30 July 2024 marked the eighth anniversary of the blog, but due to work commitments, I had decided to post this two days earlier.
My anniversary blogposts had somewhat become a keynote of sorts, filled with the goings-on of the market and economy, some cliché advice and an occasional preaching of our investment philosophy.
For this round, I will share firstly on the three buys that we made in the first half of 2024 and the rationale behind them (with some takeaways for your learning). Secondly, I will share a bit on where our step-down journey is at, and lastly, a glimpse of my probable next work.
The Glorious Three
Sounds like a bad tag line but I needed to give it like what others gave the terms “Magnificent Seven”, “FAANG”, etc. So, what are our Glorious Three stocks for the first half of 2024?
#1: Apple
At the end of 2023, Apple was poised to hit USD 200, but alas it was not to be. Then due to a slew of bad news ranging from weak iPhone sales, ban of iPhone’s use in certain quarters in a certain country, and the perceived “same old” new products, the price went down and languished to a low of USD 164.08 in mid-April 2024. Then after a positive 2Q24 report along with news of share buybacks, it rose again, and further turbo-ed with the introduction of Apple Intelligence, also called AI.
I had indicated here that we had added some positions to Apple at USD 165 when it hit our targeted buy price, and as of 26 July 2024, the price had risen 32.1% to USD 217.96. Never mind the lawsuits brought upon by regulators and authorities; never mind the deemed “nothing new” product and service ranges, and never mind the negative news surrounding it, for the fundamentals of Apple are still strong in my opinion currently, given the wide moat of number of users and their adoption of the ecosystem.
The lesson here is if a fundamentally strong counter is down due to probable short-term reasons, or being dragged along with the rest, it is a good time to relook and enter at a determined price for averaging.
#2: Salesforce
In end May 2024, Salesforce, a cloud software vendor, reported a revenue of USD 9.13 billion. However, this fell short of the US 9.17 billion expected, and despite its earnings per share of USD 2.44 beating the estimated USD 2.38, the share price fell from USD 27x to around USD 21x.
Salesforce was not in my investment radar but rather an opportunistic trading play. Like the case of Apple, Salesforce was battered just because of certain bad results and news while still holding onto relatively good fundamentals. Thanks to a YouTube video commenting on it, and after quick research of my own, we initiated a trading position at USD 215.66. As of 26 July 2024, the price rose to USD 262.71, a 21.8% increase. The target price to let go of Salesforce is between the USD 280 to USD 290.
The learning points here? There are two: One, fundamentally good companies’ prices do not stay low for long, for eventually they will rise back to their (perceived) value. And two, sometimes you could get some tips and “a-ha” moments by reading or watching other sources and opinions, and by combining your own analysis, could facilitate your next investing or trading decision.
#3: Nvidia
This company needed no introduction, and it is still the talk of the market as being the darling stock in the AI revolution. While knowing about its “to the Moon and Mars” rise over the last few years, I did not really look at it, until someone had provided me a tip back in early March 2024. Just like the case for Salesforce, I did my fundamental analysis and although I felt Nvidia’s valuation was high in my opinion, its near monopoly and first mover advantage in the AI processor scene, plus the lackluster performance of its other competitors, made it a compelling case to enter, which we did at USD 935.50 (pre-split) a few days after receiving the tip.
Subsequently, on 10 April 2024, TSMC, one of the largest chip foundries in the world, posted a jump in their March sales. With Nvidia as one of its major customers, this jump could translate to a highly possible revenue jump for Nvidia in its coming reporting, and we averaged down at USD 867.17 (pre-split) on the same day, taking advantage of the price weakness. After splitting, we entered again in June at USD 122.50, and in July at USD 118.00. Initially a trading play, Nvidia had shifted over to our investment portfolio.
The main takeaway for Nvidia is more on the associative investing which I had said about a few times before, which in this case the fortunes of TSMC are positively correlated to that of Nvidia’s (and Apple’s, too). By creating a relationship of sorts among the companies and their sectors and industries, we can see the symbiotic links and identify opportunities more clearly.
Step-Down Plan Status
Attributing to the bull run (partially due to the Glorious Three) and the liquidation of two investment-linked plans (which were not factored in our initial step-down planning), our Bedokian Portfolio’s projected year-end value was surpassed by 11.6% by the time of this post. It is great that the target for this year had been reached at this point, but such growth cannot be expected every year, for there will be downtime along the road to our step-down goal.
Hence, we would view this as a growth buffer that could be cushioned against future drawdowns. As we had stated here our assumed growth is 4% annually with capital gains and dividends, which is a very conservative estimate, and it is a number that can be easily averaged even as a diversified portfolio. For reference, the annualized performance for equity indices like the Straits Times Index and the S&P 500 over a 10-year period was 4.24%1 and 12.86%2, respectively.
Future Writing Plans
As you may have noticed in my eight years of writing, there are some issues and points which were written again and again, like a broken record. Things like the psyche of the investor, diversification, rebalancing, etc. are oft mentioned topics. Yes, these may be boring, but they are also necessary to keep reminding oneself in the journey of investing.
I had mentioned here that I might be writing about a trading portfolio either as an additional chapter in future editions of The Bedokian Portfolio, or as a companion e-book. On top of this, I have an additional plan of coming out something on advanced investing. When will these be published is not confirmed yet, but I will announce it on this blog once they are done (maybe some months or years later).
And lastly, back to the blog, you may have noticed that I had introduced more pictures (mostly AI generated) in my posts. This is one way to add some graphical flavour on an otherwise monotonous-looking wall-of-text, or shall I say “beautifying” the blog. Hope you like this new minor modification.
Cheers to all!
1 – SPDR Straits Times Index ETF factsheet. 30 June 2024. https://www.ssga.com/library-content/products/factsheets/etfs/apac/factsheet-sg-en-es3.pdf (accessed 28 Jul 2024)
2 – SPDR S&P 500 ETF factsheet. 30 June 2024. https://www.ssga.com/library-content/products/factsheets/etfs/us/factsheet-us-en-spy.pdf (accessed 28 Jul 2024)
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