The 2 Positions We Added at the Bottom (And Why They’re Already Outperforming)
Weekly Update - Week 15
“The real key to making money in stocks is not to get scared out of them.”
Peter Lynch
This week, the market has given us an answer.
Take a look at the charts. They tell the story clearly enough. The pattern we have been highlighting (and, yes, predicting) over the past month and a half has now played out.
The S&P 500 not only held the key levels we were monitoring… it has surged back to all-time highs.
The T.A.C.O. hypothesis was not just a narrative framework. It was the mechanism. As financial conditions tightened (equities threatening to break down and long-term yields beginning to push higher) the political response followed.
The ceasefire served as a pressure valve. And once that valve was opened, markets did what they tend to do in these environments: they moved fast… and they moved hard.
But the most important point here is not that the hypothesis we shared across our product roster proved correct.
It is what we did with it. Because throughout the entire duration of this episode... while the risk-off wave intensified, while sentiment deteriorated, and while both professional and retail investors were selling in size... we did the opposite.
We increased our Model Portfolio’s overweight in equities.
By the way, have you check Our latest leaderboard? It tells the story better than any intro, showing our total returns since publication, including multiple triple-digit winners and a consistent record of beating the market while managing risk.
And we did so in what were, at the time, deeply contrarian areas of the market. Geographically, we leaned hard into the United States. From a sector perspective, we tilted toward disruptive technology... precisely the long duration assets investors were most afraid of at the time.
That positioning is now beginning to speak for itself. The two positions we added during that period are already delivering returns that would normally take far longer to materialize. One is up approximately 18% from our entry.
The other COIN 0.00%↑ is now trading roughly 28% above where we initiated the position.
We do not view that as luck. It is what happens when a framework, an investment process, and the fortitude to act are all aligned. Nor do we view this as a victory lap. If anything, it is a reminder of how these opportunities tend to appear: not when the narrative is comfortable… but when the pressure is highest and the consensus is leaning the wrong way.
And that brings us to the current setup.
Because while the index is now making new highs, the underlying environment remains far from resolved. The geopolitical backdrop is still fragile. The structural tensions we have been highlighting have not disappeared. And, as always, markets have a tendency to move ahead of clarity.
Which means the work does not end here.
If anything, it is just beginning.
Stay close to our work.
Good investing!
Vasco Marques de Freitas, CFA, CMT
You might also like reading
Disclaimer
The information provided herein is for general informational purposes only and does not constitute financial advice or a recommendation to buy, sell, or hold any investment. It is not tailored to any specific individual or investor profile. All investments involve risks, and past performance is not indicative of future results. Before making any investment decisions, it is important to consider your own financial situation and risk tolerance. We do not guarantee the accuracy, completeness, or reliability of any information provided, and we disclaim any liability for any loss or damage arising from reliance on the information herein. Readers are advised to consult with an authorized financial intermediary before making any investment decisions.