Mom, I Missed the Plane
06 February 2023
⚠️ Join us for the second edition of Canap’ de Monocle on Wednesday, February 8th at 5:30 PM (register here ) ⚠️
On January 27, we penned our thoughts about Meta after liquidating half of our position: "We maintain strong confidence in the long-term trend, but given the prevailing circumstances, we exercise prudence concerning the forthcoming results." Four days later, we closed the remaining position ahead of Snap's results.
The results proved to be underwhelming: no growth and a disheartening 15% decline in average revenue per user over the past year. This only reinforces our conviction that the advertising sector is facing challenges. Additionally, Marc Zuckerberg's investments in the Metaverse have been met with skepticism by the market, making a stock downturn appear more plausible than a rebound.
However, "Zuck" had a different plan. For 2023, the Meta CEO has decided to focus on "efficiency," which means minimizing resources for the same level of results.
Investment forecasts for the upcoming year have been lowered by $5 billion, thanks to a decrease in data center constructions. Operating costs are also being lowered by $5 billion, including lower employee expenses and lower-than-expected variable costs.
As a result, Meta's stock experienced a surge of 23% last Thursday.
We missed the plane …
Of course, we don't want to end up like Chris Columbus, who would later follow up with "Mom, I missed the plane again." However, Monocle is a heritage fund whose purpose is to preserve capital. Therefore, sometimes we have to refrain from boarding out of fear of a crash, even if it means missing out on attractive market reactions from time to time.
Market and portfolio focus
Behaviour:
Over the week (January 30-February 3), the fund remained stable. In the United States, the S&P 500 rose by 3%. After an exceptionally euphoric January in the markets, we are maintaining a cautious stance. The fund's equity exposure stands at 23%.
Lines:
Meta: We have liquidated the remaining position ahead of the results for the reasons explained above.
Have a great week,
Pierre
Disclaimer
This presentation is a promotional document. The content of this document is communicated by and is the property of Monocle Asset Management. Monocle Asset Management is a portfolio management company approved by the Autorité des Marchés Financiers under number GP-20000040 and registered with the ORIAS as an insurance broker under number 10058146. No information contained in this document should be construed as having any contractual value. This document is produced for information purposes only. The prospects mentioned are subject to change and do not constitute a commitment or a guarantee. Access to the products and services presented here may be subject to restrictions for certain persons or countries. Tax treatment depends on individual circumstances. The fund mentioned in this document (Monocle Fund SICAV) is authorized for marketing in France and possibly in other countries where the law permits. Before making any investment, it is advisable to check whether the investor is legally entitled to subscribe to the fund. The risks, costs and recommended investment period of the funds presented are described in the KIDD (key investor information documents) and the prospectus, available free of charge from Monocle Asset Management and on the website. The KIDD must be given to the subscribers before the subscription. Past performances are not a reliable indicator of future performances. Monocle Asset Management cannot be held responsible for any decision taken or not taken on the basis of information contained in this document, nor for the use that could be made by a third party. The investor may lose all or part of the amount of capital invested, as the funds are not capital guaranteed.
To unsubscribe or for any information request, you can email us at monocle@monocle.lu
