GOD's Hands

What are the four asset classes

• Equities (Stocks)

• Fixed Income (Bonds/Credit)

• Foreign Exchange (FX/Currencies)

• Commodities

What are the major asset classes?

The major traditional asset classes are:

• Equities (Equities represent ownership in companies)

• Fixed income (Fixed income represents lending to governments or corporations in exchange for interest payments)

• Foreign exchange (Trading one currency against another)

• Commodities (Physical goods such as oil, metals, and agricultural products)

MS Stock Prices for the past week

Microsoft Stock Pitch

If you asked me to pitch you one stock, I would recommend going long Microsoft, ticker MSFT.

As of earlier today Micorsoft is trading at X dollars and has been trading at a range of $487 - $506 over the last week.

My thesis is that Microsoft is a reliable company to invest in because the market is underestimating how quickly Microsoft's massive AI infrastructure investments are translating into revenue growth, particularly through Azure, while underappreciating the distribution advantage created by Microsoft's existing enterprise ecosystem.

Microsoft is a diversified technology company, but the two businesses I would focus on are its productivity software, like Microsoft 365, and its cloud business, Azure. What makes Microsoft particularly attractive to me is that it can monetize AI through customers that are already committed to their products.

I have three main reasons for being bullish.

First, Azure growth remains extremely strong. In the most recent quarter, Azure revenue grew 43% year-over-year, and annual Azure revenue surpassed $100 billion for the first time. Microsoft also beat expectations on both revenue and earnings, with approximately $90 billion of quarterly revenue- a tangible example of how the market underestimates it’s performance.

Second, I think they’ve transcended the phase of “investing” in AI and have actually begun monetizing it. Investors in recent months have been concerned that tech companies are spending too much on data centers and AI infrastructure without generating enough return. First, Microsoft also about $41 billion on capital expenditures in the quarter, which was below analyst expectations. But, more importantly, the acceleration of Azure suggests that this infrastructure is increasingly being used by customers and converted into revenue. There are tangible returns on their AI investment that investors can see which gives them greater confidence in spending.

Third, Microsoft has a major distribution advantage. Essentially, it doesnt need to build a new customer base to win the AI race. It can sell AI through products that businesses already use, including Microsoft 365, Azure, GitHub and LinkedIn.It can add AI products to an ecosystem that already has deep relationships with enterprises. And it’s a tremendously diverse ecosystem when we consider how it expands across corporate, gaming & media, security, and education which can make it more durable during volatile periods.

Now, as an intern one of the things I had to do this summer was assist in writing the new equity sales and trading policy that will be coming out soon. One of the key things that I remember writing very explicitly within this policy is the importance of disclosing risk. No company or stock is perfect and as a salesperson you have an ethical and compliance obligation to disclose risks or downsides to the product. The biggest risk to my thesis is valuation and capital intensity. Microsoft is already a very highly valued company, so if Azure growth slows or goes below market expectation or if they become overly ambitious and AI monetization starts to unalign with the infrastructure investment, the stock could see compression. Competition from Amazon and Google is another significant risk.

Despite this, I think the recent earnings results provide evidence that Microsoft’s AI investment cycle is generating tangible economic returns. So overall, I would recommend Microsoft, with a 12-month price target of approximately $554.

Dirt on Meta

1. Their legal governance and structure. In terms of legal affairs, MSFT has kept a very low profile compared to it’s competitors, such as Meta. In it’s second quarter, Meta racked up over 2.4 billion dollars in legal charges- this out of 60 billion in earnings. And at this very moment, Meta has over 942 million in legal charges from the state of New Mexico alone. This doesnt include the other 29 states that are bringing charges for very similar reasons relating to child protection. Additionally, in the recent spur of AI agents hacking other companies, Meta was one of them and acompany breached who has their data leaked could sue, contributing the recipt of charges faced by the company. Lastly, I see a huge legal catalyst that would cause meta’s stock value to drop being the rise in controversy with their Meta glasses. I would bet a ludicrous amount of money that within a year they will face a significant lawsuit relating to privacy infringement and we see this with some of the minor filings already with Bartone v. Meta and Canady v. Meta but I could feasibly see another million dollar lawsuit coming from people being recorded and their information being routed without explicit consent.

How Would You Invest 1 Million Dollars

Approaching this as a young investor without any near term expenses, I would prioritize diversification because my goal is to maximise my returns while minimizing risk as much as possible. “Assuming I have a long-term investment horizon and don't need the money for near-term expenses, I would prioritize diversification rather than trying to pick one winning asset. I’d allocate roughly 60% to equities, with about 45% in U.S. equities and 15% internationally. I’d put 20% in high-quality fixed income, 10% in cash and short-duration Treasuries, and about 10% in commodities.

The equity allocation would be the primary driver of long-term growth, while fixed income would provide income and help reduce the portfolio’s sensitivity to an equity selloff. I’d also want international exposure because I wouldn't want my entire portfolio dependent on the U.S. economy.

I’d include commodities because they give me exposure to different economic and geopolitical drivers than traditional stocks and bonds. I’d probably have some exposure to gold as a potential hedge against certain periods of market stress, as well as energy and industrial commodities, which are more closely tied to global growth and supply and demand.

Within the equity allocation, I’d diversify across sectors rather than making one concentrated bet. I could have a modest allocation to individual names where I have high conviction—for example, Microsoft—but I wouldn't want one stock to determine the outcome of the entire portfolio.

Ultimately, my objective wouldn't be to maximize returns at any cost. I’d want to maximize risk-adjusted returns while maintaining enough liquidity and diversification to withstand periods of market volatility and take advantage of opportunities when they arise.”
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Clarifying Questions:

• Clarify if this is my personal money?

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Questions to Ask Them:

• If you could have a company IPO tomorrow, what company would you want it to be and how much would you invest?

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Why Microsoft rather than a competitor?

Its largest competitors are Meta and Alphabet.

All three are extremely strong AI companies, but my reason for preferring Microsoft is the combination of AI exposure, cloud infrastructure, and enterprise distribution.

Meta's primary monetization engine is still advertising. $59.4 billion of it’s $60.8 billion total revenue came from advertising. One, this isnt diverse and incredibly risky, especially if the company falls out of favor among consumers which can cause an immense earning nosedive. Second, because of this focus in advertising, its AI investments are largely aimed at improving engagement and advertising efficiency.

Alphabet has an incredibly strong position through Gemini and Google Cloud, and I view Google as a genuine competitor; however theyre undergoing significant leadership changes that make it difficult to know what direction the company may take in the future. Additionally, their AI spending does not align synchronously with their returns, which would make me less confident in their performance.

Where I think Microsoft has an advantage is its existing enterprise ecosystem. Businesses already use Microsoft 365, Azure, GitHub, Dynamics and Microsoft's security products, so Microsoft can introduce AI into workflows that customers already depend on. That gives it multiple ways to monetize AI—from Azure consumption to Copilot subscriptions to enterprise AI applications—without having to build an entirely new customer base which makes the AI spending more reliable with tangible returns.

So I'm not betting on Microsoft because I think it will necessarily have the best AI model. I'm betting on Microsoft because I think it is particularly well positioned to monetize AI.

What Happened at the Fed Meeting

The fed delivered a hawkish hold, choosing to keep rates at the 3.50-3.75 range. 9 affirmed, 3 dissented in favor of a hike.

Relationship between Treasury Price and Yield

Price goes ↑ = Yields go ↓

Treasury/Interest Rates Info to Know (5)

• Treasury notes gain interest over the maturity period

  • Interest paid per year or every 6 months

  • Full amount given back at maturity

• Face value= how much the note “costs” or is orginally worth

• Maturity = The period of time that you receive interest before getting the payout

• Coupon (rate) = interest rate

• Yield = The value of your “take-home” pay (the interest and final payout) relative to what you spent for the bond/note.

Interest Rates the last 6 months

The Fed has actually kept its policy rate unchanged at 3.50% to 3.75% throughout the first half of 2026 and into July. The more important story has been the shift in expectations. Earlier in the year, markets were still thinking about potential rate cuts, but persistent inflation, higher energy prices and geopolitical pressures pushed the Fed toward a more hawkish stance. By June, nine Fed policymakers were projecting at least one hike by year-end, and in July three policymakers actually dissented in favor of a 25-basis-point hike. More recently, weaker labor-market data has complicated that picture and reduced expectations for a September hike. So right now, the Fed is balancing persistent inflation against signs of labor-market weakness, and the market is focused on whether the next move is a hike or a continued hold.

Interest rates the last 6 years

The past six years have essentially been a full monetary-policy cycle. The Fed cut rates to near zero during COVID to support the economy, kept them there through 2021, and then aggressively tightened beginning in 2022 as inflation became persistent. Rates reached 5.25–5.50% in 2023 and stayed there while the Fed waited for tighter financial conditions to bring inflation down. As inflation moderated and the labor market cooled, the Fed began cutting in September 2024 and continued easing through 2025, bringing the target range to 3.50–3.75%. In 2026, the Fed has paused because it is balancing inflation that remains above target against signs of potential labor-market weakness. So we're currently in a much more uncertain phase of the cycle, with markets focused on whether the next move is a cut, a hold, or potentially a hike.

When would you sell for microsoft

I would sell if I saw Azure growth materially decelerate or an over investment in AI without the returns to validate it.

Geopolitical events

Geopolitical events are moving markets primarily through energy prices, trade and supply-chain disruptions, inflation expectations, and changes in risk appetite.

Right now, the Middle East conflict and the disruption around the Strait of Hormuz are particularly important because they affect oil, natural gas, fertilizer and shipping. These can have secondary impacts on gas prices, transit generally, energy prices, and food/agricultural prices.

At the same time, U.S. tariff policy is creating supply-side inflation shock while also increasing uncertainty around global growth and corporate investment. So the market is balancing two competing forces: inflationary pressure, which can push interest rates higher, and growth pressure or risk-aversion, which can push interest rates lower.

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War with Iran and blockage of the strait of hormuz causing oil prices to rise. This has had a secondary impact on the economy and consumer spending as gas prices also inflate and consumer spending decreases to account for the expensive prices

• Natural Gas also passes through the strait which has caused the prices to rise

• Defense stocks can offer some stability during this period as they perform well during tense geopolitical periods

• Growth pressure= concern the economy will slow down

Simplified Impact Geopolitical Chart

Geopolitical conflict

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Oil ↑

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Transportation/energy costs ↑

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Inflation ↑

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Fed becomes more hawkish

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Expected interest rates ↑

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Treasury yields ↑

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Borrowing costs ↑

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Economic growth ↓

More about Tariffs

I think about tariffs in three ways: Direct cost effect of imports, cost effect on exports, and company uncertainty.

First, there's the direct cost effect: tariffs raise the cost of imported inputs, which can squeeze corporate margins or be passed on to consumers through higher prices.

Second, there's the trade effect: other countries can retaliate, which can hurt U.S. exporters and reduce global trade.

Third, there's uncertainty: companies may delay investment or restructure supply chains because they don't know what the long-term trade regime will look like.

So tariffs can create a difficult combination of higher inflation and weaker growth. That's particularly important for the Fed because higher inflation argues for tighter policy while weaker growth argues for easier policy. For markets, I'd therefore watch inflation expectations, Treasury yields, corporate margins, credit spreads and companies' capital-expenditure plans.

Why Scotiabank

I am interested in Scotiabank primarily because of the more ___ culture and it’s expansion during this period growth across regions.

One thing that has concistenly been emphasized across every executive speaker that us interns have had the opportunity to hear from, is the immense comradery among scotia employees, their dilligence, and their willingness to pay it forward and pay it back. Everyone here is incredibly kind and a great team player, which allows for a more content employees and a more cohesive work environment. Additionally, everyone here is super hard working and really willing to roll up their sleeves and be able to say they put their all into every assignment to produce the best product possible. Finally, everyone here is ethusicatsic about investing in the next generation of employees. Any time I have a question or when I wanted to learn more about a desk to better understand how my team in compliance advised them, everyone was extremely enthusiastic about sharing that knowledge with me and helping me to have my knowledge be on par, or at least very close, with theirs. And thats something I am truly looking for. Nicole Frew told me last week that being an inquisitive person is great because you want to be a “learn it all” rather than a “know it all” and its clear that people here want to help me learn.

Additionally, now is a great time to become involved with the bank as it expands and seeks out new talent. Joining full time now would give me the opportunity to watch how the firm evolves with it’s Dallas expansion while also giving me the opportunity to contribute in my own way, whether intellectually or with my personality, to what could become “mainstream” Scotiabank culture.

Projects I’ve Worked On

Compliance Newsletter, Compliance Exchange (Going to round two!), Governance (Good opportunity to discuss how i’m an organized persion and good and good at identifying whats needed and organizing + sourcing accordingly), Equity Sales and Trading Policy.