On 17/02/2023 i made my first trade with a clear objective, keep growing my portfolio monthly on between 500 and 1K €, with strategic investments in a mix of individual growth stock, dividend plays and a bit of ETFs. Focused on US and European markets, but mainly US as I believe that the environment they have there is the best for companies and that it will continue to outperform on the long run.

I use SeekingAlpha to help with my picking process and usually go for undervalued stocks with a good momentum.

My biggest holdings at this point are AI infrastructure and big tech (35%), finance, banks in Europe and BDCS in US (15%) and travel (15%), as I felt that bigger oportunities there were than in other sectors (and still are).

I don’t hold cash (just enough for emergencies) and I have 2 mortages at a very low interest rates, on an apt that I rent (investment) and the apt where I live. I could lower that mortages instead of investing in the market, but with the interest I’m paying (l1,35% and 2,2% fixed rates) and inflation, I’m happy to be in debt (and my first apt is paying itself and part of the second). I don’t have other debts, I’m 32 and my investment horizon is long therm.

So far so good, I’ve learned things doing mistakes on the way, i killed winners too fast and kept losers for too long, but getting better on that. That’s the visual summary of this 2 years.

On the process I’ve seen some pullbacks that I (sometimes) used to increase positions that thought were worth it (like $CLS (-4,4%) ), and I also got used not to panic and think on the long therm.

For now, beating MSCI World, S&P500 and even NASDAQ100, of course with a bit of luck with the meteoric apreciation of $APP (-15,44%) but with the guts to hold it even when it was 600% up. I have not realized gains (sold winners and losers, so compensated), so no taxes paid yet, except on dividends. I’m sharing gross profit here.

I’m trying not to have more than 50 picks, so at this point I either increase positions or sometimes sell before buying new ones.

I’ve been lucky enough to start on a 2 year period that markets have been constantly going up, and I don’t expect this kind of performance on the future (2024 was exceptional). We’ll see how I manage on a worse environment!

Increasing my position in $POWL (-2,18%)

Just in for a month now, this selloff deleted all my gains (35% at some point) and put me in negative territory.

Why am I adding more?

The price is 5% down from when I entered, and I belive it was already a good entrance point. The earnings and guidance made it jump higher and I belive the story behind its growth is still alive.

Why did it sell off 20% with the DeepSeek news? Well, $POWL (-2,18%) performance is linked to data centers and energy consumption, as they provide power solutions, and with capex on that being questioned, it fell like a rock, just like $CLS (-4,4%) or $STRL (-3,88%) .

I belive that we have seen an overreaction on the market to sensacionalist news, without deep understanding of what is really going on (I also belive that some stocks are priced to perfection and that a selloff was necessary).

So what is going on?

DeepSeek trained a model and claimed it cost 6M to train, but how did they calculate that cost? By implying a cost of RENTING H800 NVIDIA chips (the “cheaper but not so cheap chips” from Nvidia that can be sold in China). So not considering the cost of the infrastructure, salaries, development and building the model itself etc… just the training hours on rented H800 NVIDIA chips. We don’t even know for sure the truth about this costs, this is a Chinese start up we are talking about.

What we do know is that they did achieve good answers from a LLM for a lesser price, as their model uses a different more efficient aproach, that will for sure be copied soon (they’re an open source model) by the other players if they feel like it is the way to go.

So, is this going to affect the spending in AI?

This is a step in the right direction to make AI something global, that will be used in every aspect of our lifes, and the AI infrastructure will be needed to be able to afford all this demand that will be comming. Everything is going to evolve faster than ever, and AI infrastructure will be key to that, even if improvement can be achieved with less computational power, don’t you think that the US and China are just in the beggining of an AI race and that any of them can afford being left behind?

I obviously don’t know, but I’m not selling my positions on the AI infrastructure related stocks, specially the ones with reasonable P/E like $POWL (-2,18%) and $CLS. (-4,4%)

Amazing what one single news event can make to the hole market... Is it such a big deal?

Well, an impressive AI comming from China, that is supposedly performing as good as ChatGPT or LLama with way less resourcess (and I say supposedly as no one really knows anything when it is comming from China...). Is this really going to change everything?

My worst performers today are $CLS (-4,4%) , $STRL (-3,88%) and $POWL (-2,18%) all of them linking their exceptional performance this last months to the AI infrastrure. Will they suffer that much?

They're american companies, with mainly an american business, in a country that has put its focus on compiting with China for the AI dominance. China has an AI that can work as ChatGPT with less resources, so what...? Is USA going to stop investing in it for that reason? Or maybe the opposite?...

Does what DeepSeek has achieved, mean that the Big Tech are investing too much in "super chips" when they could do the same with less investing and less data centers? Maybe... But will they stop the investments in data centers? If something like what DeepSeek did can be achieved with less powerful chips, what will the Big Tech be able do with the "super chips" of Nvidia? Sky is the limit, and the american Big Tech have the capacity of burning cash trying to reach it, while they keep earning billions.

While I'm sad I lost more than 15% on this 3 stocks valuations and my profits are less nice than they were on Friday, I still see this companies in a very nice shape to keep growing, and the AI market to keep expanding. Even with the fall valuations are not super beautiful (considering the noise), but this might be an oportunity for the ones that didn't invest before in this companies to get a piece of them now.

I'm not going to use this to add more of this stocks to my portfolio at this point, as the 3 of them are at levels of 1 month ago and I already have them in my portfolio, but if this blood bath continues I'll fell I have to... This is the breather that at some point was going to come with the big rally they've been running.

update* bought some $CLS (-4,4%) 25% down was too tempting for a stock I follow closely

$CLS (-4,4%) is a Canadian-based electronic manufacturing company that is highly exposed to the growing AI industry and its hyperscalers. According to Seeking Alpha, "The company offers its products and services to equipment manufacturers, cloud-based, and other service providers, including hyperscalers, as well as companies in aerospace and defense, industrial, HealthTech, capital equipment, and communication and enterprise markets."

$CLS (-4,4%) has been a top performer in both 2022 and 2023, delivering exceptional returns. The stock price skyrocketed from $10 in January 2022 to a remarkable $100 by the end of 2023, representing a 1,000% gain in just two years. In 2023 alone, it achieved approximately 255% growth. Currently, the stock is trading close to its all-time high. So, why consider it now?

I've had $CLS (-4,4%) in my portfolio since October 2023 and added more shares in August 2024. Its momentum remains strong, with excellent performance metrics. The company’s EPS is expected to continue growing in the low double digits, between 15% and 20%, while revenue growth is projected at 10% to 15%. For me, the most compelling factor at this point is the current valuation: Eventhough $CLS (-4,4%) is an AI play, profitable, with high growth and a consolidated business, it still trades at a 26x P/E for 2024 and a forecasted 23x P/E for 2025. These multiples are aligned with the sector average, but Celestica is growing at a faster pace and maintains a solid financial position, and is strictly linked to AI hyperscalers.

Risks to Consider

The primary risk for $CLS (-4,4%) lies in its client concentration. Its top 10 clients account for approximately 65% of its revenue, meaning any major decisions by these clients could significantly impact the company’s income. However, Celestica has established long-term relationships with top-tier clients, and the rapid expansion of the AI market offers a promising growth outlook. While the business might be cyclical, the current AI investment cycle is likely to last for several years, and we are still in the early stages of this trend.

It is clearly trading at a higher multiples of its average (which would be arroun 15 P/E), but we are talking about a different moment of growth for the company and the market they're in, so I belive it is justified.

My Position

I am not adding more $CLS (-4,4%) shares to my portfolio at this point, as it already represents 5.5% of my holdings and is my fifth-largest position. However, I still see potential for further appreciation and have no plans to sell in the near future. I still expect good returns and that's why I add it to my NOT real portfolio F$F Tips.

**Disclaimer**: This is not financial advice. Please conduct your own research before making any investment decisions.