Member Info for 1pencil

Positive perhaps as they continued to purchase post update..

'BMW. Several other positions made important contributions as well. On the other side of the ledger, digital media company, S4 Capital, provided a drag on portfolio performance. Additionally, Canadian lumber company, Interfor, Japanese cement company, Taiheiyo Cement, U.S. insurance company, Old Republic, and Japanese auto company, Subaru, each provided very modest negative contributions to Fund performance.'

https://www.thirdave.com/tavfx-shareholder-letter

Here's the thing, taking a simple example - lets say you're a small business with a in-house marketing team, you launch a book of children's fairy tales and ask the marketing team to promote it based on the seven stories inside.

Easy thing to do is type in the first chapter or two then let your friendly LLM conjure up images, text and even video for the promotion - lets say you go live with a multi million $ campaign only for one or more large media companies to spot a resemblance to one of their characters/story-lines/plots ect..

The risk is huge, reputational damage would be off the scale, this in my view is why you need some sort of gate keeper that is not tempted to take short cuts and is creative enough to come up with their own ideas..

Just my take on things..

Its rare you see two such Goliath's come head to head, where once they were allies now arch enemies.

The two in my view cannot co-exist with Ai in its current form, it just wouldn't work (when mentioning Ai in this context its the LLM's which hoover up vast quantities of publicly available internet data).

Whilst it may not go far enough for copyright owners it does offer a framework, I also think its enough to deter companies from using the tech knowing full well the output maybe based on copyrighted material.

Its worth reviewing the 40 companies signed up to EWC below:

Joint Statement on the GPAI Code of Practice and the template by 40 organisations

https://europeanwriterscouncil.eu/ccs-joint-statement-july25/

Google has just announced its going to sign the EU Ai act

https://www.cnbc.com/2025/07/30/big-tech-split-google-to-sign-eus-ai-guidelines-despite-meta-snub.html

There's obviously a lot to it but EU seem to be supporting existing copyright laws, interesting to see how this plays out but this should provide a framework for other to adopt.

'Recital 108

With regard to the obligations imposed on providers of general-purpose AI models to put in place a policy to comply with Union copyright law and make publicly available a summary of the content used for the training,'

https://artificialintelligenceact.eu/recital/108/

If we look at US WPC production the trend (in red) is also headed down.

https://www.clal.it/en/index.php?section=produzioni_usa_wpc2

Aug EU whey futures just dipped below 800 p/t

https://www.eex.com/en/market-data/market-data-hub/agriculturals/futures#%7B%22snippetpicker%22%3A%2241%22%7D

This is exactly what happened in Ireland which ultimately led to the Celtic Tiger era..

“The UK’s lower US tariffs do offer a major incentive for EU companies to shift some of their manufacturing bases to the UK or to expand their existing UK facilities,” he added.

The EU-U.S. trade deal could have one unexpected winner: The UK

Key Points

- The European Union-U.S. trade agreement has been met with scepticism as concerns over what it means for the bloc have emerged.

- Some experts however argue that it could benefit the U.K.

- While the EU is facing 15% tariffs, the U.K.’s baseline duties have been set at 10%.

https://www.cnbc.com/2025/07/29/the-eu-us-trade-deal-could-have-one-unexpected-winner-the-uk.html

Very nice, biotech indexes hitting 21/22 highs

https://www.hsi.com.hk/eng/indexes/all-indexes/hshkbio

CHINAAMC Hang Seng Biotech ETF (3069.HK) (link too long to post)

China Asset Management Co., Ltd- ChinaAMC Hang Seng Hong Kong-Listed Biotech Index QDII ETF (159892.SZ)

https://finance.yahoo.com/quote/159892.SZ/

Short interest hit a whopping 35m on the 11th, where's the door..

https://www.sfc.hk/en/Regulatory-functions/Market/Short-position-reporting/Aggregated-reportable-short-positions-of-specified-shares

By its very definition every Ai image is fake, none are real.

Context is key here, if you go to a cinema and watch Superman which is full as CGI your expectation is met, you know in advance its not real, this is totally different to showing a celebrity at Wimbledon drinking Pimm's only to find out afterwards it was fake, one could argue that's misrepresentation as that person was never there, nor did she drink Pimm's 

Enhancing existing photos, images, movies no problem for the most part, that said there's even some kick back here with people demanding authenticity wrinkles an all hence the term 'photoshopped' 

Not everyone is bullish on Ai, see earlier post from Third Avenue one of S4's largest fund shareholders, Seeking Alpha on Meta earlier this month:

'We initiate Meta Platforms, Inc. (NASDAQ:META) at Strong Sell with $484 PT. Meta Platforms, Inc.—the builder of Facebook, Instagram, WhatsApp and Reality Labs—has branded itself a generative AI powerhouse, but our research reveals a business burning cash on of insane moonshots with no direct visibility on shareholder returns.

Behind the strong AI MAU headlines and optimistic management narrative, we see a company trapped yet another narrative transition from social apps’, straight jumping on the AI hypetrain.'

For the moment lets choose to disagree and see where we are in 12-18 months time, but more importantly for me where S4 are, my bet is they will do remarkably well using Ai as a creative tool and not a replacement for ad agencies as many suggest. 

..just my penny's worth..

Need to read the small print but headlines stating pharma included in 15% tariff, might help with overall sector sentiment.

Deal signed at 15%, that's a lot better than many forecast, futures currently up..

- President Donald Trump and European Commission President Ursula von der Leyen announced the U.S. has reached a trade deal with the European Union.

- Trump said that the deal imposes a 15% tariff on most European goods to the U.S., including cars.

- The U.S. president had previously threatened 30% tariffs on goods from the European Union.

https://www.cnbc.com/2025/07/27/trump-european-union-eu-trade-tariffs.html

Cheap is not always good though is it...as per your earlier post

'META is just the "fast food cheap end" AI advertising model .... and as SMS says no one is going to throw out big budgets to them without taking advice etc which is where SFOR Marketing Services comes in'

Ai images are now synonymous with being 'fake' ..fake doesn't sell handbags to people who have money, yes, it might appeal to a small section of the consumer landscape, but those are not the sort of people that advertisers want to attract.

Life is short, people pay for experiences Ai generated slop is not what most people want, ask Meta what happened to the Metaverse, 3/4 years ago that was the thing, everyone living inside a virtual world, buying, shopping, living no one even mentions the word 'virtual' anymore where once it was 'virtual' this and that..total buzz word

Ai is an immensely useful tool, its just not going to take over the world which is what the hype is all about. Understanding what it is and inherent limitations are key here to avoid getting swept up in the moment.

The basic way in which computers operate (binary language) hasn't changed since its first inception in the 1940's, this is what Ai still uses to this day only much faster of course giving the impression of intelligence, it is impressive though.

That sort of logic just earns you a place in the somewhat crowded filter bin : )

In other news, whey prices are likely to be affected both sides of the pond with next weeks EU tariff decision (assuming can is not kicked down the road yet, again)

https://www.barchart.com/futures/quotes/DG*0/futures-prices

That's not correct at all, as mentioned many times these funds change their weightings daily depending on..

The large iShares fund posted many times has dropped CD from c 13-14% to just over 10%, that fund has a market cap of c $400b so hardly passive.

Note the second one down is our friendly iShares, what we really need is a change in the economy for these guys to stop selling and start buying, that said the shares may have gone to stickier hands ?

Having spent quite a bit of time analysing (more watching than analysing) I cannot figure out what their models are based on, this could be down to only observing during part of an economic cycle, i.e high interest rates and inflation..

Fintel updated today, here are three of the ETF's that have been selling (past tense)

2025-07-25 NP FNDC - Schwab Fundamental International Small Company Index ETF 1,256,906 -3.35 412 -24.31

2025-07-25 NP EWUS - iShares MSCI United Kingdom Small-Cap ETF 62,503 -9.09 20 -28.57

2025-07-25 NP SCHC - Schwab International Small-Cap Equity ETF 1,610,514 -4.00

This could be a realistic scenario, it happened in Ireland and could easily happen here if pharma and others relocate.

Brexit made businesses abandon the UK. Trump’s hefty EU tariffs could bring them back

https://www.cnbc.com/2025/07/21/brexit-made-firms-leave-the-uk-trumps-tariffs-could-bring-them-back.html

Real world of Ai in media, it has connotations of trying to fool its audience, not good imo - used as a tool to assist rather than dupe, different story.

Vogue readers furious after spotting 'disturbing' models in an ad in the prestigious magazine

https://www.dailymail.co.uk/femail/article-14937631/vogue-readers-furious-spot-ai-models-ad-magazine.html

Advertisers could easily have their own Budweiser moment if perception goes against them, its all about managing the experience.

Meta maybe at the cheap end of advertising but the copyright issue is universal across the board, its how Ai works, thats its foundation.

I suspect we will see another Frasers TR1 at some point in the future, hence the glass ceiling on s/p.

SETSmm is now dominated by ETF's where hedge funds have a go at mimicking their moves, until this changes trading is not a bad option imo (can't beat them, join them an all that).

Yen has not done us any favours but whey looks more positive - Glanbia issue results mid August which will offer an insight into post processing prices.