A post to keep track of my thoughts and outlook on the US equity market as a whole, and also on individual stocks and the reasons that I am buying them.
My US stock investments
TSLA – Boom or bust company. Absolutely insane PE and valuation, but it has calmed from its peak anyways. Cheaper EV model + FSD would be the main bet in my mind at the moment. Optimus is cool but a bit too down the road. A bit skeptical about robotaxi and not sure how much it’s priced in.
AAPL – The big elephant that probably isn’t going to go 3x, 5x but very stable growth + taking advantage of the AI boom for sure. Very good products that I use every day as well.
META – Profitable ad platform, great innovation from AI ads, and still growing. Also the one company that I pay the most money to month after month.
GOOGL – search might be a bit on decline? – but youtube is just getting started probably, and I watch hours of it per day plus using it as a content platform for my business. Also can greatly improve with AI in terms of youtube algorithm, ads algorithm – hopefully I could even use their youtube ads profitably down the road.
UBER – on my watchlist now. Might be a great beneficiary from the FSD and autonomous taxi development, as uber being the “demand app”. Unless Tesla takes up the majority of the market with robotaxi, otherwise with other players entering, uber will be at the center to facilitate the rides most likely. Good profit and margin growth in recent years too I think, have to do more research.
20240719 Updates
Right now I’m at around 18% portfolio (HK$370k) invested in US equities.
With 70% in mega tech stocks, some in nasdaq-100 ETFs while some individual stock holdings with apple, tesla, and meta mainly.
Already did a post on the rotation happening that’s why I bought some IWM – which I think can be a good long-term hedge anyways?
But if it starts to underperform again then I will move out either partially or completely, let’s see how it goes.
Current Outlook
I think the US market is somewhat likely on a climax run. I’m thinking a 50-50 chance of hard-landing and soft-landing.
Sometimes I tend to lean toward the soft-landing camp after hearing the optimism from analysis and economists.
In any case, I’m taking a “moderate defensive” position right now, with max 20% in US equities (and 20% in JP equities).
With a soft-landing scenario and a trump administration, it’s feasible that the market can keep hitting new highs. On the other hand an unexpected hard-landing I think it’s also totally feasible and I’ll rotate some gold and treasuries into US equities then if I feel like it’s offense mode again when it bounce back up eventually.
20240726 Updates
Quite a huge drop from last week, but honestly it actually starts to look less like a recession / hard-landing scenario than before.
The main reason being, it’s mostly just mega-cap and tech that’s getting sold off, and the rest of the market is actually doing alright.
In any case, there is a tech sell-off sentiment and I’m going to go into more defensive mode for now, reducing to around 15% of portfolio.
Maybe snatching up some individual stocks like META or GOOGL if the pricing looks attractive enough. (note – just bought 5 GOOGL @166)
On another note, today the market is up and RUS2000 is up 2% after market open at this point. Honestly I’m getting itchy fingers and wanting to rotate more QQQM over to IWM.
But you know, I thought about it hard and long, and I decided the max % on IWM should be 30% of my US equity portfolio. And it’s already at 32%.
Remember, inflation data can turn south and the chances of rate cut in Sept can diminish or worse, disappear. Or they don’t end up cutting in Sept somehow.
The main driver for the rotation is the entering of the rate cut cycle and wind can start blowing the other way at any time.
If it ends up the RUS2000 really jumps 30% while N100 stays flat, well at least I already have 30% of my US stocks in it and that’s great. If not, then at least I only have 30% in it.
In any case I’ve made the decision and I am not going to let emotions cloud my judgment. Huh look I’m growing I guess.
On second thought, since I have some extra cash in the account, and the US portfolio is <15% at this point, I’ll add just a tad, 5 shares IWM. Now moving it to 35% – Really max I swear. In fact I’ll reduce when RUS2000 hits 2400+.
Current Outlook
In the short term – maybe days, maybe weeks – tech sell off and rotation will continue and maybe the NAS100 will stay flat. Maybe it’ll slope down a bit.
It should bounce back I think, maybe after the election. Not going to bet too much on it so taking
Anyways it wasn’t a great week for US equities especially big tech, but my mid to long term thesis stays the same – US mega tech will continue to dominate, EVEN if some of them fail to realize or monetize the whole AI thing.