Date: July 5, 2024

Nvidia. Again?

I hope you had a good 4th of July. It was super quiet for us as our kids all had plans and my shoulder remains too painful to really do anything besides sit in a pool and let buoyancy make it feel better. For once, I am listening to the docs and my body and actually resting.

Back to back days that the markets close at 1pm. I don’t ever recall seeing that. People always ask me why they just don’t close. The answer like in most cases is to just follow the money. Neither the NYSE nor the NASDAQ want to lose share to the foreign markets. They don’t want to give anyone an incentive to trade away. My view has always been to stay open all day on a Wednesday when the holiday is on Thursday, but close on Friday. My view and $2 won’t even get you on the subway, which I will be using on Thursday while in the city.

Wednesday was a super quiet day in which Nvidia was responsible for something like 30% of the gain. It was also yet another day where the masses did not or went down while the S&P 500 and NASDAQ 100 went higher. I haven’t found a chart of the average stock price, but I have to believe it has been sideways to lower for months. I see this behavior in our Unloved Gems portfolio. A handful of stocks have powered higher while the majority have gone sideways or down for months. Of course, I should have owned bigger positions in the stronger stocks, but that’s just not how I run that portfolio.

Someone commented that they were surprised to see us adding to our Nvidia position early this week when I have written negatively about it for so long. Frankly, I was too, but when the stock refused to confirm lower prices two weeks ago and it has been the single strongest stock in our universe, the model wanted to own more. So I did. If it goes back to the old highs, there will be serious contemplation on position reduction or an outright sale.

I hope Mother Nature throws us some good weather this weekend. It’s been a bit unsettled. I also naively hope all the election talk somehow abates as it’s been inescapable. I don’t think I can last another four months at this pace. If the Yankees can right the ship, at least that will be a good distraction. Btw, tonight is George Costanza bobble head night at the stadium for the first 18,000 people.


Paul Schatz, President, Heritage Capital