It’s just ten minutes into the second half, and the team is already showing a much improved performance than the first.
The equaliser that came near half-time was a great morale booster, and I’m glad that the momentum has continued into the second half.
You’re right! This isn’t about a football match at all. Instead, it’s about the excellent comeback my stock portfolio has made since the start of July.
As the portfolio manager, I’m particularly pleased that I capitalised on the weaker market conditions in the first half of the year to increase my positions in existing holdings.
While the amount invested during that period was just a fraction of the entire portfolio, it certainly feels good to see such an early victory.
As illustrated in the image below, with the exception of Parkway Life REIT‘s (SGX: C2PU), all my purchases of SG stocks this year are already in the green, and that’s even before factoring in the dividends received thus far.
The two stocks that stood out in the list are UMS Integration (SGX: 558) and The Hour Glass (SGX: AGS), which coincidentally cut their recent dividends, yet have shown remarkable price performance.
I delved deeper into this interesting phenomenon in a recent article for The Smart Investor, which you can access here.
On to to my US portfolio, I made fewer purchases this year.
However, given the higher volatility of US market, these purchases have rebounded a lot faster from the market’s low in the first half.
Personally, I don’t think that the price recovery is solely due to their business fundamentals.
Don’t get me wrong. These are quality companies, which I believe have tremendous growth prospects over the long-term.
However, the recent price movements are likely more due to investors’ sentimental and expectations.
Let me use The Trade Desk (NASDAQ: TTD) as an example.
Despite achieving a robust revenue and adjust EBITDA growth of 22% and 23% year-on-year in 4Q 2024, the stock was significantly punished when it narrowly missed its internal estimates.
The market reacted sharply to this slight stumble, sending shares lower by 33% in a single day!
Trade Desk price continued to be under pressure for the rest of the quarter until it reported its 1Q 2025 earnings.
The company once again delivered strong growth, with revenue up 25% YOY, and this time, it comfortably beat its own and analyst expectations.
The market, responding positively to the “beat”, sent the stock higher, despite the underlying growth rate being quite similar to the previous quarter.
Then came the ultimate market catalyst: the recent announcement that Trade Desk would be admitted into the S&P 500 index, effective just days later. The stock immediately rocketed, soaring by around 10% on the news.
Such rapid swings beg the question: how much did The Trade Desk’s long-term fundamentals truly shift?
What’s coming up next?
While I’m happy with the second half’s start, I’m keenly aware that market sentiment can quickly sour, and these price gains could evaporate.
The focus must go back to the fundamentals of the underlying companies.
The long game
This isn’t just about one match; it’s about winning the entire league.
In this game of investing, one “match” or “year” might see your portfolio score big, but the “league” – decades of investing – is won through consistent effort.
It’s about having the right players (quality stocks), implementing effective strategies (allocation), and committing to continuous training (monitoring).
The earnings season, now underway, provides the ideal opportunity for this.
This week, I’m looking forward to the business updates from Frasers Centrepoint Trust (SGX: J69U), iFAST Corporation (SGX: AIY), Alphabet Inc (NASDAQ: GOOG), Intuitive Surgical Inc (NASDAQ: ISRG), and Tractor Supply Company (NASDAQ: TSCO).
Stay tuned for my upcoming posts, where I’ll share my insights on these earnings reports.
Discover more from The Fat Investor
Subscribe to get the latest posts sent to your email.