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The month that was:
November was the best month of the year! The S&P 500 went up by about 8.9%, the Nasdaq went up by about 10.7%, and the Dow went up by about 8.8%. This was the best month for the S&P 500 and the Nasdaq since July of last year, and it ended the three month losing streak. Bonds also had a great month, with their best month since 1985.
On November 1st, the Fed decided not to raise interest rates for the second meeting in a row. Then on November 14th, the CPI report showed that inflation in October was 3.2%, down from 3.7% in September. Prices did not go up at all from September to October. On that day, the Nasdaq went up 2.4% and the S&P 500 went up 1.9%. Investors now believe that the Fed is finally done raising interest rates, and some even think the Fed could start cutting rates next year. The yield on the 10-year Treasury note went down from almost 4.9% at the end of October to about 4.4% by the end of November.
In my April newsletter, I explained that when interest rates were rising quickly, Nasdaq stocks got punished the most, and when the rise of interest rates slowed down, tech stocks started to go up. November is a great example of the opposite of what happened in September. When interest rates go down, it becomes cheaper for companies and families to borrow money, safe investments like Treasury notes pay less interest so stocks look more attractive, and the future profits of growth companies become more valuable. That is why the Nasdaq went up the most this month.
Sells -
Sold 17 EL at $103.50
On November 1st, Estee Lauder lowered its forecast for the fourth time in the last year. It now expects its sales this year to be between 2% lower and 1% higher than last year. Before, it expected sales to grow 5% to 7%. Its sales in China are still weak, and the war in the Middle East is also hurting its business. The stock went down about 19% in one day, to its lowest price since 2017. I sold all of my shares for a big loss.
Estee Lauder taught me the same lesson as Dollar General. I kept buying because I thought Estee Lauder was a great brand at a cheap price. But cheap stocks can always get cheaper. When a company keeps lowering its forecast again and again, it is better to wait until the business stops getting worse before buying more. In the future, I will be more careful about buying stocks that keep going down.
Buys -
Bought 10 TREX at $57.48
Trex is the number one brand of composite decking, which is used to build outdoor decks and is made mostly from recycled materials. On October 30th, Trex reported excellent results. Its sales went up from $188 million to $304 million compared to last year, its profit margins went up a lot, and it raised its forecast for the year. The stock price has been low because high interest rates have slowed down the housing market. When interest rates come down, I think more people will build decks, so I started a new position.
Bought 14 MRVL at $46.93
In August, I bought Marvell at $57.77. Since then, chip stocks went down with the rest of the market, and Marvell is now about 19% cheaper. Marvell's AI business is still growing quickly, so I used the opportunity to add more shares at a much better price.
Bought 1 INTU at $485.59
I added another share of Intuit, which is one of my favorite high quality tech companies.
Bought 3 ONON at $27.40
On November 14th, On Holding reported great results again and raised its sales forecast for the year. It now expects its sales to grow more than 46% this year. The stock still went down a little after the report, so I added a few more shares.
Thanks for reading my newsletter!