The State of the US Stock Market: Insights and Predictions

The State of the US Stock Market: Recent Trends and Insights

Over the past six months, the US stock market has enjoyed a period of relative prosperity. However, recent news about trade tensions has cast a shadow over market sentiments, creating a climate rife with fear. Some of the hottest stocks have surged in price, fueling a Fear of Missing Out (FOMO) among investors. The current climate is both thrilling and nerve-wracking, as seen in the portfolio impacts, which have reflected these wild swings—with a YTD performance of 99% and QQQ at 14%.

Recent Portfolio Moves

This past month has seen significant changes in portfolio management:

• Exited KLC: My conviction remains unchanged, but due to substantial losses, I decided to harvest tax losses to mitigate tax burdens. I will reevaluate in a month.
• Exited SPT: Same reasoning as KLC.
• Exited CHA: Again, same strategy.

New Stock Acquisitions

On the flip side, I have added some promising new positions to the portfolio:

• Sweetgreen (SG): After its wash sale window has closed, the price has dropped 83% from its 52-week high. Given the restaurant sector’s challenges, I believe this price offers an attractive entry point. I’m hopeful that the upcoming earnings report will showcase Sweetgreen’s ability to use technology for cost reduction and efficiency, potentially positioning it as a small robotics play.
• FMC: The valuation seems cheap as the agriculture sector has been under pressure. Considering that there may be potential support for farmers from Trump, and knowing that the CEO repurchased shares around $36, this stock looks appealing. However, it’s worth noting that FMC does carry high debt and is susceptible to geopolitical shifts and tariffs.
• ROOT: A pricing model based on driving habits, this auto insurance company presents a good valuation and profitability metrics, with an EV/Sales ratio of 0.7 and 32% annual revenue growth. This stock’s current price is attractive compared to competitors like LMND, but bear in mind it faces disruption risks from future advancements in autonomous driving.

Market Highlights

Among the bright spots:

• CLSK: Riding the tailwinds of the AI narrative, this stock has seen a robust 24% uptick this week and has nearly doubled since my initial investment one month ago.

Market Lowlights

However, not all is rosy. The market currently displays a marked divide:

• Companies well-aligned with the AI narrative continue to soar, while those lacking an AI angle have faltered—examples include FMC, SPT, KLC, GAMB, BMBL, and CRTO. I believe this bifurcated market will eventually correct itself.

Looking Ahead

Going forward, Trump’s tweets and geopolitical developments will likely introduce significant volatility into the market. If we see major downturns, I plan to stick to my strategy from April: remain fully invested, continue harvesting tax losses, and shift toward a more aggressive position without hesitation.

Wishing everyone a fantastic weekend! 🌟

(This is purely a personal account of my investment journey. No investment advice is intended, and please exercise caution as risks are involved.)