
20 Oct 20th October 2025
Index Movement Last Week
S&P500 | +1.7% |
Nasdaq | +2.4% |
Aussie ASX200 | +0.0% |
I’ve been out of action for the last few weeks. But I have an excuse. I got married to the amazing Carolina. It was a wonderful day surrounded by friends and family and one that I will be forever grateful for.

So, what has happened since I’ve been distracted?
Not a lot. It seems everything is much the same when I look at stock prices.
But then, after reading the news it seems that quite a lot has happened.
I return to find the US government in shutdown because they cannot agree on how much money to spend, rising trade tensions between the US and China, a weakening US dollar, Gold going on a tear and questionable circular AI deals. Yet the S&P500 index, the most important index in the world, is just 1.4% below an all time high.
That tells me that all the above are not important. What is important to markets is AI and what it means for the future.
Right now, I am finding it hard to come up with a reason to own anything outside of AI.
Yes, we have seen a recent jump in rare earth miners here in Australia because China is threatening to restrict supply. This confuses me because all these rare earths are not rare at all. They are everywhere. What is rare is the ability to refine them into useable products and whilst we might mine them, we don’t refine them. Most of that happens in China.
If you have gained recently from this move then I am happy for you. But I would say take profits as there is a big hurdle to overcome for our Aussie miners to benefit if China stops supply refined material to the US.
And then we have Gold. Up and over $4,000. I thought it would struggle to go through $3,500 so was very wrong there. Gold bugs will tout this as a display of rejection of fiat currency and that Gold is the only true medium of exchange. I say no. I say this pattern has happened in every asset since the beginning of time. Central banks (big guys) started buying three years ago and have continued. Now retail are loading up.
That is a picture from a Gold bullion shop in Sydney. Retail lining up to buy.
Have you ever seen a clearer picture of a warning for a top? Retail lining up and waiting to buy something at all time high prices.
Time to take your profits.
On to earnings as we have just started Q3 earnings season. And the bar is high because Q2 was so good. Despite that, 86% of results so far have exceeded expectations. There is no cause for concern about profits from US companies.
Earnings season tends to go by industry. Financials kicked us off and the big banks all destroyed expectations. Each one had a different focus of major growth, but all smashed expectations.
Then a couple of small banks came out with some bad loans and so the media rolled out the ever negative CEO of JP Morgan, Jamie Dimon, who said something about when you see one cockroach there are always more. But this guy sees cockroaches in his sleep and I believe the majority of people now know what to expect from him so ignored his comments.
There is regulation changes going through Congress that will allow banks to lend more. That will likely get approved and the economy will expand and banks will make more profits
I like the financial sector here so you can add that to your buy list on top of AI.
On to AI and deal flow because it is getting complex.
NVidia announced a partnership with ABB. ABB make electrical power equipment. They announced a collaboration to develop 1MW power racks. To put that in context, it is the same as the power consumption of 800 homes.
Where is this extra power going to come from? In the US surely it has to be Nuclear. I’ll write more on this next week, but go out and buy Silex Systems on the ASX – SLX. It will be key to this. Disclosure – I own SLX so have a vested interest in saying this.
Then we have NVidia investing $100billion in OpenAI which OpenAI can then use to buy more Nvidia chips. It gets more confusing with OpenAI investing $10billion in AMD, a competitor to NVidia.
It looks like a snake eating its own tail. But what it does is ensure the future buildout and advancement of AI has funding to happen. AI is not a bubble and is not going away. We are just at the start.
Lastly this week, I came across a little known brilliant dividend payer for those that like this kind of thing
Best Pacific International Holdings – 2111.HK
This is what the company profile says Best Pacific does
“Best Pacific International Holdings Limited, together with its subsidiaries, manufactures, trades in, and sells elastic fabric, elastic webbing, and lace”
That doesn’t mean a lot until to see its list of customers
“ANTA, FILA, Lululemon, Under Armour, UNIQLO, Aimer, Chantelle, Embry Form, Maniform, Marks & Spencer, Spanx, Triumph, Victoria’s Secret and Wacoal”
It has been doing this since 2004
The stock is trading on the Hong Kong exchange for 3.26HKD
Last year the dividend was 0.284 which gives a yield of 8.7% and it has been increasing that dividend every year since 2014.
It also trades on a PE of less than 6 so is a cheap buy.
Next week I will talk more about SLX and other AI opportunities
Warning
Stock values can go down as well as up. It is possible to lose 100% of your investment in a stock. Any advice given by Capital 19 is general advice only and does not take your personal circumstances into account and might not be suitable for you.