Battle of the Giants [Q2 2023 Portfolio Update]
The content of this post, or any post on Stumbling About, is for informational purposes only and does not represent investment advice. You should do your own research before using any of the information that we share, and especially before investing.
The usual context setting
My portfolio is primarily based on a Long Trend Momentum model that I created called Farfin. You can learn more about Farfin here. In addition, I will usually also have a relatively small investment in broad market ETFs, concentrated mostly in the Vanguard Total Stock Market Index ETF (VTI)1.
The combination of these typically results in my investments based on Farfin being 90%+ of my portfolio. However, I will opportunistically pick up other stocks when the market calls for it. As of the end of Q2 2023, my portfolio was roughly an 80%/20% split between Farfin and non-Farfin, respectively.
High level quarter summary
Results2: The overall portfolio was up +14% for the quarter, harnessing that Jackie Wilson and moving higher and higher!
Market Results: As a reference point, the market (VTI) was up +8.3% for the quarter. I look down upon thee, young market. Pitiful.
Buys: No new buys for me this period. Keeping it boring as it should be.
Sells: As I mentioned in last quarter’s post, I sold off Schwab and First Republic Bank — an ill-fated adventure 😣
Top Holdings: DexCom remained my #1 holding at roughly 33%, and here’s the full top 5:
DexCom (DXCM): 33.1%
Broadcom (AVGO): 30.3%
Inspire Medical Systems (INSP): 5.7%
Twilio (TWLO): 5.7%
SolarEdge Technologies (SEDG): 4.1%
Top 10 holdings cumulatively: 92.2%
Below is a pie chart of my top 10 holdings for those that enjoy visuals.
Lowlights and Highlights
Lowlights
In general, that is generally speaking, I view the dollar as a generally stable and generally reliable asset. However, when dollar and general are combined, they’ve been anything but stable and reliable as of late.
I hope that reading that last paragraph for you was as painful as holding Dollar General has been for me.
With a potential recession around every corner, consumers in large amounts of debt, inflation ripping through the very fabric of our nation…..dollar stores still can’t catch a break. I thought better of you Dollar General. I really did.
The other more impactful low performers this quarter were SolarEdge and EPAM Systems. These are new holdings this year, and apparently have no idea how to make a good first impression.
SolarEdge is a wildly volatile stock — a roller coaster ride of heart-wrenching joy and sadness. This year its stock price has been caught between the promise of solar as an energy source, the rising costs impacting the industry, and US government investment in US solar. (remember, SolarEdge is based in Israel so won’t be seeing them $$$). I still feel pretty good about this one all in all, though it’s hard to tell how long the current pain will last.
EPAM is about 65% off all time highs (ouch) and while it continues to be a strong executor has gotten hit from a couple different angles. First, a lot of the workforce that it used was based in Ukraine and Russia, and the war there that started last year threw its stock price off a cliff. Next, in 2023 concerns about the impact that generative AI will have on its business are weighing it down. Strong company, sucky macro conditions, and only time will tell. We’re rooting for you, EPAM!
Here are the 5 bottom feeders’ returns for the quarter (full year returns in parentheses):
EPAM Systems (EPAM): -24.8% (-31.4%)
Dollar General (DG): -19.1% (-30.9%)
SolarEdge Technologies (SEDG): -11.5% (-5.0%)
Twilio (TWLO): -4.5% (+29.9%)
NextEra Energy (NEE): -3.1% (-10.1%)
Highlights
It feels so good to have highlights again…for three quarters in a row I might add!
Broadcom made me ever so proud this quarter. It both continued its normal course of solid performance AND decided to jump on a little wave that I like to call AI. Broadcom noticed what Nvidia was up to and said “why not me?”. Well done, Broadcom.
With this ~36% surge this quarter, Broadcom continues to (aggressively!) threaten Dexcom for the top spot. Dexcom has held that ranking for years now, but it just goes to show that you can’t rest of your laurels.
And across the way, Meta kept doing things that Meta does…i.e., crushing stock performance. This surge has been so quick and so massive. And I ain’t gonna hate on it. 💪🏽
As for the overall portfolio, here’s the top 5 quarterly best performer list (full year returns in parentheses):
Inspire Medical Systems (INSP): +38.7% (+28.9%)
Broadcom (AVGO): +35.9% (+57.1%)
Meta Platforms (META): +35.4% (+138.5%)
StoneCo (STNE): +33.5% (+35.0%)
TransDigm Group (TDG): +21.3% (+42.0%)
And once again, there is TransDigm being awesome.😮
Looking to the future
Overall: 2023 continues to be awesome, nearly at the point of erasing the nonsense that was 2022. The market is not far off from all time highs, and I’m excited to see it get there. Keep at it, Mr. Market!
To sell: The stock that’s on the radar to sell in Q3 is Meta. I’m hoping to hold it until October to get them nice capital gains treatments, but the price is getting a bit spicy for my taste.
To buy: I have a few stocks on my watchlist but don’t plan on making any buys for the foreseeable future. I am watching some of my energy and HVAC holdings to see if putting a little more in makes sense, but am hesitant right now.
Oh, and if interested, you can see my whole end of Q2 portfolio here — these are all my holdings, along with performance for the quarter. Enjoy!
The content of this post, or any post on Stumbling About, is for informational purposes only and does not represent investment advice. You should do your own research before using any of the information that we share, and especially before investing.
Throughout this and other posts, when I refer to a stock’s performance relative to “the market”, I’m using the Vanguard Total Stock Market Index ETF (VTI) as the proxy for “the market.”
All of my returns are calculated using time-weighted returns.