Source: Brokerage China Author: Qu Hongyan Recently, China Yangtze Power hit a historical high and once again showed the slow bull stock trend of "tripling in ten years". The slow bull market has left behind many passers-by and brought good returns to the steadfast investors. It is "rare for those who triple in one year to be like carp jumping over the dragon gate, while those who double in three years are few and far between." On the other end of the investment world, however, violent collapses are also deafening, with many financial products suspected of "Ponzi schemes" ceasing payments, leaving investors with no hope of recovering their investments. Both positive and negative cases illustrate the importance of forming a suitable mentality towards money in one's lifetime; otherwise, sooner or later, you will divorce yourself from your money. "I call this the money mind, a person's IQ can reach 120, 140, or even higher levels, and perhaps some people's minds are good at doing one thing, while others are good at doing another. They can do things that most ordinary people can't do. But I know some very smart people who make very foolish decisions because they lack the money mind." Buffett once said so. The so-called money mind refers to believing in common sense, believing in compound interest, being cautious and rational, thinking independently, prioritizing security over return, not dealing with people with questionable character, not easily guaranteeing for others, not believing in windfall profits, and not trying to cross legal norms for extra benefits. In today's world of ubiquitous information, everyone's wealth may become the "prey" of those with ulterior motives. Only with the money mind, can one form good behavior habits and shield oneself from separating from one's wealth. Do not entrust your wealth easily. Wealth is easy to lose but hard to accumulate, and trust is a vital reason leading to the rapid loss of wealth. "Do not allow anyone else to manage your business unless you can watch their every move closely and understand their behavior; or you have strong reasons to believe in their character and ability. For investors, this criterion determines when you can let someone else make investment decisions for you." Graham's criterion written eighty years ago is so clear. Almost all the investors who lost their wealth in the financial products have violated the above two criteria. They did not have the ability to closely supervise the whereabouts of their funds, nor did they have sufficient reasons to believe in the character of the product issuers. They easily invested their own wealth solely based on others' glib tongue and a piece of commitment paper. They did not act as gatekeepers of their own wealth and ended up with nothing left even if the government punished the wrongdoers. "An ounce of prevention is worth a pound of cure." This is a phrase Munger often says. Destiny must be in one's own hands, and investors with a suitable money mind will try their best to find suspicious points in their investments to protect the safety of their principal. For example, whether the manager is trustworthy, whether the underlying assets are profitable, whether oneself can timely monitor the risks in the investment process, and whether the sales staff is obtaining large commissions. As long as any unreliable signs are found, these investors firmly will not invest their money. Do not desire to get rich quick. As in the capital market and anywhere else, making money is not easy, and desiring to get rich quick will lead to quick loss of wealth. In the capital market, the desire to get rich quickly often leads to investors over-allocating specific stocks, industries, or assets at the worst time. For example, buying high-risk stocks that can gain huge returns once an adventure succeeds, but the chance of success is very small, also known as "whispering stocks" by legendary fund manager Peter Lynch. "They often tell investors a story with explosive effects. These 'whispering stocks' have a hypnotic effect on people, and it is easy for you to believe that the story the company tells has an emotional appeal that can easily confuse you." This is like hearing a very tempting "sizzling" sound, making you salivate, but you did not notice that there is no steak on the grill. In the eyes of investors who lack the money mind, stable yield provided by blue chips such as China Yangtze Power cannot meet their demands. However, historical experience clearly shows that buying stocks lacking in safety solely based on imagined high yields is unwise. The long-term average investment return of general stocks is 9%-10%, which is also the average investment return of stock indexes in history, a benchmark to measure one's investment performance and the benchmark to measure fund investment performance.

Author: Chen Ming.

On November 13th,$NVIDIA (NVDA.US)$CEO Jensen Huang announced at the NVIDIA Japan Summit that they will cooperate with SoftBank to build AI infrastructure in Japan, including Japan's largest AI factory. Former SoftBank Chairman and CEO Masayoshi Son stated, 'SoftBank is investing heavily in building data centers in Japan, pressing the 'restart button' for Japan's technological development. Japan cannot miss this wave of AI development, we need infrastructure.'

In addition, according to the latest news, Japan's newly appointed Prime Minister Fumio Kishida has promised to provide ¥10 trillion (about ¥470 billion RMB) in new support for Japan's semiconductor and AI industries to keep up with the global investment trend in cutting-edge technology.

According to a draft plan, the new funding framework, separate from the previously valued at about ¥4 trillion special fund, will be included in an upcoming stimulus plan aimed at generating around ¥160 trillion in economic benefits.

However, in the capital markets, affected by the collective adjustment of US chip stocks, today (Wednesday), Japanese chip stocks declined, as of the time of writing.$Lasertec (6920.JP)$It fell more than 2%.$Advantest (6857.JP)$and $Tokyo Electron Device (2760.JP)$ fell by 1.41% and 0.48% respectively, while $SoftBank (9434.JP)$ once surged more than 1%.

Nvidia is cooperating with SoftBank.

On November 13, Nvidia CEO Huang Renxun announced at the Nvidia Japan Summit that they will partner with SoftBank to build AI infrastructure in Japan, including Japan's largest AI factory.

$SoftBank Group (9984.JP)$Founder Masayoshi Son said, "SoftBank is investing heavily in data center construction in Japan, pressing the 'restart button' on Japan's technological development. Japan cannot afford to miss this wave of AI development, we need infrastructure."

Huang Renxun stated that SoftBank is using Nvidia's Blackwell platform to build Japan's most powerful artificial intelligence supercomputer, and plans to use Nvidia's Grace Blackwell platform for its next supercomputer.

In addition, Nvidia revealed that SoftBank is using Nvidia's AI Aerial acceleration computing platform, successfully piloting the world's first combination of artificial intelligence and 5G telecommunications network, a breakthrough in the field of computing, unlocking the potential billion-dollar AI revenue stream for telecom operators.

Nvidia and SoftBank also announced that SoftBank's goal is to create an AI market for local secure AI computing needs using Nvidia's AI Enterprise software. This new service supporting AI training and edge AI reasoning positions SoftBank as Japan's AI grid, creating new business opportunities for various industries, consumers, and businesses nationwide.

SoftBank President and CEO Junichi Miyakawa stated: "Countries and regions worldwide are accelerating the adoption of AI to promote social and economic growth, and society is undergoing a major transformation. Through our long-term partnership with Nvidia, SoftBank is leading this transformation. With our extremely powerful AI infrastructure and our new distributed AI-RAN solution 'AITRAS' reshaping 5G networks for AI, we will accelerate innovation nationwide and worldwide."

It is reported that SoftBank will receive the world's first NVIDIA DGX™️ B200 system, which will serve as the building block for its new NVIDIA DGX SuperPOD™️ supercomputer. SoftBank plans to use its Blackwell-based DGX SuperPOD for its own generative ai development and ai-related businesses, as well as universities, research institutions, and companies across Japan.

In addition to the DGX SuperPOD, SoftBank also plans to build another NVIDIA-accelerated supercomputer to run extremely compute-intensive workloads. The preliminary plan for this supercomputer is based on the NVIDIA Grace Blackwell platform design, which features NVIDIA GB200 NVL72 multi-node, liquid-cooled, rack-level systems combining NVIDIA Blackwell GPU with energy-efficient NVIDIA Grace™️ CPU based on Arm.

Heavy Investment in Japan

On the evening of November 11th local time, Japan's newly appointed Prime Minister Shigeru Ishiba announced an ambitious investment plan. Ishiba proposed that the Japanese government will provide at least 10 trillion yen in funding support by the fiscal year 2030 to drive the semiconductor and ai industries.

During the press conference that evening, Ishiba stated: "We will establish a new assistance framework in the hope of attracting over 50 trillion yen of public and private investments in the next 10 years." This plan will be included in the comprehensive economic package announced in November, providing subsidies, government agency investments, and loan guarantees to private sector financial conglomerates. Ishiba emphasized that the government will not issue 'deficit-covering bonds' to fund this initiative.

According to a comprehensive plan draft obtained by the media, the new funding framework will be separate from the previous special fund of about 4 trillion yen and will be outlined in the upcoming economic stimulus package, aiming to generate approximately 160 trillion yen of economic impact.

The special fund of 4 trillion yen was proposed by the cabinet led by former Japanese Prime Minister Fumio Kishida, with a budget aimed at revitalizing the chip industry, including allocating 920 billion yen to the local chip company Rapidus, which aims to mass-produce advanced logic chips by 2027. The usage scope of the newly announced 10 trillion yen of additional funds is even broader, aiming to help Japan narrow the gap with major global chip-supporting countries.

Currently, countries are competing to invest more in ai-driven semiconductor capabilities, with policymakers now seeing this area as crucial for economic security. For example, U.S. President Biden's '2022 Chips and Science Act' promises a total of $39 billion in grants to chip manufacturers, along with $75 billion in loans and guarantees, plus up to 25% tax credits.

Based on the need to promote economic growth, the Japanese government is also increasing its support for the industry. According to the above plan, in the next 10 years, global demand for chips is expected to double to 150 trillion yen. This framework aims to provide over 10 trillion yen in public aid through outsourcing, financial support, and legislative measures to enhance the predictability of private companies. From the perspective of economic security, the Japanese government believes it is necessary to establish the most advanced technology in the semiconductor field. If subsidies are gradually invested on an annual basis, predictability is low, so it will be changed to planned support over multiple years.

Japanese Minister of Economy, Trade and Industry Yoji Muto said on Tuesday that the Japanese government will not raise taxes to fund the new framework, adding that details are still being finalized. Shigeru Ishiba pointed out that he will discuss the financing issues of the plan with various departments, but he will not use deficit financing bonds as the source of funding for these measures.

SoftBank accelerates layout in AI.

On November 12, SoftBank announced the financial results for the second quarter of the 2024 fiscal year ending September and the first half of the year. The data shows that SoftBank's revenue in the first half of the year increased by 7% year-on-year to 3.15 trillion yen, achieving a net income of 1.18 trillion yen, far exceeding the market's expected 295 billion yen. SoftBank's Vision Fund reversed losses to profits in the second quarter, with a profit of 373 billion yen, mainly driven by the IPO boom in India.

Currently, SoftBank Group's founder Masayoshi Son is aggressively venturing into investments in artificial intelligence and semiconductors. Son is raising funds for the foray into artificial intelligence and related hardware by selling assets from the Vision Fund investment portfolio. In May of this year, the company announced a $9 billion annual artificial intelligence investment plan.

Although Son had hinted at the possibility of launching a new series of Vision Funds, the likelihood of launching a third or fourth fund no longer exists. Instead, SoftBank's current investments are mostly carefully planned by holding companies, bypassing the Vision Fund. Son's new pursuits are partly inspired by the success of Arm, whose market cap has soared to around $150 billion since going public last year, with SoftBank holding 90% of the company shares.

Recently, SoftBank contributed $0.5 billion to OpenAI's fundraising. In June, SoftBank Group's Vision Fund 2 announced an investment in the US artificial intelligence startup Perplexity AI. In addition, chip design company Graphcore, acquired by SoftBank Group, is adding 75 new job positions globally, with a 20% increase in staff, highlighting SoftBank's ambition in the semiconductor industry. The new positions announced by Graphcore cover silicon design and data center engineering.

At the end of October, Masayoshi Son stated in a media interview that the trend of continued spending in the field of artificial intelligence over the coming years will only accelerate. This will benefit Nvidia and its GPU chip business, which has been a major driving force behind most of the progress in artificial intelligence. 'I think Nvidia is undervalued because the future (of artificial intelligence) is much broader,' Son said at the Saudi Future Investment Initiative summit. Son's optimism about artificial intelligence stems from his belief that 'super artificial intelligence' will be achieved by 2035.

Artificial intelligence is widely seen as artificial intelligence systems that are as smart as humans, while Son Zongyi defines super artificial intelligence as artificial intelligence systems that are 10,000 times more powerful than the human brain. Son Zongyi said that to achieve this level of artificial intelligence, companies will need over 0.2 billion gpu chips and invest a total capital expenditure of 9 trillion dollars.

Son Zongyi said that considering the potential huge profits that super artificial intelligence may bring, this could be a worthwhile trade. "I think this is still a very reasonable capital expenditure. 9 trillion dollars is not too much, it might be too little," he said. Son Zongyi also said that if super artificial intelligence replaces 5% of GDP within 10 years, it could potentially bring in profits of up to 4 trillion dollars per year.

Editor/Rocky