The harsh global folio!

As of today, I initiated 5% position in Google. In past 5-years, this is the third time I am buying Google, at a price lower than when I lost sold it (around $104 in Feb 2021, see link below).

Its amazing how powerful forces of mean reversion are, and how ignoring them can lead to subpar results. The EV/sales chart of Google suggests that they bottom out around 4x EV/sales. I last sold around 7x EV/sales.

Thoughts on Nasdaq collapse: It seems that we are in the last leg of the Nasdaq collapse, when share prices of good cos with free cashflows are getting hit.

In every market collapse, the first leg of downturn starts from junk cos, as was the case with ARKK ETF peaking out in Feb 2021. The collapse then trickles down to reasonable cos with slightly shaky business models (likes of Dropbox, Uber). The final leg is when the blue chips (or so called generals in folk literature) start getting hit (likes of Google, Microsoft, etc.).

My portfolio positioning has largely followed this trajectory. I was fully out of tech stocks (except a 2% position in Disney) by March 2021. I then started buying slightly shaky business models like Uber in October 2021 (which was a bit early), Dropbox in Feb 2022, Netflix after its huge 60% intraday fall in April 2022 and subsequently bought InMode, more of Disney and now Google.

It seems that I have come the full circle, from having large positions in tech stocks, then getting completely out and then reentering the ones I like. In all this time, companies have grown sales, started focusing on free cashflows and are now behaving like mature adults (like they should!). Its been a delightful journey maintaining my thought journal on this thread.

Coming back to Google, I will look to increase my position size to 10% if price reaches $75-80. Updated portfolio is below and cash reduces to 20%.