Seeker Newsletter - Week of Sept 14th 2020

Good Morning,

I hope you all had a nice weekend. For sports thirsty fans, we saw a return of NFL football. Here in California we got to enjoy dine-in seating at restaurants up to 25% capacity or 100 people, so for me it was a nice weekend.

However, for investors we saw the Nasdaq continue its fall and volatility has remained for the pandemic high-fliers.

Let’s dive in to the week ahead!

Stock Market Update

Last week we saw the markets under pressure as the constant upward momentum has reversed, especially for the technology sector. I have continued to monitor the earnings multiple for the S&P 500, which has historically traded around 15x, and was trading at 29.5x the week prior. As of Friday, the S&P 500 was trading at an earnings multiple 28.7x, so although it was down from the prior week, it is still trading at an expensive level.

Tesla and Apple shares continue to be under pressure losing 11% and 7%, respectively last week.

Not much this week in terms of earnings results. Fedex (FDX) and Adobe (ADBE) release earnings on Tuesday.

I want to see how these first few days trade before making any moves myself this week being that the S&P 500 is trading right at the 50 day moving average and if it falls below, we could see further pressure.

With that being said, let’s take a look at the market performance for the major averages.

YTD/Previous Week:

Dow: -3.1% Dow: -1.7%

S&P 500: +3.4% S&P 500: -2.5%

Nasdaq: +21.0% Nasdaq: -4.1%

As you can see, all three major US averages were in the red last week, as the S&P 500 falls back towards even on the year. The Nasdaq continues to have a sizable lead over the other two major averages.

Even with the pullbacks in the technology sector, many of the top technology names are still trading at levels well above their 5-year valuation averages, but beginning to look much more reasonable.

It seems as if investors have continued looking at cyclical stocks, as they continue taking profits from their technology trades. Caterpillar and Deere are two names that continue to perform well the past few weeks

In other news, Tik Tok rejected the bid from Microsoft and Walmart, and instead chose the likes of Oracle, so it will be interesting to watch those names this week.

Let’s take a look at the Seeker Portfolio

Seeker Portfolio

The Seeker Portfolio was started at the beginning of August with $10K and since then I have added another $11K to bring the contributed amount to $21K. The idea of this portfolio is for followers to follow along as I construct a new portfolio. This past week I only made one addition and had one dividend reinvestment.

• Additions this week:

BUY 20 shares of CVS Health Corporation (CVS) at a cost of $57.25. This purchase adds $40 of annual dividend income.

Reinvested $7.13 in dividends received related to Raytheon Technologies (RTX).

Here is an updated look at the current portfolio:

Last week was not kind to our portfolio as we pulled back 3%, but with the S&P 500 teetering on the brink, we could see further selling pressures this week. In the week ahead I am going to let today play out so I can get a feel for where the market is heading during the week.

The portfolio is now projected to earn $863.70 in annual dividends and has a portfolio dividend yield of 4.2%.

As always, if you have any questions at all, please feel free to DM me on Twitter or simply email me at [email protected].

Have a great week!

Mark