This week's live trading - 20241020 (US stocks edition): Time to feast on the big pie?

Overview:

This week, the S&P 500 rose 2.20%, while my actual portfolio net value increased by 1.74%.

Year-to-date in 2024, the S&P 500 has risen 22.95%, and my actual portfolio net value has increased by 12.34% (starting net value was 1.26, current net value is 1.41).

Trades:

Sold all TLT; sold all YINN; sold all BIL

Bought an equivalent amount of MSTR

Holdings:

Apple 18.6%, Microsoft 12.4%, Google 14.7%, Petrobras 12.8%, Bitcoin ETF 14.3%, MSTR 11.8%, 2x Gold 11.6%, Hermès 3.4%, Other/Cash 0%.

Numbers are rounded and positions below 1% are generally not recorded.

Review:

After two weeks of buildup, Bitcoin has officially reversed its half-year downtrend and is now on its way to new highs. Therefore, I decided to adjust my portfolio to ride this trend.

Over the past week, I’ve been thinking about why my Bitcoin ETF holdings significantly underperformed MSTR. My conclusion is that MSTR acts like a 2x leveraged Bitcoin ETF, making it more suitable for allocation during a one-way uptrend. So, I reallocated all my cash-equivalent holdings to MSTR. Luckily, it rose shortly after I bought in.

As with my previous warning when allocating to Bitcoin ETFs, this is an ultra-high-risk asset. Those without experience trading Bitcoin spot should not blindly follow.

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Individual Stocks:

1. Tesla

Will release earnings after the market closes on October 23 (ET). Analysts expect Q3 2024 revenue of $256.74 billion, up 9.95% YoY, and EPS of $0.50, down 5.96% YoY.

Last quarter, Tesla’s total revenue grew nearly 2.3% YoY, returning to positive growth and beating expectations. However, weaker-than-expected auto sales revenue and delays in the Robotaxi event caused Tesla’s stock to drop over 12% post-earnings.

During the recent Robotaxi event, despite Elon Musk’s promises, the lack of key data and details disappointed the market, causing Tesla’s stock to drop nearly 9% in a single day. Year-to-date, it’s still down over 11%.

My take on Tesla now: Unless you’re a die-hard Musk fan, it’s best to avoid this stock.

2. Apple

The latest iPhone saw a 20% increase in sales in China during its first three weeks compared to the 2023 model. This is a positive sign for Apple, which has struggled to gain traction in the world’s largest smartphone market this year.

According to Counterpoint Research, the iPhone 16, launched in September, has outperformed its predecessor, the iPhone 15, in China. Consumers still favor higher-end models, with Pro and Pro Max sales up 44% YoY.

While it’s only three weeks of data, it suggests Apple’s new products are performing better than last year’s.

This "has-been" company, often mocked online in China, just hit another all-time high. Awkward. Smart money and China’s wealthy clearly know what to choose.

3. Microsoft

To fend off hostile takeovers and protect CEO Sam Altman from external interference, AI leader OpenAI plans to restructure from a nonprofit to a for-profit public-benefit corporation.

Reports indicate OpenAI recently closed a $66 billion funding round, valuing it at $157 billion—making it the second-most valuable U.S. startup after SpaceX. Analysts say allocating equity will be a major challenge during the transition. As OpenAI’s largest investor, Microsoft is likely to secure a significant stake.

Conclusion: Musk must be fuming over the nonprofit-to-profit shift—he left OpenAI over this issue. Microsoft is about to win big. Microsoft at $410 is a small dip worth buying.

4. Google

Google is reorganizing its AI division, moving the Gemini app team to DeepMind to boost competitiveness in AI.

On October 17, Google announced the Gemini team would report to AI lab DeepMind under Demis Hassabis, while the Assistant team (focused on home products) would shift to the Platforms & Devices division.

Google also promoted Prabhakar Raghavan, head of Search, Ads, and Commerce since 2018, to CTO. He’ll work closely with CEO Sundar Pichai. Nick Fox, a 20-year Google veteran, will take over Raghavan’s Knowledge & Information team.

Structural optimization is a precursor to a turnaround. Another "has-been" company in Chinese online discourse, yet I recently increased my position to surpass Microsoft. Let’s see what happens in the next six months.

5. Nvidia

ASML’s disappointing earnings raised concerns about the AI sector. But TSMC’s stellar results quickly debunked that. As a bellwether for Nvidia, TSMC’s strength bodes well for Nvidia, which also hit an all-time high this week. I’m bullish long-term, but short-term volatility around earnings is likely.

Bank of America analysts Vivek Arya and Duksan Jang called Nvidia a "once-in-a-generation opportunity," citing its attractive valuation with a 25-year PEG ratio of 0.6x—far below the Mag 7 average of 1.9x.

Goldman Sachs also noted Nvidia’s reasonable pricing, with valuations near its three-year median P/E and relatively low compared to peers.

6. Petrobras

Despite Israel’s lack of retaliation against Iranian oil targets, Rystad Energy’s Aditya Saraswat warned the situation "could change at any time."

He said: "In a broader regional war scenario, Iran-Israel conflict could severely impact gas exports and delay oil projects."

As I’ve said repeatedly, energy is unlikely to rally before the U.S. election. Dividend-focused investors should accumulate at these levels—it’s not expensive, and you can just collect dividends.

For those expecting big gains, President Lula’s antics mean the sector needs 1-2 years to digest. Lower expectations—energy is a great diversifier in a portfolio.

7. Bitcoin ETF

Finally broke through March’s high this week. As I’ve said, I won’t consider selling until $100K—we’re only at $68K now.

I added more MSTR this week, bringing my crypto stock allocation to over 20%—close to my sector cap. No further additions regardless of short-term moves.

This Bitcoin rally isn’t sudden—it’s driven by multiple tailwinds: U.S. elections, institutional inflows, rate cuts, and more Bitcoin ETFs coming. Hold tight, but expect volatility.

Finally, here’s the chart (values in USD):

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This week’s top stock research reports (10 in total) cover McKinsey China Briefing, Kweichow Moutai, Wuliangye, China State Construction, and China Merchants Securities.

Important Disclaimers (Must Read):

1. The buy points, fair prices, and sell points in the chart are calculated using my proprietary algorithm. There’s no fixed formula—they’re not absolute or guaranteed, just aids for my own judgment.

2. If a price point has two values, the lower is the floor and the higher is the ceiling. Which one I use depends on my subjective view and understanding of the company—no fixed standard.

3. Blue/red highlights are personal reminders to watch when a stock nears buy/sell zones. Doesn’t mean I’ll definitely act.

4. Numbers in the table adjust periodically with price changes and my reassessments. Don’t treat them as long-term references. Even Buffett makes mistakes—what chance do we mortals have?

5. This table is for my personal trading records. It’s not investment advice—don’t ask me what to buy. Your money, your responsibility.

6. Fellow holders of these stocks, feel free to comment and point out my mistakes. Let’s learn and profit together.$Strategy(MSTR.US) $Bitwise Bitcoin ETF(BITB.US)