James Capital | Q2 2022 Performance
Hands off continued, but focusing on one theme.
The last three months have solidified 2022 as one of the worst stock markets performances within the last four decades. The SPY is currently in bear market territory (-20% from previous high). This doesn’t really change my investment strategy but it shifts it a bit. I will go into that a little bit later. I exited one position within the last three months. That position was SHOP. While I believe that Shopify is a great company, macro economic trends have changed my stance on this company in the short term. There are also better opportunities that I believe will better serve me. That leaves me with TSLA, FOUR, NVDA, and PYPL as the last four individual stocks that I own. I have not been adding to these positions but they will be held in my portfolio for the foreseeable future. (The full list of my holdings will be updated on www.davieljames.com at the time of this publish.)
So, going forward, how will I change my investment these with the worst stock market performance and the highest inflation in four decades? I will keep an even smaller position of my portfolio in cash. I have increased my investment position. Thinking about it, I’m currently in position where I can take on even more risk. I do no have major responsibilities and no one is dependent on me. Many stocks are currently trading below their intrinsic value and this is the chance to pick them up on the cheap. I’m also fairly confident about my ability to produce cash in the short term due to marketable skills. I’ve also realized that on a scale of probabilities, I might not be able to pick which is the best stock that will produce the highest return from these lows, but if I increase the amount I invest in a basket of stock (index funds, etfs), I should be able to come out ahead.
My long term goal is always to hit a CAGR of 12-13% over my lifetime. I believe that I’m currently still on track to be able to achieve that. My cash position will now be reduced from around 17% to 12% between now and the end of the year. Maybe when the market rebounds I will be able to increase my cash position back to 17% to take advantage of any opportunities that come. I advise you do the same. I’m usually one to shy away from giving investment advice surrounding a specific company or stock but what I would say is that for me, I see a lot of opportunity for growth in the semiconductor industry. I have been slowly adding to my position there as more things get modernized and devices will now become more and more connected and operate almost fully autonomous, semiconductors will be salient to the future of humanity.
As always, thanks for taking the time to read this quarter’s Performance Newsletter. We’ll see you in the next few months for the Q3 2022 Performance Newsletter update.
la vie en rose,
Daviel