I Just Bought More of the Stock Everyone Slept On
Summary
Couch Investor provides a comprehensive update on the couch investing portfolio, which has risen 3% over the past week and remains up nearly 40% for the year. Couch Investor analyzes the upcoming earnings for Oracle and Adobe, noting that Oracle faces challenges with high capital expenditures and negative free cash flow, while Adobe is dealing with significant leadership turnover. Couch Investor maintains that the core business models of these companies remain intact despite market skepticism and technical volatility.
Couch Investor also evaluates the broader macroeconomic landscape, specifically the upcoming FOMC meeting. Couch Investor suggests that while a rate hike is possible due to persistent inflation and strong employment data, the overall market momentum for high-quality businesses should remain resilient. Couch Investor emphasizes focusing on individual company fundamentals rather than broader market noise or potential AI bubble fears.
Mentioned Stocks
Reasoning: Couch Investor added shares last week between $57 and $64. While Couch Investor admits the valuation is expensive, Couch Investor believes in the long-term potential and is comfortable with the stock consolidating around $60 until further business catalysts emerge.
Reasoning: Couch Investor states the current price of $258 is a good area to build or open a position. Couch Investor suggests accumulating more if the price falls further toward $250 or $240.
Reasoning: Couch Investor argues Meta Platforms is extremely undervalued. Couch Investor believes internalizing AI model development will save the company tens of billions of dollars and that reclaiming the $600 level shows positive momentum.
Reasoning: Couch Investor identifies the $330 to $340 area as attractive for adding to or starting a position. Couch Investor also mentions that selling puts at $300 for December offers attractive premiums.
Reasoning: Couch Investor believes the market reaction to leadership changes is irrational. Couch Investor likes the internal CEO successor choice and notes that the business remains highly profitable with a forward PE around 10.3.
Reasoning: Couch Investor increased the position by 16% this week, adding shares at $522. Couch Investor views it as a very high-quality business and would look to add more if it drops near or under the $500 level.
Reasoning: Couch Investor added more shares of Nu Holdings last week as the stock stayed above the $15 support level. Couch Investor views the business as very strong and expects it to tackle the $16.50 to $17 range in the long run.
Reasoning: Couch Investor mentions that the area around or under $200 is an acceptable entry point for long-term investors. Couch Investor highlights that the high volatility of the stock offers opportunities for income through selling covered calls and puts.
Reasoning: Couch Investor expresses concern over Oracle's negative free cash flow and rising capex. While the $638 billion RPO backlog is positive, Couch Investor believes the company needs to demonstrate it can convert this backlog into revenue faster to improve market perception.