Monday, May 6

The Flagship Tech Portfolio: May Update

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. 

That's so important right now because, profitability growth is almost even more important than pure revenue growth. 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 outperformed the market for the last 2 years running!

But for the first time in awhile, our portfolio actually came up slightly short of the index (more on this below) -- which is totally normal during an individual re-balance period. While we always want to beat the index, we know that it's impossible to do so every time you re-balance. But as long as we're delivering overperformance over a multi-year time horizon, it's a check in the right direction.

Past that, if you want a more in-depth explanation of how this strategy works, just read this post!

Therefore, today we're going to cover:

  1. The portfolio's performance.

  2. The stocks that performed well and the stocks that didn't.

  3. Trading updates.

Performance Overview:

During this period, our job as stock pickers continued to excel. However, our job as portfolio managers came up slightly short of the benchmark.

That's because during this period, our average pick returned 19.7% while the market only returned 12.8% -- which would normally be amazing.

However, because we went overweight on the stocks that didn't perform as well, we ultimately came up a bit short.

So what's the takeaway here? The takeaway is that we took a step in the right direction, but that step wasn't big enough. 

And again, in the long run, a period of performance close to the benchmark doesn't mean much. What means "much" is making sure we're outperforming the benchmark over a multi-year time horizon -- which we most definitely are!

Past that, we made sure to apply these lessons to our newest re-balance (see it below), which has some more diversification to combat the swings we saw from the average in the last period.

If you have any more specific questions about these stocks or our portfolio management process, just message us. If not, let's move on to the new trades!

Old Portfolio:

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