Tag: Dow

Responsible Investor Portfolio Update, August 22th, 2020 | $TCEHY $NEM $BK $SYF $CLIX $GRUB $PCG $LVMUY $LRLCY $PEUGF $ELC.MI $WBD.MI

This is a market of contrasts. On the one hand we have increasing Covid-19 numbers all over the world and particularly in Europe where infection cases are going back to April-May levels, and on the other several bullish signals, the most recent one to note being the existing house sales in the US which grew by 25% in July – a rate not seen since 2006.

In the meantime the candidacies of Joe Biden and of his prospective VP Kamala Harris have been formalised at the Democratic Convention and the US stock market did not have a negative reaction. In the past there used to be many articles about how a Democratic government would be unwelcome for corporate America whereas positions seems to be more open to a leadership alternative to Trump of late.

It was a mixed week for the stock market: the MSCI World was flat, Europe was down 1.8% (with Italy loosing 2.42% and the Nasdaq Copenhagen a meager 0.12%) and the US indices were up with the S&P500 growing by 0.7% and the Nasdaq by a whopping 2.7%, whereas the Dow ended the week flat. The Dollar recovered about 0.58% over the Euro.

We have made one purchase on the RI portfolio this week, a relatively new ETF which invests in e-commerce while shorting the bricks & mortar sector. It is basically a combination of two other ETFs I have watched (and still own in another portfolio), $IBUY and $EMTY, and goes by the ticker of $CLIX. Thanks to its long and short positions it adds a lot of alpha to a signle investment: it is up 87% YTD, widely outperforming all the US stock market indices.

Our $SQQQ position hit the SL price at the beginning of the week but I expect that it is more of an arrivederci for this hedge. $TCEHY gapped 7% higher and looks like a break-out is around the corner. With gold recovering most of last week’s losses, $NEM was up 2.7%. On our watchlist we have stocks like $HUBS, $JD and $CSGP.

The table below summarises the portfolio performance since inception.

2000821 RIP

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$SQQQ as a hedge proved to be a winner

Over the past two weeks the market has been quite choppy, especially intraday, but overall it has continued to hold. In fact, the Nasdaq has gained 4.4% and the S&P500 1.1% while the Dow was basically flat at -0.2%.

The difference in performance can be explained by the stocks which compose these indices, with the Nasdaq obviously being packed with many technology stocks which have been outperforming most indices. To give a couple of examples, one of the technology ETF $XLK is up 5.1% this past two weeks, and the so called FAANG stocks are all above 4% with $NFLX up 9.4%.

The relative lack of technology stocks in the European indices, which are dragged down by many bank stocks ($XLF), is the main reason why the European stock markets have been laggards. The financial sector was already suffering from the dovish monetary policies of various areas of the world, with negative interest rates in Japan and Europe for example. The pandemic has only increased their pain as money printing continued everywhere, including the US.

Some say that March 23rd is when the markets bottomed: since then the 3 main US indices have recovered a lot of the previous losses due to the pandemic crisis with a gain ranging between 27 and 31%, while the European stock market has only rebounded by 14%. When they say that it is a market of stocks rather than a stock market, what they mean is that you have to pick the right indices if you want to invest in ETFs, or the right stocks if you want to have more chances of beating the market.

Here are my top 3 winners for these past two weeks:

$SQQQ +6.96% (this is a hedge)

$AMAT +5.07%

$BMY +4.51%

The earnings seasons is not over but its pace is certainly slowing down with a lot fewer companies reporting earnings next week: the one I will be watching most closely is $BABA on Friday.

If you want to see which stocks, ETFs and currencies I own in my eToro portfolio, please follow this link.

Have a great weekend everybody and invest responsibly !