In July, the decline from June was almost recovered, and the portfolio is now up by €15. However, in percentage terms, this is insignificant with an initial amount of €50,000.
Viewed differently, we have just managed to cover the transaction costs over the three months we have been tracking the portfolio. This is not surprising, as so far only a third of the amount has been invested, and we have incurred significant transaction costs. The high transaction costs are intended to discourage excessive trading.
In this article
The market today
Doubler Portfolio overview
New transactions Doubling Portfolio
Current top five stocks
The market today
If you follow financial news, X (Twitter), or investor forums, you might get the impression that the stock market is cooling off significantly, especially the Magnificent 7, and that there is a rotation from Big Tech to small caps and value stocks.
As always, small movements in these reports are greatly exaggerated. That's why, with Smart Capital, I aim to maintain rationality and calm. How do you best achieve this? By avoiding the sensational headlines and simply focusing on the data.
And then we see that the entire U.S. market has become more expensive again when looking at the so-called Buffett Indicator, which compares the total market capitalization to the gross domestic product.
Due to the strong results reported by major tech companies, the Shiller PE ratio declined slightly, but it still remains at a historically high level of 35.2, whereas the average is 17.5.
From the results I've reviewed, both from our companies and others, I sense that we are dealing with a distorted picture. In the U.S., the numbers are often good, but there are warning signs for the future. In Europe, signs of a slowdown are already visible. We are still in the early stages of the earnings season, and especially smaller companies have yet to report their figures. These companies often feel the slowdowns first, so the picture might still change in August.
The conclusion remains the same as in recent months: we continue to see extreme valuations in certain segments of the market and undervalued stocks in others. While I don't see a general overvaluation of the market, the Buffett Indicator clearly suggests that caution is warranted.
So it’s not surprising that the Fear & Greed Indicator (CNN) shows a neutral position.
Although I experience more greed than fear on X and investor forums.
Returning to the rotation from Big Tech to small caps and value stocks: I think it’s still too early to speak of a genuine rotation. It’s normal for some air to come out of Big Tech, and for now, it seems that the Russell 2000 is particularly benefiting from this shift. This leads me to suspect that it’s mainly passive index investors moving from the S&P 500 to the Russell 2000. If these "passive" investors do this, are they still truly passive investors, or are they active investors who are investing in indices rather than individual stocks?
Doubler Portfolio overview
At the moment, this chart has little significance. The fluctuations appear extreme, but they all fall between -1% and +1%. This is logical, considering that we have only invested a third of the cash; we are still in the process of building the portfolio. Large fluctuations are often due to a single stock making a sudden strong move.
For example, last month we saw that our most recent purchase,