Our Top 10 Growth Stocks Tear Sheet has been updated. And so has our complete Disciplined Growth Portfolio. There have been two main new purchases, and one prominent complete sale (as well as a handful of rebalancing trades, plus the liquidation of several smaller positions). You can also access “buy under” prices relative to current market prices, plus additional aggregate and security-specific data.
The main changes revolve around recent market volatility, and specifically our desire to “lighten up” on chip and AI related stocks. We are still overweight chips stocks and the AI megatrend (relative to the overall market), just less overweight now (as chips stocks can be volatile/cyclical, and new disruptive opportunities have presented themselves as the market recently sold off).
Super Micro Computer: We sold 100% of our SMCI shares. We still believe this buisness has massive long-term upside, and we are rooting for everyone that still owns the shares. However, with the cyclicality of AI (and growing murmurings of the theme getting ahead of itself) we redeployed this cash elsewhere (specifically, we view SMCI as a “phase 1” AI play, and we like “phase 2” AI plays more right now.
Vertiv (VRT): This company makes components for datacenters, and it continues to benefit from massive demand growth as the cloud (and “phase 2” of AI accelerates). The shares sold off, and we added a position.
Crowdstrike: The full negative impacts of the recent software update glitch are still unknown. But the massive share price selloff is likely dramatically too much as compared to the long-term upside of this leading edge cloud computing cybersecurity stock. Crowdstrike is another “phase 2” AI company, and a beneficiary of cloud computing in general.
We also dumped a variety of “phase 1” AI stocks (that we had smaller positions in), including Monolithic Power (MPWR) and PureStorage (PSTG), both of which have been huge winners for us. We also sold Sea Limited (SEA) another huge winner for us over the last year. And we rebalanced completely out of Medtronic (MDT) and Baxter (BAX), both healthcare companies that have not performed well, but did provide a little padding (less downside) during the most recent marketwide selloff.
Also worth mentioning, we currently have a position in the Vanguard Total Market ETF (VTI). We will occasionally use this low-cost ETF as a placeholder to maintain full exposure to the market while transitioning between shares (such as now).
Bottom Line:
Overall, we believe the Disciplined Growth Portfolio is now leaner and meaner, and ready to continue to benefit from compelling long-term growth opportunities ahead.