Memory Is A Bubble, But Nvidia Protected – Jan Van Eck On Semis Surge
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What is the main topic discussed in this episode?
Well, what I would say within the AI ecosystem, Wilfred, there are bubbles, to use a word, that probably don't like that much, right? I do think that the memory specific pocket is a moment in time. You know, one hates to to call a top when something was like this. But I personally am wary about the memory stocks because in the medium or long term, they don't have quite the competitive moat I believe that Nvidia does. I think we're in what we call a crypto winter, and I don't think it's coming back. Like, I just don't think a lot of those projects and softwares will be at all interesting or alive in five or ten years from now. So the concept of blockchain and stable coins are definitely there and Bitcoin is there.
But a lot of other parts of the ecosystem are just, to me, going away. It's such a big company, SpaceX, that we're glad as ETF sponsors to have it in the public markets. As you said, the amount of money here is absolutely staggering. It's just staggering. You're talking about cumulatively hundreds of billions of dollars. It's just the waves of liquidity that are going to be sloshing through the economy, I think will, you know, they'll be positive short term for economic growth. And I think they will be absorbed.
Welcome to the Master Investor Podcast with me, Wilfred Frost, where we celebrate and learn from the success of the greatest investors, business leaders and politicians in the world, giving you, our listeners, the edge. The Master Investor Podcast is sponsored by LSEG, Interactive Brokers, the World Gold Council and BNY Investments. Please do remember the views expressed in this podcast are for general information purposes only. Nothing in the podcast constitutes a financial promotion, investment advice or a personal recommendation. More on that in the show notes. My guest today is Jan van Eck, the president, CEO, and owner of van Eck and its associated companies, leading the asset management firm and ETF giant that was originally founded by his father in 1951.
He has grown it. to the Goliath that it is today, especially in the ETF industry, with $225 billion of AUM. And he is a regular podcast participant, always sharing his opinions loud and clear, which we very much welcome here. Jan, welcome to the Master Investor Podcast. Wilfred, it's great to be here for the first time with you. I wanted to just jump straight in to the kind of ETF that I think is, it's fair to say, has really driven a lot of your performance in recent years, but is right at the center of everything in markets right now. And that is the SMH, of course, focusing on the semis, which has had unbelievable performance of late. I think I'm right in saying it's now $65 billion in AUM, is that right?
Something like that, yeah. And obviously is now the go-to place for people that want exposure to the area. Year-to-date, it's up 58%. Over 12 months, it's up 135%. Almost more impressive than that. Since inception, it's up 29% per annum. That's crazy, right? Unbelievable.
That's really hard to do on a compounding basis. You should retire right now.
Yeah, exactly. Tap out now, but I'm sure you won't, and that's why you're showing up for this podcast. But in the last year or so, how much of that is price performance versus inflows to get it to $65 billion?
Oh, a lot is price performance. I mean, I can't imagine that more than 10% or 20% in the last 12 months has been inflows.
That's interesting. I would have thought there was at least a significant more of inflows than that. And what do you think has been driving it? I mean, maybe it's a simple question, but is it the AI theme, pure and simple?
Yeah. I mean, listen, I think the VanEck investment philosophy is to try to take a big picture macro view. I call it 10-year macro. And what I mean by that is in 10 years looking back in 2036, we were going to look back and say, what are the very biggest themes affecting the world and therefore financial markets? And that hopefully filters out a lot of noise. But I think What we're left with is three things at least, AI, the rise of India, and then the overborrowing by the U.S., your country, the U.K., and Japan leading the way, I would say.
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Chapters
4 chapters
1
What is the main topic discussed in this episode?
0:00–16:52
2
How does VanEck explain SMH's recent surge and 29% annualized return?
16:52–32:22
3
Why does VanEck overweight Nvidia and what moat does Nvidia have?
32:22–50:28
4
Are memory stocks in a short-term bubble and should investors worry?
50:28–53:52
Speakers
2 identifiedMore from The Master Investor Podcast with Wilfred Frost
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