Loading...

Core Fund Monthly Update

July 17, 2023
3
134
0
Wiko Steyn
Author
Wiko Steyn

#20 of 20 Stocks Added

 

It's very premature in my view to think about or be talking about pausing our rate hike - Jerome Powell. 

There you have it folks, nothing dovish about that statement from the Federal Reserve Chairperson. He basically went on to say they will continue quantitative tightening (QT) and raising interest rates until something breaks. And then they will counter it by printing money again and dropping interest rates. This seems counterproductive to us, playing ping-pong between extremes when your sole purpose is price stability.

For camp pivot, this was another crushing FOMC meeting and we will have to wait another month to see if we might get a Santa Claus rally. All this talk about the Federal Reserve, yields, bonds, inflation and monetary policy in general, might sound very dull but we highly recommend that you get a firm understanding of these concepts. It will certainly benefit your investment journey. The videos linked above will get you going while explaining the current situation and why the world's financial systems are walking a metaphorical tightrope with no safety net. 

 

New Stock Alert

Although we do monitor the situation, complaining about the Fed's decisions is not going to get us to our goal of financial independence. Therefore we continue with our investment journey. After we sold out of Illumina last month we created space for a new company in our Core Fund. Due to the recent drawdown in quality growth stocks (and almost all other stocks), there were quite a few companies to choose from. We really struggled with this decision and below we share some of the companies that were on our radar: 

  • Paycom
  • Block
  • DLocal
  • Intuitive Surgical
  • Intuit
  • Airbnb
  • Zscaler
  • Visa
  • Meta Platforms
  • STAAR Surgical Company
  • Deere & Company
  • Chipotle Mexican Grill
  • BlackRock
  • Enphase Energy
  • Atlassian Corporation
  • Vertex Pharmaceuticals 
  • Palo Alto Networks

After some preliminary research, we narrowed it down to 3 stocks Block, DLocal and Zscaler. We have one large fintech with some crypto exposure, then a LATAM smaller fintech with huge growth and profitability and finally a leader in endpoint security. Although all 3 can certainly claim a spot in our Core fund we could only choose one. We decided to make it easy and evaluate each using our Scorecard and the highest score will get spot number 20. The 3 Scorecards are attached at the top of this article.

Zscaler and DLocal both scored 77. Zscaler is a much more popular stock and certainly a best-of-breed cybersecurity company. Yet, we are going with DLocal for our Core Fund because profitability matters in the current market condition. We feel Block is maybe more suited for the Unicorn Portfolio and will definitely be a contender for our last position in that portfolio. 

DLocal is an all-in-one payment platform connecting global merchants to emerging markets. DLocal is showing a rare combination of very rapid growth & profitability at scale. They are well diversified across clients & verticals, expanding rapidly beyond LATAM to Asia & Africa.

 

Portfolio Update Summary

Big tech got wrecked during this earning season with Amazon, Microsoft, Google, and Meta Platforms all significantly down. Most SaaS companies also have been obliterated (like our Core Fund) due to significant margin compression as well as recession fears. We are adding to our positions in Amazon and ServiceNow and we are starting a new position in DLocal.

Buy $250 AMZN at $88.15
Buy $250 NOW at $355.46
Buy $500 DLO at $19.90

 

Disclosure
This article is not financial advice and is based on the opinion of the author.  This article is not a research report and is not intended to serve as the basis for any investment decision. All investments involve risk and the past performance of a security or financial product does not guarantee future returns. Investors have to conduct their own research before conducting any transaction. There is always the risk of losing parts or all of your money when you invest in securities or other financial products. The $20K in the Core Fund is not real money and only a demonstration of a typical portfolio. This is an actively managed portfolio, where we will buy and sell positions as we deem fit without any regard for taxation. Remember, all selling of stocks triggers a tax event in most countries and it is the investors personal responsibility to always remain tax compliant.
 

 


 


Related Tags:
3 min read
Share this article:

Related Articles

All articles
Top