Christian Schwarzer Velazquez @Khrix69: "🧠 While everyone sells in..."

Spain

🧠 While everyone sells in panic, we rotate into quality 🔥 Our portfolio has been reorganized today and we have rotated towards the highest-quality and most undervalued stocks in the market today. While the market is showing Extreme Fear, the indexes have barely corrected a miserable 3% from highs. Although this is true, what many investors are not seeing is that this correction has been much greater than that 3%. The markets barely correct because the large companies that move the indexes — $NVDA (NVIDIA Corporation), $MSFT (Microsoft), $AAPL (Apple), $AMZN (Amazon.com Inc), $GOOGL (Alphabet Inc Class A) — have barely flinched in this correction. Although it is true that $META (Meta Platforms Inc) is, in my opinion, the great opportunity among the 7 Magnificent and the one that has corrected the most. Even so, it does not enter the portfolio for performance reasons, since due to opportunity cost I see much better opportunities right now in the market. That said, as I was saying, the market has barely corrected, but market breadth has worsened significantly. Many companies have suffered drawdowns of more than 50% in just a few weeks, high-quality assets and companies such as $NBIS (Nebius Group NV), $ASTS (AST SpaceMobile Inc), $DUOL (Duolingo), $RELY (Remitly Global Inc), $CELH (Celsius Holdings Inc.), and even $TSLA (Tesla Motors, Inc.) has taken a big hit these days. This means that what we see in the $NSDQ100 and the $SPX500 is a total decoupling between the total market and a few companies that remain unaffected. Let’s remember that the top 10 companies in the $NSDQ100 make up more than 50% of the stock index. Today I saw excessive panic in many companies that I have in my portfolio and that I follow. And as I have said in previous posts, there is great virtue in not adding new companies to your portfolio: the best ideas are already in your portfolio. Therefore, we have chosen to add many companies from our portfolio at discount prices, strengthening positions. My conviction in my current portfolio is TOTAL. I feel that there is no better portfolio in terms of QUALITY / PROFIT / RISK. We have the best companies, those that are best positioned to capture growth over the next 5 years in terms of digitization and AI. Then we have $ASTS, where we are basically buying the next space infrastructure, with entry barriers practically impossible to overcome. By partnering with telecommunications companies instead of competing against them, I foresee that $ASTS will be an investment for the next decade — one of those stocks that we will look back on in 10 years and say: if only I had invested even a thousand dollars in that stock… During this decline we have added positions in $MELI (MercadoLibre Inc), betting on digitization and e-commerce in LATAM; $SE (Sea Ltd-ADR), betting on digitization, e-commerce and banking penetration in Southeast Asia; and we have added to our beloved $CELH at these prices after having sold 50% of the position at $62–$60 almost perfectly, after seeing signs of exhaustion in the price technically and not having a safety margin fundamentally. At these prices we are positive again and see wide room for upside potential. Many interesting companies on the radar that we have chosen not to enter: $RELY, $INPST, $DUOL, $FOUR (Shift4 Payments Inc), $TOST (Toast Inc.), $CAVA (CAVA Group Inc) All of them magnificent, but simply my conviction in my portfolio is such that I prefer to continue adding to my existing companies rather than adding a new one. Having portfolio companies at fire-sale prices, I see no reason to continue adding new ones. Finally, unfortunately, after a long time, we ended up liquidating our entire position in the IT sector. A sector that went well for us with $GLOB (Globant SA) when we made a +45% trade before it fell, and we ended up rotating fully into $DAVA (Endava plc-ADR). My thesis was clear, my conviction intact, and I still have my doubts about whether I am making the biggest mistake of my life selling this company, because if I am right it could be a 10x from these prices. But I have lost all confidence in the company: the KPIs continue to decline, demand does not return, and doubts grow. I have imposed on myself not to return to the sector until I see technical reversal both fundamentally and technically. If this happens, we could re-enter, because if the thesis is correct — I repeat — it is a Ten Bagger from the $7 it trades at right now. The latest results were the straw that broke the camel's back: backlog at all-time highs, but contracts are not being executed nor translating into revenue. We will wait and watch closely. Soon I will talk about our new position in the portfolio, where I have entered strongly for $DAVA and in which I have greater conviction — both technical and fundamental —: $SE A hint: it is very similar to $MELI, but in its geographical region. Exquisite KPIs, TAM, growth, ROIC and tailwinds. Without further ado, I say goodbye. I am sure that I have prepared the portfolio to take it to a new all-time high, if the market accompanies. Best regards. Christian

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