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After the big sector rotation in November, December was a strong month for stocks in general. GP Bullhound Thyra Hedge ended up 1.4 % and thus ended up 6.1 % in 2020. The USD/SEK development held back development during the year somewhat. However, many companies we own will benefit from the weaker USD in exports, such as Microsoft.
Demand for products and services in the fourth quarter and December is similar to the trend we saw earlier in the year. Strong demand for WFH products and weaker demand for office products and a general high demand for technology.
If we look at the gaming side, many companies had focused their new releases on the last quarter when the new consoles were released. Demand has been high throughout the year due to Covid, but the new consoles, the second wave of Covid, Christmas and new games lifted everything further during the 4th quarter. What stands out in our eyes, however, is the continued strength of Nintendo Switch sales of both games and consoles, which means that we expect a further increase in guidance from Nintendo.
Demand for semiconductors has been unusually strong during the fourth quarter driven by many different factors and industries. However, the two biggest reasons have been good for Apple 5G phone demand and a boost for auto components. The memory side also appears to have improved during the quarter. All this means that we enter 2021 with a high utilization rate in the semiconductor factories and in many cases increased lead times. This is clearly positive for the equipment manufacturers, while the uncertainty around politics and China is the biggest uncertainty factor.
Cloud services have been undergoing strong growth in recent years and WFH has only accelerated that development. Growth may probably slow down a bit when we return to our work, but we do believe that many decisions made during this pandemic have led to stronger underlying growth for many services and cloud solutions. However, the valuations hold us back somewhat from buying many interesting companies, but we follow them closely and hope to buy in in the future.
Many digital platforms and services have benefited greatly from the WFH trend, such as streaming services Netflix, etc., while others that offer services for travel, hotels and advertising have been negatively affected by the trend, such as Bookings.com, Facebook, etc. However, the platforms aimed at advertising such as Facebook and Google have now, a bit into the pandemic, gained new customers who have replaced the areas and customers affected by COVID and are now almost back to where they were before the pandemic hit.
During the month we have bought smaller positions in Facebook and Salesforce after the declines and we have reduced our position in Apple after the strong rise.