|
|
| Home | Portfolio | Watch List | Newsletter | About | Contact Me | Stock Advisor |
The month that was:
2025 started with gains. The Dow went up by about 4.7%, the S&P 500 went up by about 2.7%, and the Nasdaq went up by about 1.6%. Donald Trump was sworn in as president on January 20th, and the next day he announced a project called Stargate, where companies like OpenAI, Oracle, and SoftBank plan to spend up to $500 billion building AI data centers in the U.S. On January 29th, the Fed kept interest rates the same, between 4.25% and 4.5%.
The biggest story of the month happened on January 27th. A Chinese company called DeepSeek released an AI model that worked about as well as the best American models, and it said the model was trained for only a few million dollars, using fewer and less powerful chips. American companies have been spending billions of dollars on Nvidia chips to build their AI models. Investors suddenly worried: if AI can be built so cheaply, maybe companies won't need to buy as many chips. That day, Nvidia's stock fell 17%, and it lost about $590 billion in value, the biggest one-day loss for any company in history. Other companies connected to AI data centers, like power companies and electrical contractors, also fell a lot.
Many experts later pointed out that cheaper AI could actually lead to more people using AI, which could mean more demand for chips over time, not less. Nvidia's stock recovered part of its loss within a few days. DeepSeek is a reminder that even the strongest trends in the market can be shaken by surprising news, and that technology can change very quickly.
Buys -
Bought 1 IESC at $214.01
Bought 7 MLI at $81.33
IES Holdings and Mueller Industries both fell on the DeepSeek news, because they help build data centers and other buildings. I don't think one AI model changes the need for more data centers and electrical work in America, so I added to both positions at lower prices.
Bought 10 SWK at $90.30
I added more shares of SWK. The company has been cutting costs and paying down debt, and it has raised its dividend for more than 50 years in a row.
Bought 2 SAIC at $110.13
Bought 1 CACI at $379.35
I added to SAIC and started a small position in CACI. Both companies provide technology services to the U.S. government, including the military and intelligence agencies.
Bought 5 ELF at $104.45
e.l.f. Beauty sells affordable makeup and skincare that is very popular with teenagers. Its sales have grown very quickly, but the stock had fallen about 50% from its high, so I started a new position.
Sells -
Sold 7 AMD at $120.70
Sold 5 MRVL at $118.05
At the start of the year, I sold some of my AMD and Marvell shares. Both have been great investments for me, especially Marvell, which went up a lot at the end of last year. I took some profits to buy companies outside of tech.
Buys and Sells -
Bought 15 PII at $56.24
Sold 15 PII at $48.77
In December, I sold Polaris for a big loss. On January 27th, I bought shares back at a lower price, right before it reported earnings. Polaris gave a disappointing forecast for 2025, and the stock fell. I sold my shares two days later for a loss of about 13%. Buying right before an earnings report is risky, because the stock can move a lot in either direction.
Thanks for reading my newsletter!