VIDEO: Here's How We're Dealing With All This Market Volatility

In today’s Daily Rundown video, Chris Versace explains how the portfolio is dealing with the current bout of market volatility, including why it’s important to focus on the data and to leave the emotion on the sidelines. As Warren Buffett said, you want to be a no-emotion person making investment decisions.

He also discusses our plan for the portfolio as we move deeper into the current earnings season and quickly recaps today’s moves for the portfolio. 

Transcript

CHRIS VERSACE: Hey, folks. Chris Versace here, Thursday, July 18. And, as you can see, while the stock market started off positive today, we are seeing it give way, moving lower yet again today, this time pretty much across the board when it comes to the major averages.

Now, at times like this, I know that it's kind of easy to become emotional, to kind of, I won't say panic, but become a little concerned. But we are going to do what we try to do. And by that, I mean is remain disciplined, cold-blooded, you might call it, letting the data talk to us. Any type of euphemism that you want to use that says we will remain disciplined investors.

We're not going to chase things. We're not going to fret. Why? Because we're going to continue to chase the data. And if you saw the alerts this morning, you noticed that we reiterated our one ratings on NVIDIA and Universal Display. And we also picked up more shares of Qualcomm and Marvell, largely because the recent pullback kind of led them to become less than 4%, or less than almost 4%, of the portfolio in terms of their respective position sizes.

But the catalyst for that, if you-- again, if you saw the alert, you know what I'm talking about-- it was the very, very strong results that we saw inside of Taiwan semiconductors June quarter results, specifically for high-performance computing and smartphone. But also the comment that they said that over the last three months, demand for high-end smartphone components and AI/data center has only strengthened.

That tells us that we are still in the early innings of not only AI, but AI on device, meaning not only smartphones, but the PC market as well. And we continue to think that as we move through the coming quarters, the uptake of these devices is going to lead to an explosion in the amount of data that's being created and consumed. That kind of speaks to our thesis for Marvell's non-data center business.

Now, are we going to rest on our laurels? No. We're going to continue to reevaluate spots where we might want to pick up some incremental shares of some other positions like we did today. We will have to be careful, just given the levels of our cash. But again, that's why we took advantage of the robust move over the last few months in our GLD shares, trimming them back ever so slightly.

And if we see some other names in the portfolio that are overextended, might we do something similar? Yes, we might. We might absolutely do that. And we'll also continue to monitor our ratings as well.

As I'm talking with you earlier today, I did see that United Rentals shares moved past our 750 price target. So we are going to have to really reconsider that one rating. You know, these are the types of things that we have to do to remain disciplined and prudent investors.

So we're not going to fret. We're going to make disciplined, well thought out moves if we have to. But we're also looking for spots where we can continue to put capital to work. That should also give members potentially new entry opportunities for existing portfolio positions or potentially a new fresh position.

Because as much as we will be focusing in on what we have in the portfolio, when we see times like this, it can bring opportunities. If you remember, that's exactly what we did earlier this year during April, when we picked up more shares of NVIDIA, but also brought Trade Desk and Labcorp into the fold as well.

But we'll also be mindful of the unfolding geopolitical landscape and what fresh data says for not only the economy, but also the possibility for the Fed to cut this year. I say possibility because while I think it's going to happen, the market seems to think it's going to happen up to three times. Candidly, I think that's a little out over its skis. So we're going to want to watch our positions carefully that are more interest rate sensitive.

Yes, Builders FirstSource; yes, United Rentals-- they have been on a bit of a tear of late. They might wind up giving some of that back if upcoming data tells us that it's looking more like two rate cuts or possibly even one.

Remember that we did share with you the year-over-year core PPI movement in the wrong direction. So we'll be mindful for other data that says, hmm, perhaps the progress may not be as great as folks were looking for. And we'll also be reading the tea leaves of upcoming Fed speakers just to see if they start to push back a little bit, or they say that the market's expectation for three rate cuts might be just, again, a little ahead of where the Fed is likely to be.

With that, we do have some other earnings that we'll be looking out for. I shared some comments today on why DR Horton's results were very positive for our shares of Builders FirstSource. But we have American Express reporting tomorrow, so we'll be watching that for Mastercard, but also, what they say about larger consumer spending.

And then, of course, we're off to the races next week when the volume of earnings reports jumps significantly. What we will be doing during that-- again, I know I've said it quite a few times. We're going to remain calm, cool, collected, disciplined, and we are going to continue to collect data that we'll be reading the tea leaves for our positions and what they're likely to say when they report. Again, that has us consuming everything that we can from competitors, customers, and suppliers.

So with that, we are expecting a busy week next week. So please be sure check your emails, your alerts. We want to make sure you are right there with us as we reformulate our thinking as needed based on whatever learnings we have from this scanning of upcoming data. But also, too, we want to make sure you're right there with us when we make any moves with the porli-- portfolio-- excuse me-- just like we did today with the shares of Qualcomm and Marvell. And with that, thanks for watching.