a professional.

As always, thank you for your participation and attention.

Many Thanks,

Aymen Retibi

Chief Investment Officer, LSMIF Management

Hello All,

This is the fourth issue of the LSMIF newsletter. Please share with your friends and family and message in the Discord to participate and share a story!

Current News and Affairs:

• Inflation hits UK government pledge to build 40 new hospitals: Although this sounds awful, it’s not really surprising considering the current climate with a £2bn shortfall!
• China sets 5% growth target to drive economic recovery: Sweeping changes are brought in to further centralise power and recover rapidly from the Zero COVID Policy. Although, this marks a decline in China’s overall GDP expected growth.
• Chinese companies choose Switzerland over US and UK to raise money overseas: Political tensions with Washington and tougher accountancy standards in London discourage listings in larger markets
• US-listed tech companies face cash crunch after burning through billions from IPOs: Only 17 of 91 listed groups have reported a profit this year!
• ChatBot Character.ai valued at $1bn in Andreessen-led funding round: Pioneering tech venture capital firm makes first big foray into generative artificial intelligence sector
• Surges in UK rate expectations prompts BofE pushback: Stubbornly high US inflation has sparked a global repricing in interest rate markets
• Deluge of inflation data pushes US borrowing costs to 2007 levels: Yield on two-year Treasury note hovers near 5% as investors brace for further Fed rate rises
• US stocks edge higher despite latest economic data and dollar strengthens: US jobless claims to drop 190k lower than 195k predicted
• US adds two dozen Chinese groups to trade blacklist: Targeted companies include chipmakers accused of assisting China’s military and surveillance tech exporters
• Jay Powell warns Fed is prepared to return to bigger interest rate rises: High-stakes testimony before Senate committee comes as central bank struggles to cool US economy!
• Data shows $1 trillion in 0DTE options traded per day! 0DTEs are 0 day expiration options which are very risky. For context, the entire Nasdaq sees $200 billion in daily volume. We are now seeing x5 this in Nasdaq daily 0DTE options. Is the stock market more of a casino than a free market?

Fund News:

• SouthEastern Hedge Fund: The team submitted their strategy called “Dollar Meltdown Galore”, focused on gold, emerging markets, India, and other sectors. They are now awaiting feedback and news on where they have placed
• SMIF Competition: The team looks set to get the win this Wednesday/Thursday in York, where we look to again win the competition having been put through to the finals, where they will present in hopes for the win! Massive well done to the team! They are down to 1 of 2 finalists!

Our Team, ready to present in the SMIF Competition in York

• Rebalancing Event: The fund has a mandatory meeting 15th March 1pm-3pm in DCB2104, where we will be going through the submitted ERRs and deciding what to do with current holdings and our cash holdings.

Testimonies/ Member News:

• Inflation Commentary: Following recent revisions, core services ex-housing CPI (sticky inflation) is still over 4% annualised levels in the US and the labour market keeps adding jobs at an underlying realistic pace of 150-200k new jobs per month. The Fed will be forced to keep risk-free rates at 5% for 9-12 months, meaning the housing market and real economy must handle 7-8% borrowing rates for a long time to come. Between 2010-2020, the US barely managed to produce an average 2% real GDP growth with an average Fed Fund rate of 0.62%. It is highly unlikely a medium-term recession is avoidable. And this has dire carry-over effects for the rest of the world, including the UK.
• Matteo (CEO): Please know that the fund is in active recruitment of future analysts. However, the way in which we recruit has now changed. There will be an application process to ensure quality members are brought on to the team. We are also starting to consider more senior and the future management team for next year.
  • Two presentations were given in the last week, one in cooperation with the Business Society where 20 students participated and one to future LIBS students with an attendance of 150 students!

Matteo De Rossi (CEO) giving a presentation to 150 students.

Also, I’m still recruiting participants for my dissertation. If you’re interested in why losses are more “painful” than relative gains can be “pleasurable”, have an interest in game theory, or just generally have a spare second, please give my study a go!

As always, thank you for your participation and attention.

Many Thanks,

LSMIF Management

Hello All,

This is the first issue of the new LSMIF newsletter. Please share with your friends and family and message in the Discord to participate and share a story!

Current News and Affairs:

• The FTSE 100 hits a record high!! Peaking at over 8000! Although a recession seems to loom, the market seems to be bouncing back and this may have to do with the new CPI information that has been released.
• UK inflation (Consumer Price Index – CPI) records in at 10.1%, down 0.4% from 10.5% in December 2022. This is good news for the market and consumers but this reduction indicates that peak interest rate rises are not in yet!
• Tech stocks are back! Stocks like Microsoft, Meta, Alphabet A and so on, are back booming after recent layoffs in Silicon Valley as companies and consumers react to the slight cooling of US Inflation.
• The FED may have to keep interest rates higher for longer than previously expected, and even with this consideration raised, the S&P 500 is still performing relatively well YTD.
• Centrica profits soar to a record high of £3.3bn! This marks a +5% move in reflection of this news.

Fund News:

First ERR on 22nd Feb. This marks the first purchases and rebalancing of the portfolio marking a new stage of the fund.

In terms of Management’s timeline and plan for the fund, we have achieved a lot together compared to last year. We have incorporated new communication strategies, remodelled training and feedback for tasks, and created a more democratic style for decision making and portfolio decisions.

Member Testimony:

“Being involved in the LSMIF has been a unique experience so far. The LSMIF management team provided guidance and support to complete all training tasks and the final Equity Research Report. Since I learned how to read and analyse financial data, I was confident about managing time and information effectively.

The past four months, I had the chance to work on Lloyds Banking Group PLC profile, while I discovered the macroeconomic factors, inflation that affect the financial sector and banking industry. I feel privileged enough to join the fund and have high expectations in the investment banking sector in the future. I hope more and more students join the fund and enhance their analytical and critical capabilities.” – Athanasios Tsanaktsidis

If any of you, whether Trainee or Senior, have anything you would like to share or add to next week’s newsletter, please feel free to reach out and message Management.

As always, thank you for your effort and participation!

Many Thanks,

LSMIF Management.

Dear students,

The introduction and recrtuiment session for the LSMIF AY 2022/2023 will be at NDH0020. If you are unable to attend face to face, you can watch it live on Blackboard at this address: https://eu.bbcollab.com/guest/3bd0502494b344ba9300d44751ccbc25

I look forward to seeing you, both in person and online!

Hao Quach

Dear students,

Annually, we, the LSMIF, hold a recruitment event for those who are interested in joining the Lincoln Student Managed Investment Fund after 2 weeks of the term to ensure late comers have the opportunity to learn about this. This year, we intend to hold this session on Wednesday 26^th October 2022 from 1-2pm. This time slot is on timetable for most of you and we will hold training or meetings during the year using this time slot. This means, if you are not joining us, that is your free time.

Most of our information and announcements will be made through the LSMIF’s Discord and you are encouraged to join our digital platform by scanning the barcode in the poster. The room for the info session is DCB2104 as per the timetable but we will also make it live on Collaborate Ultra for those who are unable to come face to face. You will be informed more about this when you join us on Discord.

I hope to see you both on Discord and the info session on 26^thOctober.

Hao Quach