Trading ideas and investment strategies discussed herein may give rise to significant risk and are not suitable for all investors. Investors should have experience in relevant markets and the financial resources to absorb any losses arising from applying these ideas or strategies. >> Employed by a non-US affiliate of BofAS and is not registered/qualified as a research analyst under the FINRA rules. Refer to "Other Important Disclosures" for information on certain BofA Securities entities that take responsibility for the information herein in particular jurisdictions. BofA Securities does and seeks to do business with issuers covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. Refer to important disclosures on page 9 to 11. The Flow Show If Stocks were the Super Bowl Scores on the Doors: oil 3.1%, US dollar 2.7%, stocks 2.6%, commodities 2.2%, crypto 1.1%, cash 0.5%, HY bonds -0.1%, IG -1.5%, gold -1.8%, govt bonds -3.0% YTD. The Price is Right: price of a 30-second ad during Super Bowl I (1967) was $37,500, price for Super Bowl LVII $7,000,000 = 185x jump; nothing keeps pace with Super Bowl inflation (93 of 100 most watched TV shows in ‘23 were NFL games); but if they could chicken wings would now cost $43/lb (was 23c/lb in 1967), 6-pack of beer would be $340, gallon of gasoline $61, avg US house price $4.2mn & S&P500 would be 16374. Tale of the Tape: talking of inflation…Nvidia market cap up $600bn past 2 months or “1 Tesla" (that’s market cap not 1 car); Nvidia $1.7tn market cap same as China stock market (H-shares worth $1.7tn) as US hits record 64% of MSCI ACWI & China now <3%. The Biggest Picture: talking of China…if you interested in direct exposure to world’s most unloved market, follow “Japanification”… as Japan Nikkei collapsed from 40k to 20k (on way to 10k) in 1990s was big 400% bull market for 15 stocks within index ("Japan's Nifty 15" - Chart 2) same period, i.e. especially in deflation bears small portfolio of "best of breed" stocks (strong management, balance sheets, EPS) very profitable. Chart 2: Japan in the 1990s…Best of Breed bull in deflationary bear TOPIX vs Japan “Nifty 15” Source: BofA Global Investment Strategy, Bloomberg. Japan “Nifty 15” = Advantest, Bridgestone, Canon, Honda, Hoya, Konami, Kyocera, Matsushita, Murata, Nintendo, Orix, Ricoh, Rohm, Sony, Toyota BofA GLOBAL RESEARCH More on page 2… -40%+400%0.00.51.01.52.02.53.03.54.04.55.019901991199219931994199519961997199819992000TOPIXJapan "Nifty 15"08 February 2024 Investment Strategy Global Michael Hartnett Investment Strategist BofAS +1 646 855 1508 michael.hartnett@bofa.com Elyas Galou >> Investment Strategist BofASE (Fr...
