Q3 2023 Portfolio Update
A solid YTD performance over 2023 with a total return of 23.9% compared to 13.1% for the S&P 500.
It’s been 3 months since we changed the format of one of the two company reports we publish each month and we are looking forward to your thoughts. How have you found it so far? Our feeling is that you do find them insightful, as we are approaching 2,700 subscribers and 100 supporters.
Here is a snapshot of the deep dives released over the quarter:
Deep dives of Q3 2023:
Without further delay, let's jump into the summary of our portfolio performance in Q3 2023 and Year to Date ("YTD") 2023. Admittedly, this was a particularly active quarter for us.
1. A note on the economy
Geopolitical: Following nearly 20 months of the Russian-Ukraine conflict, a “new” crisis has emerged in the Middle East due to the surprise attack by Hamas on Israel. This newsletter refrains from delving into politics, but as investors we need to be aware of the potential escalation implications of the conflict in the region.
US economy: Per the latest data, US CPI increased by 0.4% in September on a seasonally adjusted basis, with a 3.7% increase over the past 12 months. Shelter costs, a significant household expenditure, have surged by 7.2% on a 12-month basis, while the energy index showed the most significant monthly increase at 2.3%. The reading was mixed surpassing consensus estimates of 3.6%. In the meantime, the US economy has showed resilience by adding 336,000 non-farm jobs in September, exceeding the consensus of 170,000, indicating that the US economy can function well at higher interest rates.
Global GDP forecasts: The IMF projects a 3% global real GDP growth for 2023, with the Emerging and Developing Asia region anticipated to be the fastest-growing, while the US is expected to achieve a 2.1% growth rate (exceeding the 1.5% average for Advanced Economies), suggesting that a recession is unlikely.
“As a result, projections are increasingly consistent with a “soft landing” scenario, bringing inflation down without a major downturn in activity, especially in the United States, where the forecast increase in unemployment is very modest, from 3.6 to 3.9 percent by 2025.” Pierre-Olivier Gourinchas, Economic Counsellor
Source: IMF World Economic Outlook, October 2023
As of September 30, 2023, our total return for Q3 2023 and YTD stood at 0.3% and 23.9%, respectively. This compares favorably to the S&P 500’s Q3 2023 return of -3.3% and YTD total return of 13.1%. Since inception (28 January 2022) our cumulative return stands at 12.1% compared to -0.5% of the S&P 500.
Source: S&P Dow Jones Indices, Broker, StockOpine analysis