Hello everyone!
Last year, we opened our $GOOGL (Alphabet Inc Class A) position at around $150. We saw it run all the way up to $350, at which point I no longer considered it undervalued. Because of that, I decided to sell 20% of our position. Since I wasn't seeing any other great opportunities in the market at the time, I kept most of those profits as a cash position.
Since then we have seen the stock drop down to $300, and since $GOOGL still is our biggest position this drop has dragged our portfolio down, while the drop over the last 2 months hasn't been small, our performance for the year is tracking very closely to the overall market. We are currently down 3.6%, while the broader market is down 3%.
After huge run-ups like the one we saw last year it's actually expected to see corrections like this, and when running concentrated portfolios such as ours it's expected to see a bigger volatility than the broad market.
While seeing red numbers is not fun it's an inevitable part of investing, it's not possible to get great returns without seeing red numbers every now and then, the trick is being able to ignore them and just keep the course.
As for our portfolio, we could see $GOOGL keep dropping for a while, or this could be the bottom, I don't know and I don't need to know, while the underlying business is doing well (and it's doing great!) the price will follow over the long term, so we just need to be patient.
On the bright side, we got a bigger cash position than any other time over the last 4 years and I'm already looking at a few stocks I'd like to buy, but I'm waiting for things to stabilize before pulling the trigger.
Hope you all have a great week.
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Not investment advice. The author may have financial interests in the mentioned instruments.
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