Victor Pedersen @Miyoshi: "Hi everyone, The portfolio just reached..."

Denmark

Edited

Hi everyone, The portfolio just reached a new all-time high, but I am taking a more cautious stance given the current market signals. As mentioned in the last update, the environment feels similar to the mania of 2021. Crypto is surging, stocks with high short interest are jumping, anything related to AI is rallying, meme stocks are back, and SPACs are gaining traction again. It’s unclear how long this momentum will last or when sentiment might flip, so I’ve trimmed risk and now hold a 65.4% net long equity position (adjusted for hedges). It's also no secret that I view large caps as extremely overvalued compared to small caps, and the portfolio reflects that view. I wanted to share a few key points from a recent Wall Street Journal article that highlight this imbalance: • The five largest $SPX500 companies are now worth nearly 5x more than the entire Russell 2000. • $NVDA (NVIDIA Corporation) alone, at a $4.21T market cap, is valued 65% higher than all Russell 2000 stocks combined. • Over the past decade, small caps have returned just 6.6% annually, lagging large caps by the widest margin since 1935. On to our portfolio: $U (Unity Software Inc.) has gained positive momentum. The main driver is growing strength in Unity’s Grow Solutions segment, which helps game developers attract users and monetize their games. This business is central to Unity’s turnaround, and recent updates are encouraging. Unity Vector, the new AI-powered ad platform, is already making an impact. In Q1, it delivered a 15–20% boost in performance for advertisers. That kind of early traction is why analysts are starting to pay closer attention. Separately, $XYZ (Block Inc.) has been added to the S&P 500. S&P Dow Jones Indices announced that XYZ will join the index at the open on Wednesday, July 23. The stock rallied over 10% after hours on the news, largely driven by index fund buying. Portfolio earnings are coming up over the next couple of weeks. These will be key in gauging how companies are holding up in the current environment. I’ll be watching results and guidance closely for signs of momentum, or any early cracks. As always, thank you for copying.

4 Mentioned

SPX500

NVDA

NVIDIA Corporation

Unity Software Inc.

XYZ

Block Inc.

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