This week's live trading - 20240505: Super share buyback and special dividend

Overview:

This week, the S&P 500 rose by 0.55%, while my actual portfolio net value increased by 0.35%.

Year-to-date in 2024, the S&P 500 has risen by 7.50%, and my actual portfolio net value has increased by 0.98% (starting net value was 1.26, current net value is 1.27).

Trades:

None

Holdings:

Apple 16.5%, Microsoft 16.1%, Petrobras 24.4%, Google 4.8%, TLT 21.8%, Bitcoin ETF 15.1%, Hermès ADR 1.4%, Cash/Other 0%.

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

Review:

Three major events this week:

1. Apple's Earnings Report

Apple's total revenue was $90.753 billion, down 4% from $94.836 billion in the same period last year, but better than the market expectation of $90.33 billion. Net profit was $23.636 billion, down 2% from $24.160 billion in the same period last year, but also better than the market expectation of $23.17 billion. Additionally, Apple's board approved the largest stock buyback plan in history: $110 billion!

Whether this earnings report is good or bad depends on the comparison.

Compared to Apple's historically excellent performance, it's definitely not good, as growth rates across various business segments are mediocre, and this trend has persisted for several quarters, which is the main reason for Apple's sluggish stock price recently.

But compared to market expectations, the results are decent. "I thought you'd be worse, but you weren't that bad." This is the so-called "beat expectations." Due to overly pessimistic expectations leading to an oversold stock, the after-hours surge of over 7% reflects a correction of those overly bearish expectations.

Apple's stock price is expected to rebound significantly in the near term, though it's unlikely to reach its previous high of $199.3.

2. Petrobras' Special Dividend

Stock dividends are usually routine, so why highlight Petrobras'? Because many platforms have incorrect data and haven't updated it properly👇

Moreover, Petrobras' dividend amount (regular + special) is staggering, but the payout won't arrive until the end of next month. This portion of the gain is temporarily missing from accounts, so many account data are inaccurate. Personally, I haven't added this back in my statistics. For those who demand absolute accuracy, you can manually add it back.

Additionally, earnings will be released after the market closes on May 13, at which point I may slightly adjust my buy/sell points for Petrobras.

3. Fed's Rate-Cut Rhetoric

The unemployment rate in this report rose from 3.8% to 3.9%, a mere 0.1% increase, but still at a low level. Combined with Powell's remarks yesterday, it's one step closer to 4%, so the market anticipates the Fed might consider rate cuts more seriously.

The non-farm payroll data was surprising. The adjusted prior value went from 303K last month to 315K, showing last month's job growth was already strong. But this month, it nearly halved to 175K, significantly below both the prior value and the expectation of 243K. Under normal circumstances, this would indicate a tightening U.S. economy, but under the Fed's shadow, it suggests the Fed might increase the frequency of rate cuts.

Other individual stocks:

1. Tesla

I said I'd start buying back around $130, but it took off at $140. I didn't bite on Musk's hype, but it seems many in the market did.

I'm still waiting. Things with no clear outcome can easily cause wild stock swings, and the current price isn't a good entry point.

2. Microsoft/Apple/Google

All three released earnings in the past two weeks, with overall positive results. Microsoft is the most expensive, Google the cheapest. For those still bullish on AI's future, Google is the preferred choice. Even the best things aren't profitable if bought too expensively.

3. Bitcoin ETF

Recent market volatility has been intense. I neither added nor reduced positions. Hong Kong's spot ETF has also been approved, and institutional participation will grow. Those with conviction should consider positioning before $68K. Those without should stay away, and definitely avoid settling for mining stocks, as their movements don't fully align with Bitcoin's.

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

Slightly adjusted some company data, overall still bullish.

1. The buy points, target prices, and sell points in the chart above are calculated using my proprietary algorithms. There's no universal formula, and they aren't absolute or guaranteed to be reached (most aren't). They're just tools to help me gauge the current price.

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 judgment and understanding of the company—no fixed rule.

3. Blue and red highlights are warnings to myself that a stock is near a buy/sell zone and requires close attention, but they don't mean I'll definitely act.

4. The numbers in the table may be adjusted periodically based on stock movements and my reassessment of the companies. Don't treat them as long-term references. Even Buffett makes mistakes, let alone us mortals.

5. The table is for my personal trading records and isn't meant to guide your trades. Don't ask me whether to buy something—your money, your responsibility.

6. Fellow holders of these stocks are welcome to discuss in the comments, point out my mistakes, and learn together to make money.$Apple(AAPL.US) $Petroleo Brasileiro(PBR.A.US)