Microsoft reported wonderful results on Thursday night which sent the company's market cap above $4 trillion for the first time ever. The cloud division grew an astonishing 34% and has already brought in revenue of over $75 billion so far this year (to the end of June).

Overall sales for the quarter rose 18% to $76.4 billion. The image here shows how that revenue is broken down by segment. With operating margins of 45%, this company is a money-making machine. Free cash flows grew 10% to $25.6 billion, bringing the cash and equivalents on the balance sheet to $95 billion.

It must also be noted that they have spent a ton of money on capital expenditure which was 27% higher at $24.2 billion. That bought two gigawatts of new data centre capacity in the last 12 months, they still feel constrained by data hosting shortages. AI demand is far higher than supply.

Copilot has surpassed 100 million monthly active users. I must say, it's my favourite AI chatbot. The underlying tech behind Copilot is ChatGPT. The marriage between Microsoft and ChatGPT is on the rocks, we are following that saga closely.

Microsoft ticks all our boxes and continues to lead and innovate in all the areas that matter. You cannot own enough of this stock.

Magnus Carlsen is a 34-year-old Norwegian and the world's best chess player. He's been ranked number 1 since 2011.

I liked this quote of his about learning from others:

"I have the utmost respect for the masters of the past. They've uncovered many of the secrets in chess so my main task is just to try and make slight improvements on that, to amass all the knowledge and try to use that and improve a little bit."

That's a good attitude to have for most serious pursuits. Don't try to reinvent the wheel, or do hard things from scratch. Spend some time reading first, to identify the current best practice. Watch some YouTube clips. Speak to someone experienced, who has a lot of acquired knowledge in the area. Spend a decade or two building up your skills, before becoming a little more inventive. Put in the time.

I recently spent some time in Italy, and was pleasantly surprised.

Sure, the complaints I'd heard about the noise, the erratic bin collection, the snail-paced bureaucracy, and the occasional shouting match at the questura - weren't unfounded. But for every cold shower in your Airbnb, there's a warm sunset over a stunning piazza. For every queue at a public office, there's a perfect plate of pasta waiting just around the corner. Italy isn't meant to be efficient; it's meant to be beautiful.

I came to appreciate how deeply Italy respects and preserves its history. I travelled from Milan, Venice, Florence, to Rome and I can confirm that every corner of the country, even the tiniest village in the middle of nowhere, feels like a living museum - self-sustaining and proud of its roots, often with ruins or remnants dating back to the 16th century or earlier.

What's remarkable is how the past and present coexist. Italian law requires that the majority of the food sold in local markets and served in restaurants must be sourced from within the province, which means you get an authentic, hyper-local experience wherever you go. It's not just farm-to-table; it's province-to-plate.

In many ways, Italy operates as a network of micro-economies, each region holding on to its own identity, specialties, and traditions. That decentralised richness gives the country its charm, and its resilience. Here at home we also have a rich history and culture that needs preservation. We can learn a lot from them.

Morgan Housel is one of the best financial writers of our generation. This piece is a fascinating read - A few short stories.

Many Substack writers are using AI according to almost half of the 2 000 surveyed - See how they're doing it.

Asian markets are mostly lower today. Tariffs are causing anxieties in the region again. Shanghai is down half a percent and the Nikkei is in a similar boat.

In local news, The SARB cut rates yesterday by 25 basis points to 7%, brilliant! We want more though, the gap between our inflation level and our repo rate is far too wide. The prime lending rate is at 10.5% which is too high. The much needed boost our economy will get from lower rates couldn't come sooner.

Earnings season is still ongoing. We have lots of weekend reading to do, catching up on all the reports. Thank goodness it is so much fun.

Have a good weekend and stay safe out there.