Portfolio Update (+117%) & Brookfield Q3 Earnings Highlights
We got the pullback in AI stocks we were waiting for
Welcome to The Growth Curve. I do three things here:
I share portfolio updates and all transactions every week.
Earnings & important updates from companies I own or that are on my watchlist.
Deep dives into underfollowed small to medium cap stocks to help you find new investment ideas. Our last three deep dives were on Fluence Energy (FLNC) & UiPath (PATH) & NuScale Power Corporation (SMR). Our next deep dive on ONDAS Holdings (ONDS) will be sent out once earnings season has slowed down.
Portfolio performance since August 29, 2022
Since August 29, 2022, the portfolio is up 117% vs the SPY return of 69%. The portfolio has a compound annual growth rate (CAGR) of 27% since 2022.
I’m very happy with this performance and it is far exceeding my expectations. Over the long term I’d be thrilled to average a 12% - 15% annual return.
The AI Stock Reset
I’ve been saying that I felt a lot of the AI stocks were over hyped and overvalued. I believe we are in the early stages of an AI Boom, you can see that pretty clearly in the CAPEX of some of the largest companies in the world. They’ve never collectively invested as much money as fast as they are right now.
However, even when the long-term opportunity is huge…or I should say especially when the long-term opportunity is huge, people tend to get over excited about the short-term. That’s exactly what I felt had happened in AI stock land.
I unfortunately got a little bit of FOMO myself and started small starter positions in stocks like Nebius, IREN, and others that I was 99% sure would pullback, but I kept them small and had a plan to increase my allocation to them if/when a pull back happened.
We ended up getting the pull back I was expecting and although I didn’t have a big chunk of cash to invest, I was able to sell a bit of my oversized Amazon position which was down 5% over the last week to raise money to buy stocks like Nebius, IREN, and others which were down 20% - 30%.
These charts show exactly what I’m talking about. At the bottom, you can see I was able to lower my cost basis in Nebius and IREN by selling some Amazon which was down much less.
Amazon down 5% this week:
IREN: Down 30% this week:
NBIS down 27% this week:
I want to make a quick point here. I try to never say never, but I do my very best to never say “I know” or other woods that indicate 100% certainty. Because when it comes to investing it is IMPOSSIBLE to predict the future and we truly never KNOW for sure what is going to happen.
There’s a lot of people out there speaking in certainties and it’s one of my biggest pet peeves.
What I do is study market history and I use a combination of fundamental analysis, intangible analysis (observing management, brand premium, moats, etc), and observing investor sentiment/psychology and use a process I’ve developed over 15 years of investing to find great companies early, buy them, and hold on to them to let their long-term compounding grow my portfolio.
Transactions this Week, Full Portfolio, and Company Updates
I’m not going to claim to know what’s going to happen with the market next week, or if the market has bottomed. The indexes are down just a couple percent off their highs so there could certainly be more downside ahead.
But I don’t try to time bottoms. I felt some stocks were very overvalued so my approach was to start small positions, get some skin in the game, and then have a plan to increase my position size if they pulled back.
That’s exactly how it ended up working out. But, I’m prepared for my whole portfolio to pull back 10% - 30%. It has happened before and it will happen again. But I’m invested in a way that I know I’ll be able to STAY invested through an inevitable bear market and continue adding money to my portfolio every month to keep buying.