As of Friday 1st of May the portfolio was up 3.8% versus the 5.11% of the SP500, a breather compared to last year where the results for the Sp500 were almost none in Euros versus my 30%. I think that the SP500 performance comes a bit from the USD depreciation impact. It did not more since Friday.
I view this period as a transition period where I sold some winners to reorient the portfolio towards higher conviction higher value names.
The current market is impacted by the war in Iran and the consequent blocking of oil through the straight of Hormuz. This can have consequences on cyclical companies as a long term elevated oil price will destroy them.
The market is also more and more speculative with a surge of stock promoters looking for foreign small caps with some semiconductors exposure and these are showing strong price growth over a few weeks.
The AI revolution is real but we are looking at momentum pump and dumps, among real future winners. Speculation is at the maximum level. It was quantum, health insurers, silver, now Ai bottlenecks.
On the other hand, quality companies and tech companies benefiting from AI are trading at reasonable to cheap valuations.
Even Mag7 companies like Meta (If we ignore the capex buildup or treat it as temporary), Amazon and others trade at quite attractive valuations.
I have been focusing on AI, winning industrials and tech from Emerging markets this month.
I am not too interested in Africa in the moment, because it keeps performing extremely well, however South East Asia and Latin America are out of favor. In Emerging markets you have to go where it is unpopular, and never buy past years winning zones. You could hold them, but not buy when an emerging market is popular.
I think that value is not too hard to find at the moment, you have large EM tech and small European serial acquirers, as well as Japan currency. Quality is also underrated because companies that will grow quite slowly but for 30 years are underrated. If you want to do 10-15% a year doing nothing, it sounds pretty nice with a large portfolio. I have my quality exposure, so now I focus more on Tech and a bit of serial acquirers.
My last addition is..
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