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Brian Krawez on Bloomberg Daybreak Asia

June 9, 2024

Where can investors turn for attractive investment opportunities in AI outside of Nvidia? “We believe Oracle is a cheaper way to play AI,” said Brian Krawez, CFA, president and lead portfolio manager at Scharf Investments. He recently spoke with Doug Krizner on Bloomberg’s “Daybreak Asia” program and shared his thoughts on Oracle ahead of its earnings release and forecast for double-digit revenue growth. “I’m not sure when the fever will break in terms of the AI trade.” Brian also discussed the Fed, interest rates, and the potential for value stocks in this higher-for-longer interest rate environment. He also sees compelling investment opportunities outside the U.S., including Samsung. “Samsung is one of the largest tech companies by revenue and is a stealth way to play AI.” You can hear Brian's interview beginning at the 22:50 mark in the link below.

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Eric Lynch on Schwab Network

June 6, 2024

We saw a nexus shift with the consumer in Q1 from discretionary to non-discretionary spending. “Bigger names such as Walmart and Costco are doing well, and others like Target and smaller discount retailers are being impacted,” said Eric Lynch, managing director at Scharf Investments, on a recent appearance on Schwab Network’s “Morning Trade Live” program with Oliver Renick ahead of Five Below’s earnings report. Eric discussed the current state of the consumer and discount retailers, and reviewed the typical retail growth flywheel and how discounters such as Five Below are feeling under pressure.

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Lynch: “Is the Fed even driving the bus?”

May 31, 2024

After many rate hikes and keeping rates high in the hopes that inflation will come down, the Fed seems stuck on what it can do to reduce inflation to its 2% target. “Is the Fed even driving the bus,” said Eric Lynch, managing director at Scharf Investments during a recent appearance on Reuters TV. The Fed seems to believe that it can control inflation with monetary policy, but “monetary policy doesn’t control all inflationary pressures.” With headwinds such as trade wars, fiscal debt/deficits, and global conflicts, we don’t believe that the Fed can rely on monetary policy alone. Eric also shared his take on what’s moving markets lower and the downside to having such a large concentration in tech.

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Brian Krawez on Reuters TV

May 28, 2024

Nvidia isn’t the only way for investors to get in on AI mania. “We think there are a lot of sneaky ways to play AI,” said Brian Krawez, president and lead portfolio manager at Scharf Investments. He recently appeared on Reuters TV’s “Market Insight” program and shared his thoughts on AI mania and how it is reminiscent of the tech bubble in 1999. More than 40% of the S&P 500 today is made up of tech and tech-like companies—more than at the peak of the tech bubble 25 years ago—so investors need to be wary of overexposure to the tech sector. With valuations in mega-cap tech names as high as they are now, we believe investors should look at other ways to get in on AI through companies such as Samsung and Oracle. Brian also shared his thoughts on recent retail earnings and consumer demand, and reiterated a key theme for 2024—the revenge of the average stock.

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Lynch: “Semis are great until they aren’t”

May 21, 2024

Nvidia reported earnings after the bell yesterday and they exceeded expectations. “We’re expecting to see another strong quarter as the trend has been stratospheric, but guidance for next quarter will really tell the story,” said Eric Lynch, managing director at Scharf Investments during a recent appearance on Reuters TV. Q2 guidance came in stronger than consensus forecast, but Nvidia is at a tipping point as it moves from development and production to real-life use cases. “Semis are great until they aren’t,” said Lynch as Nvidia will probably follow a similar boom/bust cycle that tech names have historically experienced.

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