Timothy Moe 3.1 6 ideas

Timothy Moe said Goldman Sachs remains constructive on Korea, with 130% earnings growth forecast for 2026 and the market trading at less than 8 times earnings, offering attractive risk-reward. Despite near-term pressures from the oil shock, Korea's strong semiconductor exports and current account surplus provide flexibility, and the market is overly negative on policy tightening. Korean equities are undervalued with high growth potential, making them a bullish opportunity for longer-term investors. Escalation in the Iran war or prolonged oil shock could further dampen sentiment and growth.

Goldman Sachs downgraded India, cutting earnings growth forecast to 0% from 16%, due to oil import vulnerability, currency weakness, and fiscal pressures. Higher oil prices worsen India's current account deficit, inflation, and may force rate hikes, while the rupee's decline creates a negative feedback loop for equities. India's market is unattractive with skewed downside risk in the war scenario and less upside relative to other regions if the conflict ends. A swift end to the war and drop in oil prices could reverse the downgrade and spur a rally.

Moe notes global defense spending is structurally rising (Europe to 2.5% GDP, US to $1.5T). He explicitly likes the Defense theme "long-term." While Moe mentions Korean defense specifically, the macro driver applies globally. The Iran conflict reinforces the narrative that kinetic war is a persistent risk, ensuring government budgets for defense contractors remain elevated and immune to cyclical cutting. LONG. Defense is a multi-year secular growth story accelerated by current events. Supply chain constraints or government budget caps.

Moe identifies "Power" as a key theme, specifically linking it to AI buildout requirements. He states, "We like the Nuclear theme." High oil/gas prices (due to the war) improve the relative economics of nuclear energy. Furthermore, the "AI Power" trade requires baseload power that renewables cannot fully provide, making uranium miners and nuclear providers essential infrastructure plays. LONG. Convergence of Energy Security (War) and Tech Demand (AI). Regulatory hurdles or safety incidents dampening sentiment.