WorldlyInvest Weekly #4
Global Insurance Outlook 2025; David Einhorn Annual Letter; Quantum Computing Stocks; Are We Reliving the Dot-Com Era?; Netflix and his Biggest Quarter Ever
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Quote of the Week
Happy birthday to David Dreman!
You should have a method to know that is time to drive into the nearest bomb shelter, or better yet, evacuate from the market in an orderly fashion.
— DAVID DREMAN
ICYMI
Do you like insurance companies? Take a look at this report. The global insurance industry is poised for a period of significant transformation.
Insight of the Week
Greenlight Capital Annual Letter
Investor David Einhorn just published his annual letter. He writes about the market's volatility and the speculative nature of investments, particularly highlighting the influence of cryptocurrencies like "Fartcoin" and the implications of Donald Trump's re-election, which introduced new uncertainties into the market. It details Greenlight’s cautious investment strategy amidst these uncertainties, noting both the challenges and strategic responses to an evolving economic and political landscape, while expressing a cautious outlook for 2025 given the speculative and uncertain market conditions.
Essential Readings
Curb Your Enthusiasm
Investor David Rolfe of Wedgewood Partners published his annual letter. He reviews the strong performance of the S&P 500 in 2024, driven predominantly by the "Magnificent 7" tech stocks, highlighting a significant market concentration and the role of AI in this trend. It points out the growing disparity between these tech giants and the broader index's more modest gains, reflecting investor optimism that echoes past speculative bubbles.
The Rise and Fall ... and Rise (Again) ... of Quantum Computing Stocks
Discover the turbulent journey of quantum computing stocks, from breakthrough innovations like Alphabet's Willow chip to volatile price swings and cautious optimism for long-term growth. This in-depth analysis written by
explores the rise and fall of key players such as IonQ, Rigetti, and D-Wave, alongside expert strategies to navigate this high-stakes market.It's like 1999, but without the good vibes
examines parallels between today’s market and the dot-com bubble, unpacking high valuations in the S&P 500 and speculative bets on emerging technologies like AI and quantum computing.Weekly Term from The Satirical Dictionary of Finance
JANUARY EFFECT: The annual superstition that stocks will outperform in January, as if the calendar holds magical investing powers.
Recommended Book
Contrarian Investment Strategies: The Psychological Edge
David Dreman, a legendary value investor, delivers a masterclass in contrarian thinking in Contrarian Investment Strategies: The Psychological Edge. Drawing from decades of experience and rigorous research, he reveals why the stock market's crowd psychology often leads to irrational decisions—and how savvy investors can capitalize on it.
Stock Ideas
Netflix: Biggest Quarter Ever
reveals that Netflix shattered expectations in Q4 2024 with 19 million new subscribers, driven by global hits like Squid Game S2 and blockbuster NFL events. With ad-supported plans surging and revenue climbing, the streaming giant is cementing its dominance.Ad-Supported Growth: Over 55% of new sign-ups now choose Netflix’s ad-supported tier, signaling a shift in how the platform monetizes its audience.
Content Drives Engagement: Hits like Squid Game S2 and live NFL games fueled record sign-ups, proving that high-quality, diverse programming is essential to Netflix's strategy.
Scalable Profitability: With 302 million global members streaming 2+ hours daily, Netflix’s operating margins and ad revenue are poised for significant expansion in 2025.
Kinovo: A Microcap with 99% Recurring Revenue and High Growth Potential
writes about Kinovo, a UK-based, is a provider of mechanical, electrical, and building services. Under the leadership of CEO David Bullen, the company has strengthened its core business, improved margins, and strategically expanded its geographic presence, all while trading at an attractive valuation of 5.7x EV/EBITDA.99% of Kinovo’s visible revenue over the next three years is secured through recurring contracts, highlighting its stability. Gross margins have improved significantly, reaching 30.7% in H1 2025.
Stricter UK safety regulations and decarbonization targets are driving demand for Kinovo’s compliance and energy-efficient solutions, boosting future revenue potential.
Since 2019, CEO David Bullen has revamped the company by focusing on higher-margin businesses, exiting unprofitable ventures, and expanding strategically into new regions.
Nedap: Transforming Industries with SaaS Innovation and Growth Potential
writes a deep dive into Nedap, a Dutch tech small-cap, highlights its transition from hardware to software and its dominance in markets like healthcare, livestock management, retail, and security. With 99% customer retention in its healthcare SaaS solutions and ambitious growth in RFID retail tracking and livestock technologies, Nedap is positioned for scalable growth and profitability.Nedap’s flagship product, Ons, holds a 60% market share in elderly care and 50% in disability care, with 99% retention rates. As the system scales, margins are expected to rise significantly over the next five years.
With 35% global market share in RFID technology, Nedap’s iD Cloud platform helps brands like Adidas and Uniqlo achieve 98% inventory accuracy, driving efficiency and reducing shrinkage.
Recurring revenue now accounts for 40% of Nedap’s total income, growing at a 17% CAGR. This transition positions the company for stable, long-term growth across its diverse markets.
Thanks for including my piece!