February 2024 portfolio update
and the discipline to do nothing 🧘♂️
Ciao,
here we are with the Feb 2024 portfolio review, and what a month it was! AI tipping point, big techs super earnings and more Tesla drama!
Compared to last month's format, I added 3 things (in future, I will stick to this format for the monthly portfolio reviews):
a section on market news and what do they mean for you
a quote from a famous investor and what you can learn from it
a meme about investing, because why not :)
📊 Performance:
Total (from 2020): +80,0%
Feb 2024: +7,6%
💼 Portfolio overview:
💰 Sells: nothing
💸 Buys: nothing
🎙 Comments
What do you mean by “nothing”, you didn’t do a single trade in the whole month? Absolutely yes! And this is how it should be in my opinion and in the opinion of the best investors of all time. For example, Peter Lynch, Chuck Akre and Warren Buffet have been vocal about holding stocks for the long term as a weapon for value creation. It takes a lot of discipline to not sell when things go wrong but also when things go well. Also, there are tens of thousands of stocks and thousands of analysts and pundits chatting about buying opportunities, it takes discipline to sit on cash and do nothing while waiting for an exceptional opportunity.
🌍 News you should not miss
Strong earnings across the board for big tech.
What happened: Nvidia led the charge and Microsoft, Apple, Meta and Amazon all reported strong earning surprises and strong guidance for the next year. This plus AI tipping point shot indexes to new all-time highs. Semiconductors stocks went up too in anticipation of strong demand for AI chips.
Why it’s important: Nvidia, big techs and semis stocks have gained massively in the last few months and weeks, now they needed to deliver in terms of earnings. Earnings growth shows substance behind the increase in stock prices and rejects the notion of being in a bubble. I asked myself if Nvidia is an bubble, while doing research I found an interesting comparison between Cisco during the dot-com bubble and Nvidia now. At bubble peak Cisco forward P/E were nearly 4x Nvidia forward P/E now.
A judge rejected Musk Tesla huge pay deal.
What happened: Elon negotiated with the board of Tesla a compensation package for himself worth $56bn - to put in context Volkswagen group (VW, Audi, Porsche, Bentley etc.) market cap is about $60bn. A group of Tesla shareholders brought this to court and a judge in Delaware found this unfair to shareholders and blocked it.
Why it’s important: more turmoil at Tesla when they really don’t need it. This news comes on top of Musk stating that he’s not comfortable developing AI products inside Tesla unless he owns 25% of voting rights in the company (right now he owns about 12.5%). To add to this drama, Tesla released a slow guidance for next year. A series of huge blows to the company that is tanking this year, while the market is, in general, doing well.
Apple release its Apple vision pro
What happened: Apple released their new mixed reality headset and started selling it for ~$4k in US stores first.
Why it’s important: I personally have written off the whole market for Augmented Reality and Virtual reality, but when Apple moves, it can redefine and even create new markets out of nothing, let’s see if they can do it this time. Zuck tried them but thinks Oculus is much better :)
🧙♂️ A quote from a great investor
The quote: “Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.” - Warren Buffet
What can you learn from it?: such great advice and you can put into practice by only investing in companies that you understand well, are proven market leaders, are highly profitable and ride secular, long-term trends. Or how I say it: only buy stocks that let you sleep well at night.
😬 Meme time
And that's it! Please let me know if you liked it, what I can improve, and if you think this newsletter could help a friend, please send it to them!
Federico
Please remember that everything written in this newsletter/website is for educational purposes only and should not be interpreted as financial, legal, or tax advice. The opinions, analyses, information, or recommendations expressed here are solely my own. Remember that financial decisions involve risks and should be made based on your own personal circumstances and after consulting a qualified professional.