Our Biggest Gainers & Losers of the Day in the $100,000 Build Portfolio

For the 29th August 2024:

No prizes for guessing my biggest loser today.

Nvidia played out almost exactly as we expected & my plan stays mostly unchanged. If you missed the deep dive on the Nvidia drop you can read it here.

Price fell at market open. Recovered a little before an aggressive sell off in the last few hours of the day. I’m a little surprised (disappointed?) we didn’t see a 10%+ drop, if I’m honest.

Nvidia is my third largest position in the portfolio so if I’m going to commit even more & buy the dip I want to make sure it’s done with selling off to minimise drawdown & maximise gains.

After seeing the volatility today, trading in a range over 6%, I’d like to see price consolidate & break above the EMA to let me know we’re ready to make a move up again.

And if the dump in Nvidia’s scared you off completely & you’re either thinking about selling or missing the dip, take a look at the revenue & earnings growth the last few years….

I think that speaks for itself. If they can keep even close to that level growth we’ll likely see them take the number 1 spot for market cap again.

I’ve also been slowing building my position back up in TQQQ (an index that aims to 3x the returns of the Nasdaq) after taking profits already this month. I buy on the red days which has been helped by Nvidia taking a dive. That’s because Nvidia makes up around 8% of the index so they’ve got a pretty heavy influence on performance.

Because it’s an it’s an index I get to buy Nvidia at a lower price while also spreading my risk across lots off other stocks too. If you wanted to de-risk even more more, I’d look at QQQ which doesn’t have any leverage so you can hold over the long term.

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The rest today’s losers all have something in common. Can you tell what it is?

They’re all Chinese stocks. China won’t let me catch a break.

So why are all they all down at once? And does it mean for the portfolio?

First of all, the amount I talk about China & Chinese stocks you’d swear I was all in. But they actually only make up just over 4% of my portfolio.

I’m happy to build it up to 10% of the portfolio because it is a risk but it’s a risk worth taking, in my opinion.

The upside is huge & dividends are delicious. We’re talking up to 11% dividend yield on some stocks.

And even with them all taking a dive today, all of my positions are still profitable. Some up to 9% in the green.

But they can’t all be falling in sync for no reason. What’s happening?

It’s that shaky Chinese economy back at it again.

The International Monetary Fund (an org made of 190 countries to keep track of what everyone’s up) just slashed its 2024 GDP growth forecast to 4.6% (down from last year’s 5%).

The real estate market is looking like a fixer-upper. Investment is expected to drop by over 60% which is less than ideal if it comes to fruition.

Consumer prices are actually dropping which tells you domestic spend is falling. Youth unemployment is so bad, they’ve stopped reporting it.

Add to that a yuan that’s hitting a 16-year low & an aging population, you’d have to a madman to invest in anything China.

Or would you? Could you not be a sensible investor with an appetite for risk?

Hear me out.

This could be the perfect time to get in on the ground floor.

With the market down & the yuan at a 16-year low, stocks are more affordable than ever. You can buy great companies at huge discounts.

And the Chinese government isn’t going to sit back & watch it all fall apart. They’re rolling out major stimulus measures, interest rate cuts & support for the housing market. Those three things should be enough to fuel a rebound.

And don’t forget, China is still the world’s second-largest economy with a huge consumer base & manufacturing capabilities second to none.

There’s a reason most things in your house say “Made in China”

When the comeback happens you’d of missed out on a good chunk of the gains buying into the FUD (fear, uncertainty & doubt)

If you can stomach the risk, have a long term perspective & use a sensible portion of your portfolio, I think it’s worth a go.

That’s all! See you same time tomorrow 👋

P.S Hit reply & let me know what you thought of today’s newsletter. All feedback is welcomed ❤️