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

For the 21st November 2024:

Winners keep winning. From stocks to sports, the guys on top just know how to do it.

Nvidia is Michael Jordan if he was a tech nerd.

They’ve just reported Q3 earnings & the numbers are top notch. But guess what?

Stock price dropped pretty hard after hours. Classic rational investor logic strikes again.

Let’s get into it.

1/ Revenue: $35.08B (beat expectations by nearly $2 billion!)

2/ Data Center Revenue: $30.77B (up 17% QoQ & 112% YoY)

3/ Gross Margin: 74.6% (this beast is practically printing money at this point)

4/ EPS Growth: 16% QoQ & an insane 111% YoY

This is what a home run looks like. So, why the dip?

Everything in AI is priced for perfection. Anything less & Wall street spits in your face. The problem is these earnings are pretty damn close to perfection so I don’t know what more everyone wants. It’s like getting an A & your parents are expecting an A+.

Maybe worse than that. Like coming home from nursery with your macaroni art & your parents are disappointed you’re not a doctor yet…

Spoiler alert! I’m even more bullish now on Nvidia than I was pre-earnings. If they were planning to keep doing more of the same I’d be buying the dip. But here’s the best part.

They’re going bigger & better.

They’ve just rolled out Blackwell. Ok…. great... What’s that?

It’s their next-gen AI hardware platform that blows everything else out the water. We’re talking 4x faster training speeds, 30x more real-time throughput & 25x more energy efficient.

Now this is where it gets exciting.

Blackwell is already sold out for the next 12 months. Everyone wants it. Nvidia need to up that supply output. And wait! There’s even more!

None of Blackwell’s financial impact is even in the Q3 numbers. All those big beats & massive earnings haven’t even included this superstar bit of hardware.

With the demand this thing has already, I don’t see how you can expect to see anything other than insane growth to keep coming out of these Nvidia reports for a little while yet.

Now I’d be lying if I said Nvidia isn’t a little spenny. But that’s OK. There’s value in the price & you’re getting what you pay for here. They’re worth the premium for a few reasons.

1/ NVIDIA has a gigantic competitive moat in AI hardware. With the revenue they’re generating & the clients they have, this is only going to get bigger & bigger. Paying a premium to own part of a company that the competition can’t touch is worth it in my eyes.

2/ Their business model scales beautifully. High margins & growing demand is a match made in heaven.

3/ They’re leading one of the fastest-growing sectors in tech. First place in a sector that’s taking over the world. Why would you not cough up to own part of that?

Most businesses with higher valuations don’t have the substance. Like a Ford with a Ferrari body kit. I’m looking at you Palantir…. Or worse yet based on nothing like GameStop.

Nvidia can back it up with their size & competitive edges.

Yeah, the stock’s down, but nothing’s changed. They’re still the undisputed champ in AI hardware & Blackwell’s just getting warmed up.

Don’t overthink it. Nvidia dips, I buy.

It’s currently my largest holding, making up 9% of the portfolio. No plans to change that any time soon.

For a long term play, NVIDIA is a no-brainer to me.

Not long ago, investors were chasing rocketship startups in hopes of a huge payday.

Boy how times have changed.

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I dumped all my crypto positions.

*Gasps from the room* 🫢

Before you boo me & start throwing tomatoes, let me tell you why.

Crypto’s gone hysterical since Donald Trump became president. Bitcoins up 40%, Solana about the same & you’ve got guys making millions from meme coins about Peanut the Squirrel. (RIP Peanut btw 🙏)

I get it. The first pro crypto president, talks of creating a role in office for someone to focus solely on crypto. It all sounds great. But I like to pay attention to this.

It’s the crypto fear & greed index. My rule of thumb is when it’s in extreme greed, I sell. When it’s in extreme fear, I buy. Simple.

But it can’t be that easy, can it?

You’re right…Kinda. There’s lots of moving parts in crypto but take a quick look at this chart.

It shows the fear & greed rating against the price of Bitcoin. It’s not perfect but there’s enough of a correlation that I pay attention to it. When greed is high, Bitcoin price is usually pretty high & when fear is high, price is low. If you want to check it out, take a look here.

And the rest of the coins have enough of a correlation with Bitcoin that I think it’s reasonable to lock in a profit across the board.

Solana for example, is trading at prices it hasn’t seen since 2021 & guess what lots of these meme coins are built on?

The solana network. See where I’m going with this? Once the hysteria dies down & people aren’t burning cash in funny currencies so will the price of something like Solana.

Do I think this a perfect way to time the top? Absolutely not.

Is it a solid way to lock in some profits along the way & materialise some of the gains? I think it can be

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 ❤️