Wesley Nolte @Wesl3y: "𝗥𝗲𝗹𝗶𝗲𝗳 𝗿𝗮𝗹𝗹𝘆 𝗼𝗿 𝗦𝗮𝗻𝘁𝗮 𝗥𝗮𝗹𝗹𝘆?..."

United Kingdom

𝗥𝗲𝗹𝗶𝗲𝗳 𝗿𝗮𝗹𝗹𝘆 𝗼𝗿 𝗦𝗮𝗻𝘁𝗮 𝗥𝗮𝗹𝗹𝘆? 🎅 When I wrote my last update, the market pullback was already underway. Nvidia earnings and US jobs data were the next catalysts. Nvidia printed good numbers and pre-market was green, but the move faded intraday and the sell-off continued. Since then risk assets have ripped higher into the Thanksgiving period. This has been helped by low trading volumes (typical for Thanksgiving week), improving breadth (more stocks taking part in the rally) and a sharp change in rate expectations. 𝙒𝙝𝙖𝙩 𝙞𝙨 𝙜𝙤𝙞𝙣𝙜 𝙤𝙣? Rate expectations have flipped back towards cuts, with Fed comments and recent data pushing investors to price in a better chance of a US rate cut in December. The tech and AI story is still doing most of the heavy lifting. $GOOG (Alphabet) has had a strong run on the back of its Gemini 3 launch, Berkshire Hathaway revealing a multibillion-dollar stake, and headlines that $META (Meta Platforms Inc) is in talks to spend billions on Google’s AI chips. 𝙋𝙤𝙧𝙩𝙛𝙤𝙡𝙞𝙤 𝙥𝙤𝙨𝙞𝙩𝙞𝙤𝙣𝙞𝙣𝙜 During the pullback I rotated out of lower volatility assets into names that are objectively cheap. I sold half of my $EWU (iShares MSCI United Kingdom ETF) position and used that to add to $MELI (MercadoLibre Inc) and $ETOR (eToro Group LTD), and I have since increased my Google position as well. I don't mind any extra volatility because I think these businesses are still priced attractively versus their long-term potential. I’m still holding around 5 percent cash. 𝙒𝙝𝙖𝙩 𝙩𝙤 𝙠𝙚𝙚𝙥 𝙖𝙣 𝙚𝙮𝙚 𝙤𝙣 This week’s jobs data, consumer sentiment and PPI support a “cooling but not breaking” picture. From here the focus is on November payrolls, the next inflation prints around the Fed meeting, and how far AI enthusiasm can run before it starts to look frothy rather than healthy. 𝗠𝘆 𝗽𝗹𝗮𝗻 𝗶𝘀 𝘀𝗶𝗺𝗽𝗹𝗲: stay invested in businesses that still look cheap versus their long-term earnings power, accept the volatility that comes with them, and keep some cash (and low volatility assets) ready in case we do get another wobble.