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TOPIC: June was another month of relatively flat growth

June was another month of relatively flat growth 2 weeks 6 days ago #1469

  • mrsimple
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Hey Traders!

June was another month of relatively flat growth, with the portfolio finishing at +0.78%. The markets still seem to be quite hesitant as we venture into uncharted territory.

Non-farm payroll data in the US this week was a cause for optimism as more jobs were added than expected (850,000 vs 720,000 expected). However, data from all over the world is continuing to show high levels of consumer and producer price indices rising. With so much money pumped into the system and with many markets reaching all time highs we should prepare and keep an eye on a deceleration. I do not believe that is going to manifest anytime soon, but overheating the economy with stimulus is a very difficult balancing act. Despite this, the Fed continue to state that the inflation metrics at the moment are transitory, whilst still remaining relatively ambiguous on the topics of tapering and rate rises.

Should the markets take a turn for the worse, I will continue to follow my strategy in this situation which involves the following steps at various thresholds:

1. Hold through short term volatility
2. Add further hedges to the portfolio to slow any decline
3. Close positions and hold cash to minimise more sustained losses
4. Rotate stocks and seek other investment opportunities if we enter a full recession

For now, I am maintaining a few hedges in the portfolio (e.g. $QQQ , $SNAP (Snapchat Inc) and $CQQQ ) to try and steady any volatility, but I will either remove or add to these hedges accordingly as the markets shift.

Some of you will have noticed that I have added $OTLY (Oatly Group AB) to the portfolio. They are embarking on a period of rapid expansion to try and lock down the global market for oat milk products. This basically translates to growth over short term profitability. The attached infographics are from their June 2021 Investor Presentation and illustrate at a high level how this industry has come to life in recent years. Most importantly though, Oatly have a really solid product. However, the barriers to entry are relatively low and I would expect some fierce competition from some of the big players. I am excited to have the stock in the portfolio and it has been included because I think we will witness very strong growth over the next 5 years or so.

As always, I continue to constantly monitor the markets and investment opportunities and will remain proactive in picking out winners and reactive to changing market conditions.

I welcome your questions and comments.

Cheers,
Ed
www.etoro.com/people/eddyb123
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