michael eraklis kashioulis
United Kingdom
11 months ago
πŸ”” End of August performance update πŸ”” Hello copiers, as August comes to an end I wanted to give an overview of whats happened this month. We finished August at -0.67% which brings us to +9.16% YTD. This follows last years gain of 31.76%. Early August was troubling for most investors long across many markets as fear gripped investors and saw huge swings into the red - and we were no different. We saw the Dow drop over 1000 points and the Nikkie drop more than 12%! This drop was repeated with the likes of the ftse100 and the nasdaq seeing a similar fate and sell offs occuring with weak data and fears of a US economy that would cool rather than grow. This led to a lot of investors jumping ship of some quality stocks, and fear taking over. We held tight across all our positions and saw a lot of recovery. However, china dragged us down and offset gains from other regions. In the UK this was supported by further positive inflation data that supported the notion of an interest rate cut being on the table. This then played out well with the BoE cutting rates for the first time since their war on inflation began. I continue to keep exposure to the UK and plan to for the remainder of the year. Later in August more positive data started coming out from various other regions too, with US inflation staying in the 2.5% region and investors now looking at a September rate cut. This seems highly likely as Powell mentioned at his talk at the Jackson Hole conference that the time had come for a change policy. Based on all this, I think a 0.25 cut in the coming month is the most likely scenario as a 0.5 cut may be too aggressive for the fed initially. But let’s see what they decide…. The Eurozone also saw more positive inflation data, dropping to a new low for the previous 3 years, landing in at 2.2%. Overall we are starting to see the start of a global shift in policy around rates, and with inflation now, over a number of months in a steady region, I expect a cycle of rate cuts to continue into 2025. This will impact a variety of sectors and the portfolio is positioned to take advantage of this. I’ll continue to adapt the portfolio to meet these shifts in policy whilst keeping a medium to long term perspective. Please note this is not a short term portfolio. To highlight some specific positions this month, we have seen Spotify continue to perform well for us and is one of our largest positions still. After posting another quarter of profit at the end of July, we could see more growth here if this profit making continues. The company has a solid moat around it, users are growing and they are paying more. On the flip side, Southwest Airlines is struggling with poor results last month. What we need to see here is a change in their old habits, which seems to be starting with them changing stance on assigned seats. They also have Elliots up there back pushing for change so hopefully we’ll start to see it soon. Part of the issue has been out of their control with the IT outage recently and the need to reduce prices to fill seats. Overall I am currently confident in our strategy for 2025 and will adjust accordingly. Thanks Michael
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