Alfonso Fernandez Pajuelo @JAGOPER: "Hi, I am sending a..."

Peru

Hi, I am sending a portfolio update for July. My portfolio returned +4.67% for the month, while SPY was roughly flat, down about 0.8%. July was less about a single narrative and more about dispersion inside mega cap tech, with the Fed holding rates in a hawkish decision, earnings season splitting communications, software and cloud names between rallies and selloffs, and a semiconductor correction and oil spike adding to the volatility. It was a stock picker's market more than a directional one. As covered in prior updates, we exited $CVS (CVS Health Corp) (CVS Health Corp) and trimmed $UNH (UnitedHealth) (UnitedHealth) after both reached their target return and converged toward the average price target set by the banks covering them, reducing the margin of safety in holding them further. We redeployed that capital into our highest conviction Mag7 names, $AMZN (Amazon.com Inc) (Amazon.com Inc), $MSFT (Microsoft) (Microsoft) and $META (Meta Platforms Inc) (Meta Platforms Inc). This month we are maintaining that same strategy, finding the best entry opportunities in $GOOGL (Alphabet Inc Class A) (Alphabet Inc), $META, and $NVDA (NVIDIA Corporation) (NVIDIA Corporation), the three names offering the strongest combination of quality and reasonable valuation in the portfolio right now. Alphabet trades near 17x trailing earnings versus a ~26x average over the past decade, one of the largest discounts to its own history among the mega caps we track. Cloud momentum remains exceptional, with Google Cloud revenue up 82% year over year and a backlog of $514B, and Berkshire Hathaway's recent $10B stake is a notable smart money signal. The negative free cash flow quarter, its first since the 2004 IPO, reflects front loaded AI infrastructure spend rather than deterioration in the core business. Meta remains a top pick despite last week's EPS miss of $6.18 versus $7.17 consensus, which we view as a valuation reset rather than a change in the underlying monetization trend. The stock now trades around 21x earnings versus its own ~26x average, while ROIC and margins remain among the best in large cap tech. Nvidia continues to be the clearest direct beneficiary of AI infrastructure spend. After the recent sector wide semiconductor correction of over $1 trillion in combined market cap, it trades at a forward P/E in the low 20s with a PEG below 0.5, among the cheapest multiples relative to growth in its history. We view the recent weakness as technical rather than fundamental. We continue to exit positions once they've closed their valuation gap and rotate that capital where the market is still mispricing durable earnings power. That discipline is what guided every move this month.

Not investment advice. The author may have financial interests in the mentioned instruments.