Managing a portfolio full of winners
Summary
The Investment Committee debates whether to rotate out of parabolic tech winners or stay put. They view the consolidation and rotation into other sectors as healthy. One member recommends buying Broadcom on a pullback to its 200-day moving average. The AI narrative may face challenges from upcoming IPOs and spending concerns.
- The market is experiencing a rotation from big tech winners into financials, industrials, and healthcare.
- Committee members agree the consolidation is healthy and sets up the next leg higher.
- Broadcom's report missed high expectations, leading to a drop, but long-term support is identified.
- A speaker suggests buying Broadcom (AVGO) on a correction to the 200-day moving average near $355-$360.
- The AI and tech narrative could face tests this summer from large IPOs and spending sustainability.
- Equal-weight S&P 500 is outperforming, indicating broadening beyond tech mega-caps.
- The market has become inured to geopolitical tensions and oil prices around $100.
- Some members note that retail investors are more educated and faster-moving than in 1999.
Trade Ideas
Buy AVGO on pullback to 200-day MA
The speaker recommends buying Broadcom (AVGO) on a meaningful correction to its 200-day moving average, which is around $355-$360. That level acted as support during consolidation earlier this year. The speaker believes the name has tremendous support there and would be an attractive entry point, though they are not buying at current prices. The thesis is based on technical support rather than a change in fundamental outlook.
