Sep 9, 2023
Happy Saturday! Here are the top questions from Ask Titan Anything this week. As always, reach out to us if you have any questions.
Q: Considering Nvidia has been on an upward tear this year (200+ %)* why did it take so long for Titan add to the Flagship portfolio?
Super fair question—we were patient because prior to F1Q, x a we could not possibly underwrite the fundamentals that NVDA now shows it is tracking to. As a fiduciary, we are held to the highest standards in the industry and we did not immediately pull the trigger because we wanted to do additional research to get a better understanding of both the demand and supply side to the revenue equation. Both F1Q and F2Q earnings results emphasized the reality that accelerated computing and AI have hit fast and furious. As a result, NVDA has seen a corresponding massive increase in demand. Our thesis after Q1 was proven right in Q2, giving us the conviction to initiate a position now. We think it's important to remember, a stock does not know where it has come from or when you bought it. Thus, despite the incredible YTD move, we continue to believe there is long-term value in owning NVDA shares at this price. We are firmly in the camp that we have reached the inflection point of a new computing paradigm and that the era of accelerated computing is here to stay.
Q: TLDR, how is the team feeling about the actively managed strategies overall?
Overall, we've had a strong earnings season with great results from our portfolio companies. The common theme this month was a strong rebound in the energy sector, driving outperformance across all three portfolios. As of month end, Flagship and Offshore outperformed benchmarks. We also had a great month of generating alpha in our Opportunities strategy. While we still have a bit more work to do here, we're feeling optimistic on the whole and well-positioned across all portfolios.
Q: Why do folks buy CDs versus buying GABXX directly/investing in Titan Smart Cash?
Fair feedback. We have to think that CDs have often been the preferred choice of distribution for banks and other financial firms. Consumers are 'used' to the structure and are happy to give up liquidity for a little extra yield. With the advent of technology, it's fair to say CDs are a bit outdated as cash equivalents can be constructed with all the same bells and whistles but not be locked up for months/years. We like to think the illiquidity associated with CDs makes them a bit off-putting and we agree that using something like Smart Cash could be a more efficient way to allocate capital. There's big business in CDs but it's not for us and we think we can do better for our clients.
*NVDA year-to-date price change as of 9/7/2023
At the time of this writing, AMD is a holding in Flagship and SAFRY is a holding in Offshore.
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