Federico Sellitti @federicosellitti: "Market and Portfolio Analysis –..."

United Kingdom

Market and Portfolio Analysis – 19/01/2026 U.S. markets are closed today for Martin Luther King Jr. Day, but this has not prevented volatility from showing up. At the time of writing, $NSDQ100 is down around 1.5%, while the $SPX500 is close to a 1.2% decline. The main driver behind today’s moves is geopolitical. President Trump has threatened new tariffs on eight European countries in connection with the Greenland dispute. This headline has not affected only the stock market. Cryptocurrencies reacted even more aggressively, dropping sharply before stabilizing in the last few hours and starting a slow recovery. Beyond headlines, one interesting thing I believe is worth watching right now is the level of interest rates. The U.S. 10-year Treasury yield is trading around 4.2%, a level that looks normal today but is very high when compared to the last 15 years, during which yields were typically in the 1–2% range. This matters because a 4.2% yield represents a nearly risk-free alternative for investors. When bond yields are high and stock valuations are above normal levels, investors naturally start to question whether taking additional risk in equities is justified. Historically, and also from a logical standpoint, this type of environment tends to favor companies that generate solid cash flows today rather than companies whose valuations are based mainly on future growth expectations. As a result, high-growth and high-valuation stocks such as $NVDA (NVIDIA Corporation) or $TSLA (Tesla Motors, Inc.) can come under pressure if macroeconomic or political news turns negative. On the other hand, companies with stable earnings and predictable cash generation, such as $KO (Coca-Cola) or $JPM (JPMorgan Chase & Co) , may benefit from this. Of course, I'm monitoring these two (and $AAPL (Apple) ) for our next move. Turning to our portfolio, our largest stock position is currently $ADBE (Adobe Systems Inc) . As many of you know, my approach focuses on buying high-quality companies when sentiment and headlines are unfavorable. Right now, Adobe is under pressure over concerns that it will not perform as well as before in this era of AI. We take advantage of this negative momentum to accumulate a strong business, with strong cash generation, and currently trading at a price-to-earnings ratio of around 17.8, the lowest level since 2011. In an environment where high yields reward real earnings and reasonable valuations, Adobe is currently the stock I trust the most to generate long term profits for our portfolio. Overall, the year has started with a small negative performance, with the portfolio currently down about 1.34%. Despite this, I am comfortable with how things are developing. We have already been able to take advantage of some attractive prices and deploy part of the cash we were holding. At the same time, we are still holding around 51% in cash reserves. If market weakness continues, this would not necessarily be bad news for us. On the contrary, it would give us additional opportunities to accumulate strong companies at better prices. This disciplined approach allows us to improve our average entry levels and position the portfolio for stronger gains once the recovery phase begins. Volatility is uncomfortable, but it is also where long-term opportunities are created. Thanks for reading and good luck!