Eugenio Catone @CatoneEugenio: "Since the start of the..."

Italy

Since the start of the year, my portfolio's performance has been quite underwhelming, especially from April onward. The stock market rally was super aggressive, but I went into defensive mode instead—building up cash and investing in companies with stable cash flows that have basically nothing to do with AI; McDonald's is the primary example. The reason I preferred to play defense is that I’ve always believed the war in the Middle East hasn’t hit the economy the way it should yet, and we won’t see the full impact until the end of the summer. Frankly, I didn't see the semiconductor sector rally coming in early April, but I think it was driven more by irrational speculation than actual logic. Long story short, my opinion is that it is a bubble ready to burst, and it’s been showing signs of cracking for a few days now. On Friday, triggered by rate hike fears, the market had one of its worst days in years, and the exact same thing is happening today. On both occasions, my portfolio did exactly what I expected: it posted a slight gain while everything was collapsing. I’ll probably stick with this approach for a while, because I just don't trust this recent rally. The war in the Middle East is far from over, and we won’t be seeing pre-war oil prices anytime soon. Tomorrow we get CPI data, and expectations are around 4.20%—way higher than the 2% target. With all this going on, I think a risk-off approach is the only logical choice, and that’s the stance I’m keeping, at least as long as market valuations stay this expensive. $MCD (McDonald's) $NVDA (NVIDIA Corporation) $SPX500 $NSDQ100 $MU (Micron Technology, Inc.) ca.finance.yahoo.com/news/asian-shares-mostly-advance-tech-060959070.html

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