As we warned earlier at the start of this week, the US stock market was bathed in a sea of red. It was the worst week for the Nasdaq since June of 2022, and the worst week for the S&P since March of 2023.
Consider these factors:
- Underwhelming data from the Jobs Report
- Speculation about the size of the interest rate cut by the Fed
- Conservative to disappointing earnings forecasts by companies – matched by unrealistic expectations. NVDA is a prime example of this. It reported stellar earnings that beat Wall Street expectations and provided a rosy forecast that was stronger than what analysts expected. But clearly the forecast was still not rosy enough for the market. Add the suspicious news by Bloomberg that NVDA might be facing an antitrust suit by the Department of Justice (DOJ), and you have masses of profit taking and selling.
If you look at our DeepCap portfolio’s performance in different time frames, it will reveal steep declines – down 3.52% today, down 12.25% for the week, down 9.59% in a month, and down 1.9% in 6 months. But looking at longer time frames, DeepCap’s portfolio is up 31.26% from the beginning of this year, and up 53.37% since its creation late September last year.
The lesson here? Pick stocks wisely, and then hold them for as long as the factors that made them amazing picks still hold true. Only then will it be more probable to beat the market.