Monthly Market Debrief

Market Snapshot

ALL TIME HIGH. After liberation day, I was pretty doom and gloom about the stock market. I thought it was going to be a long time before I got to say “all time high” again. To be fair, I did say, “if the tariffs actually go into effect,” before launching into my doom and gloom. 

As of this letter, the full “reciprocal tariffs” are still scheduled to start July 9th… do you smell a TACO? Or will the market come tumbling down from this ATH?? Regardless of what you think will happen, I reiterate - STAY THE COURSE. Keep following your investment plan. Invest consistently and deliberately. 

June was dominated by non-finance related news. Primarily, the Israel-Iran conflict and our strike on Iranian nuclear facilities. Apart from short lived dips, the market was shockingly resilient to the threat of WWIII. For the record, I think the market reactions are extremely low on the priority list, but this is the Dollar Debrief, not the Tucker Berates Ted Show. 

Jerome Powell and the Fed continue their “wait and see” approach to interest rates in the face of mounting criticism from Trump to “cut baby, cut.” The Fed justifies their position with strong economic numbers and the threat of increased inflation due to tariffs. Hopefully, inflation doesn’t heat up this summer… Get it?

Company Highlight - Super Micro Computers

On June 26th, Super Micro Computers announced the closing of a private $2.3 billion convertible note offering, which is essentially a bond from Super Micro that could be paid back or converted into stock. Companies offer bonds all the time as a way to raise money, but this one was different. Super Micro offered the notes at a 0% interest rate.

This means investors are so confident in Super Micro’s potential growth that they lent the company $2.3 BILLION for FREE. By 2030, the holders of these convertible notes could either convert the notes to Super Micro stock at $55.20 per share or receive their money back PLUS ZERO% INTEREST. The $55 conversion price is a 35% premium on the June 23rd price of $40.89. These investors are betting the stock will rise well above the $55 mark over the next five years, making their convertible notes extremely profitable. So far, their bet looks to be paying off as the stock ended the month up 19% from the June 23rd close price. 

So what is Super Micro Computers?

Founded in 1993, Super Micro makes energy-efficient servers. They are a leader in server and data center hardware that continues to be ~so hot right now~. Their products leverage NVIDIA chips to bring top of the line AI computing power.

The company joined the S&P 500 in 2024 and has had a bit of a rocky ride. They operate on tight profit margins and have missed earnings expectations in several recent quarters. Oh, and a couple of SEC investigations into alleged accounting irregularities didn’t help either… They have fallen far from their $118 per share peak in March of 2024. 

Nevertheless, a few investors with $2.3 billion sitting around believe this stock has tremendous potential. Are we witnessing a redemption arc for this (allegedly) reformed corporate troublemaker?

Debrief on Deck

Next Week, we will talk about the CFP (Certified Financial Planner), CFA (Chartered Financial Analyst), and a few other letters on peoples’ LinkedIn page. What they are, what they mean, and why you should care.

Until then, stay the course.