November 2024 Portfolio Review
The Hedge Vision portfolio has returned 36.55% YTD
In November, the Hedge Vision portfolio returned 6.66% compared to the S&P 500’s return of 5.43% and the Nasdaq 100’s return of 4.56%.
The Hedge Vision portfolio has now returned 36.55% YTD while the S&P 500 and Nasdaq 100 have returned 28.80% and 27.43%, respectively.
Total Positions: 26 compared to 26 as of Dec. 31
Top 10 Positions Concentration: 78.4% compared to 73.8% as of Dec. 31
Rest of Portfolio: 19.6% compared to 19.4% as of Dec. 31
Cash: 2.0% compared to 6.8% as of Dec. 31
My monthly gains were led by Datadog (DDOG), which surged higher by 23.93%. DDOG is now my fourth largest position, climbing up from the sixth place spot at the beginning of the month. I bought my first shares of the company in 2020 and have been a shareholder since then.
Being patient has definitely paid off, as DDOG hasn’t outperformed the Nasdaq 100 on a YTD basis since April. That changed in November following a strong breakout.
My buys and sales in real-time, as well as further analysis and commentary, are shared with contributing members on Substack Chat:
Alibaba (BABA) was a sore spot for the month and fell by 10.46%. However, as explained below, I am only growing more confident in China. I took on two new positions in Chinese ETFs in November, increasing my overall China exposure to 9.2%.
In 2024, I have now started new positions in four stocks: LULU, ELF, FXI, and KWEB.
November 2024 Buys
New Positions: iShares China Large-Cap ETF (FXI), KraneShares CSI China Internet ETF (KWEB)
I decided to increase my exposure to China while diversifying outside of BABA given a flurry of positive economic signals. These include:
-Singles’ Day gross merchandise value (GMV) growing by 26.6% YoY to 1.44 trillion yuan.
-New and secondary activity home transaction growth in several Tier-1 cities, like Beijing, Shanghai, and Shenzhen.
-October’s Caixin General Manufacturing PMI was 50.3 compared to the estimate for 49.7. November’s PMI was 51.5 compared to the estimate for 50.5. A PMI above 50 indicates growth while a PMI below 50 indicates contraction.
-A resurgence in air travel and travel growth among citizens.
-Additional stimulus on the way.
Increased Positions: e.l.f. Beauty (ELF)
ELF finished the month up by 25.60% after a double-beat on earnings, a guidance raise, and a temporary drop from a Muddy Waters short report that has since been recovered.
Muddy Waters claimed that e.l.f. was inflating its revenue and profits due to a drop in imports.
However, the short seller was missing one key point, which e.l.f. pointed out in its response:
“In particular, in early 2024, for competitive reasons and as permitted by applicable regulations, we filed a request for confidentiality with U.S. Customs and Border Protection with respect to our customs import data. Therefore, import data available to the public after February 6, 2024, does not include a substantial majority of our actual U.S. imports.”
-e.l.f Beauty, November 2024
November 2024 Sales
Exited Positions: None
Reduced Positions: None
Plan for December
Fintech stocks have been noticeably strong as of late. In my portfolio, BILL (BILL) had a November return of 54.86% while Block (SQ) increased by 22.73%. PayPal trailed behind with a 12.32% return.
There are several reasons supporting this, such as a lower federal funds rate and the expectation of lower regulatory measures for the crypto and buy now, pay later (BNPL) sectors during Trump’s upcoming term.
However, if Trump’s future policies, like tariffs, lead to rising inflation, then fintech stocks could be looking at a difficult few years again.
Rising inflation leads to higher rates, resulting in increased borrowing costs for fintech companies and their customers, reduced lending profitability, and a higher risk of loan defaults.
Fintech stocks haven’t priced in this risk yet and are still riding a wave of euphoria. If the wave keeps up, I will look to capitalize by cutting my exposure. My cash position is currently at a YTD low of 2.0%.
Hedge Vision - Institutional Insights
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Brilliant write up! Thanks for sharing