Welcome back to this month's update of the Moby Flagship Technology Portfolio!
If you're familiar with this strategy please skip down to the section labeled, "Performance Overview".
If you're new to this portfolio strategy, its goal is to outperform the market by primarily investing in tech companies that are undervalued, while also taking on less risk!
We do this by building algorithms that use Artificial Intelligence (AI) to find companies with above-average earnings and revenue growth but at normal or undervalued valuations.
As we saw last year, value outperformed growth stocks in a very significant way. And even fast forward to today and investors have really only cared about companies that are growing responsibly and with valuations that are reasonable. Gone are the days when growth at all costs was an actual business strategy.
Nowadays, while growth is important, you need to grow "right". So that's why our algorithms have been looking for stocks that are growing but only at a reasonable price with growing & positive cash flows.
And that's why this strategy has done so well this year! Year-to-date, this strategy has returned 35.1% while the market has only returned ~20.7% (more on this below).
And we couldn't be more proud of how it's performed so far!
For a more in-depth explanation of how this strategy works, just read this post! Therefore, today we're going to cover:
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The portfolio's performance.
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The stocks that performed well and the stocks that didn't.
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This month's trading updates.
Performance Overview:
Let's just say that this year has been amazing for our Flagship Portfolio. It's almost 2x'ing the market while also taking on less risk.
But now that we're done patting ourselves on the back, let's get into what happened.
As we alluded to last update, the AI boom is showing no signs of slowing down. While obvious beneficiaries are companies like Nvidia, this portfolio specifically doesn't own Nvidia -- given how expensive the stock is.
But while the portfolio didn't own Nivida, it did own MPWR -- which is a beneficiary of the AI boom.
And while Nvidia is a great company that we believe in, for the goal of this portfolio, it falls outside of the valuation screen.
However, MPWR still screened positively and that's why we were able to outperform the index this month while also taking on less risk.
Furthermore, our big two winners were JBL & DHI.
While we still like both stocks, the AI has now trimmed both these positions, given how expensive they've become (more on this below but MPWR is still there albeit with a smaller weight). But now, let's get into the specifics 👇
Performance Snapshot:
