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Carnegie Global rose 0.2 percent this month. Currency effects were positive and added 3.0 percent. The biggest winners were Unilever, Paychex and Ryman Healthcare, and the biggest losers were Franklin Covey, Salesforce and Alphabet.

Despite the stock market development, Covid-19 continues to affect our portfolio companies. Disney was forced to lay off 28,000 employees, mostly in parks, cruises and shops. So far, the company has tried to keep on most people in the hope that the pandemic will pass quickly, but this has become unsustainable. The market expected this and did not react to the news.

The big topic of conversation (apart from Covid) is the US presidential election. This is an important event, but I have not spent too much time trying to predict who will win or what the consequences will be for us long-term investors. I wrote a bit about how I see this on the fund blog.

We invested in Microsoft in September, at the same time as we sold Franklin Covey. I have been following Microsoft for several years and should have invested earlier. Since Satya Nadella took over as CEO in 2014, the company has gone from strength to strength. It has successfully switched to a software-as-a-service model for its core Office and Windows products. It has also successfully established itself as the number two in cloud after Amazon. Also, it has begun the transition to cloud in gaming. The market has given Satya top ratings, and Microsoft’s value has increased by over USD 1,200 billion (!) since he took over. But we invest in track records, not the future. I think Microsoft has just started scratching the surface in cloud and that it has a more or less unassailable position in Windows and Office to which it can add new productivity services.

We sold Franklin Covey mainly to be able to buy Microsoft. I still believe the company has a bright future, but this is possibly further away than I thought when we invested.

 

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Carnegie Global is an actively managed equity fund for people looking to make long-term investments in some of the world’s best value companies. As with Carnegie Fonder’s other funds, Carnegie...

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