April Investment Plan
The bears are getting louder, with reason
Everything I have been talking about for months seem to have or is materializing those last weeks/months. From a refocus on defensives end of 2025 with clear rotation signals given by the market, the first really worrying signs of liquidity in February and real concerns - or at least realistic comments, on geopolitics in March…
I didn’t expect 2026 to be a good year for most of the market and shared it extensively, especially for the stocks most of social medias were looking at, and the last months have proven me right with most of them strongly sold or really destroyed in some cases - losing 50% plus of their value in some cases.
And finally, this month, the S&P500 broke its weekly 50 on growing volume after months of weakness.
I’ll speak bluntly and as I see it: this might be the start of a bear market. I struggle to see why the market would push higher and will assume that any coming bounce is nothing but a bounce, an exit liquidity for traders. I will not take part on most of the market activity until I see strength again.
This is the main subject of this month investment plan. Why do I believe this and why am I being even more cautious now.
Liquidity
As shared on my February review, the single most important factor to a bull run is liquidity. This is what most investors who focus on fundamentals and intrinsic value only misunderstand. It isn’t because you sell the best bananas on the world that you’ll be billionaire. If no one has the money to buy your bananas… Then you don’t make money.
If no one wants to buy your stock… It won’t go up.
Now fundamental investors will ask “Why wouldn’t I want to buy Meta at 20x earnings? It is so cheap!”. No, it isn’t. Valuation is relative, 20x earnings is cheap for someone who has money to buy it, but it isn’t necessarily everyone. As long as most think that, the stock will go up but the opposite will also be true. There is a factor of possibility first - some cannot buy, and a factor of wish - some don’t want to buy. The first is mathematical, the second is sentimental.
Mathematically, global liquidity is shrinking with constant - not increasing, fiscal policies, stable interest rates for longer around the world and no real stimuli, while the current geopolitics are shrinking liquidity even more.
The situation is Iran isn’t improving at all and I believe lots are losing faith in Trump and his institution as the messages are changing everyday from total annihilation to let’s make peace tomorrow, the latest - at time of writing, being “we’ll get out and let Hormuz close” while also sending more soldier in the region.
Inconsistent, growing uncertainty, crushing will to invest - but that’s about sentiment and we’ll dig this after.
On liquidity, the situation impacts oil’s supply chain which reduces capacities to invest because of global inflation. If prices increase, everything we pay is more expensive leaving us with less money for other activities, purchases or investments, and what is true for individuals is also true for companies.
I said last month I wouldn’t be worried until we see weeks of disruption without short term potential resolution.
Still, it is impossible to know what will happen. You know what you lose, never what you get. The removal of Khamenei doesn’t necessarily means peace and prosperity from Monday. It remains to be seen who will take the lead and what their objectives will be; if its army commander or someone with less restrain takes command, it could lead to a long fight.
We still have uncertainty. Maybe less worries than if Khamenei held the reins. Nothing is certain. As I write this - Sunday lunch in Europe, missiles are still flying, commands of the Iranian regimes just went to the next one and the Strait of Hormuz is blocked. The question is can this be sustained and for how long without a stable decisional structure in Iran.
There’s no point trying to predict Monday’s open, it will depend on what happens in the next hours and we could have another very eventful week end into a non eventful week. Or an eventful week. I talked often about weakness in the market lately and that could be another excuse for sellers to continue their biding.
We are at a month of disruption now, effects on the economy are real and won’t be fixed that easily even if we were to reopen the canal today, and no countries will be immune to the consequences. Even America who has no/very limited exposition to Middle East oil will see inflation due to globalization. Any product manufacturing process goes through clear steps.
Material extraction → Transformation → Manufacturing → Commercialization.
If any of these step get more expensive, the final product will be more expensive and as everything - most things, in the U.S. are imported then the life cycle of their products manufacturing will also be impacted by oil spikes.
Global oil disruptions affect the entire world.
Some places will be worse than others – notably countries getting their oil directly from the Middle East as everything will get more expensive there, but no place will be safe because of that globalization effect, while oil will also get more expensive even from other geographies as the total supply shrinks which increase demand on a shrinking supply.
If China bids for Canadian oil above what the U.S. pay for it, Canada will sell to China at a higher price or the U.S. will have to compete for it. All those dynamics on a mandatory resource for every country will generate inflation, already has and it will only get worse each passing day now.
I see it in Portugal and in Europe already in my daily life, gasoline prices are up ~20% compared to a month ago - this is real life not data set. Imagine the impact on a family who drives 40km every day. And imagine at the size of a business which uses oil daily for producing a toy, food, clothes or electrical services.
If every household/companies expenses in Portugal rise ~20%… Money spent cannot be spent again, which means lower consumption, less leisure and spending, less investing, even if stocks are “cheap”. Can’t buy stocks if they have to buy gasoline. that phenomenon is also true for companies - who could buy back stocks or invest in their operations; and that will happen worldwide.
Inflation is a vicious cycle. Less money, consumption, investments lead to decrease in revenues for companies, earnings, investments, less liquidity which in turns reinforce the circle.
You’ve heard me say often that the market works on liquidity first. Sentiment second. Fundamentals third. We’ve covered liquidity, why it dried and why it’ll continue to dry.
Sentiment
Our bigger problem lately is the wish to buy.
Individual investors and institutions need a reason to buy stocks and if you believe “Meta is at 20x earnings!” is enough, well… You’re wrong. Institutions and big players don’t invest that way, they have frameworks/conditions for the bulk of their liquidity, they are risk averse.
Leaving in our social media bubbles it looks like everyone is looking at earning multiples compared it to historical; but that’s not investing, no serious players work that way. That’s wishful thinking that the future will be identical to the past, and it never is.
The market needs optimistic catalysts to move higher, buyers need to see a positive future to spend their cash - which is needed for other things today, on stocks, they need to believe that tomorrow’s prices will be higher than yesterday. Why would you invest if you expected tomorrow to be worst?
Stability and certainty is what the market needs.
For quarters, the market had things to look up for. CapEx spending, slowdown of inflation, return of consumption, AI and its benefits in costs/growth, plus everything this new revolution brought, rate cuts, tariffs optimism, etc… There was always a reason for the situation to get better, clearer. Most of those are behind and I struggle to see what could push optimism forward in today’s situation while data are going to show inflation spikes - this isn’t a maybe anymore.
A gloomy situation with falling stocks increase negativism, triggers profit taking, making the situation more gloomy, with real financial consequences on companies, triggering more sales, pessimism, etc… Momentum is a self reinforcing mechanism which starts and ends in extremities, and we might have seen the bullish extremity.
There’s nothing to look up to, except maybe the retreat from Iran without victory and the reopening of the Hormuz straight but even then, liquidity is hurt and inflation will happen. The only question is how much - more each passing day?
Why take risks in such uncertain times without clear positive catalysts?
Liquidity first. Sentiment second.
Both are in the gutter.
So What?
Look, if you read me since some time, you know I am not a doomer. I am an optimistic and I love to invest, but I also know how to call a cat a cat. We can call it a dog if we want but it still won’t bark.
The situation is shit and even an end to the war in Iran wouldn’t fix it. Damages are done, now let’s see how much damages will be done and how the market will react. Of course good news would trigger optimism but as I said: from now on, every bounce should be considered as nothing but a bounce, an exit liquidity for traders.
The silver lining is that we have systems.
Good systems, which work in any kind of environment and protect our capital while forcing our focus on strength. My view of the market has been pretty spot on for months now and my stock picking reflects this with a large overperformance YTD despites a tough environment where many got destroyed - X is full of -50% portfolio. This is because of my system, helping me to cut losers and focus on winers.
Contrary to what social medias preach, DCA in bear market isn’t the solution. Patience and focus on execution is.
If there is one write up that you have to read on my entire Substrack, it would be this one. I believe this methodology is what will set winners and losers in term of returns over the next months - it already has those last months. You don’t want to be early during a downtrend
Strength will come back, and as our favorite stocks are falling, opportunities also will. We don’t know when nor why, but seeing stocks like Meta, Palantir or AsteraLabs fall means I’ll get to buy them later on.
So I’ll have the same conclusion than last month, while being more pessimistic myself.
I have no conclusion to give during uncertain times and as much as I like to share the situation as I see it, the only thing we can do as investors is follow our system, here to protect us from this kind of situation. If we bought great names at great prices and in great setups, we will be alright. If they break their setups, those names were maybe not as strong as we thought and that is fine. Decisions can be taken then.
Follow the system. Don’t play Pokémon. Preserve capital.
This is what I will be doing for the months to come. Sit tight on my positions and the few sectors which behave well, cut if they stop behaving, observe my watchlist until green lights turns on, with uptrend starting on large volume, so I can go all in as the market finds a new wave of optimism and liquidity.
Portfolio & My Focus
Even during a global bear market, there’s a bull run somewhere, opportunities to catch, sectors to dig and things to learn. There’s always an asset going up, even if that assets is the dollar.
We’ve seen in over the last months with all the opportunities shared on this Substrack and their performances. If you follow me since ~6 months, most of the thesis you received were outside of tech and performed wonders (Nutrien, Darlings, Smith & Wesson, Halliburton, Schlumberger, SolarEdge, Huntsman…).
Not all of them did, of course but discipline with a clear system cut losers fast and let winners run, resulting in a 34.5% YTD alpha on the market, all shared publicly and for free on my website.
This isn’t my personal portfolio, it is an equal weighted portfolio of all the thesis shared on here following my investing strategy - buying the W50 breakout retest with high volume on strong fundamentals and closing the position if the stock breaks it on volume for a handful days.
This website is the visualization of my stock picking performance.
And I’ll simply continue to follow my strategy, boringly, with a clear focus on strength which still exists today, in photonics first, supported by continuous CapEx even during uncertain economics, the energy vertical is also obviously very strong while many other defensives are also doing great - materials namely.
The portfolio is only holding on 9 positions, I personally am holding 3 after closing some losers this last days, without any pleasure…
The hardest one to sell was Transmedics ~$110 as the stock broke its W50 on high volume despites strong fundamentals. There isn’t much to do in those situation but respect the system and let go, despites personal convictions, despites what looks like an amazing opportunity. If the stock were to have such a strong potential, the market will reverse and give me another opportunity, on high volume and strong price action. Until then, I’ll continue to follow the company, but from the sidelines.
This trade returned 48.75% vs. 23.88% for the S&P 500 on the same period, a 24.87% alpha over 11 months.
Alibaba was a different kind of deception as the market had some reasons to sell it: its liquidity is being spread on two different verticals while it should be focused on AI. Weather a great management decision or forced by competition, this will slow down AI expansions and the market won’t buy a company focused on e-com, it proved it with Amazon, MercadoLibre and Sea Limited.
This trade returned 53.01% vs. 7.26% for the S&P 500, a 45.75% alpha over a year and three months.
I also had to close UPS which fell below its W50 on weak price action following the war in Iran; logical as the transportation business is heavily impacted and a restructuration in the middle of an energy crisis won’t be easy to succeed…
This trade returned -4.47% loss vs. -2.09% for the S&P 500, a -2.38% loss over two months.
Lastly, Lululemon as the sector did not convince with its latest earnings and the stock lost its local bottom. We do not hold weakness.
This trade returned -13.83% loss vs. -1.26% for the S&P 500, a -12.57% loss over three months.
And that leaves us today only holding winners and strength, four of them linked to the energy/materials sector performing really well, one holding on AI compute, one cyclical hardware forgotten by the market and three new names on a sector in very high demand: photonics.
Nine stocks, two categories.
The Runners
All these names are great holds but have been identified months ago and are simply running now. They’re just great names to hold with strong narrative and improving fundamentals, maybe a trim here or there if one needs to rotate liquidity, but nothing more.
Halliburton and Schlumberger are in this situation. Identified months ago, running very well and pretty high but with much more room to go especially as the conflict in Iran will require their service either to find oil or repair damaged infrastructures. We found the trend, studied valuation and fundamentals, and are now riding it.
I could put Nebius here as well. On the paper, we are back around the W50 and this is where we accumulate. Fundamentally, everything is strong but sentiment and liquidity are weak. And I am curious on how the market will react on those names with rising electricity costs which should increase Opex and hurt margins as their business is about electricity consumption. Nevertheless, the system says this name is a hold or a buy as long as we hold this W50 even if its sector is weakening.
They aren’t in the screenshot as the retests weren’t given, but I have to add Nutrien (up 8.4%), Darlings (up 46%) and Smith & Wesson (up 35.4%) to this list, which are in the same situation: perfect uptrend to ride quietly. Those weren’t counted in my YTD performance, which would be even better including them.
The Buyable
My photonics names remain the most interesting buys in the market to my opinion. The sector is one of the only strong in tech with very bullish narrative and fundamentals funded by continuous hyperscalers CapEx which won’t disappear because of some oil disruption.
Sure, they could be slightly reduced but that would hurt Nvidia and the likes, who depend on acceleration, not photonics who are a very niche business without much revenues and would benefit massively from a few billions spent their way - which is nothing compared to the $500B plus planned in CapEx FY26.
Soitec owns the technology to manufacture photonics wafer, the socle of everything, GlobalFoundries is the #1 worldwide SiPho fab and Silicom is the only temporary alternative to photonics, until the technology scales. The three company share one characteristic: they have a beaten down stock due to weak core business cycles over the last years.
Cheap stocks at the heart of the next technological wave for AI datacenter scaling, with perfect price action signaling strong accumulation at reasonable prices.
Nordic Semiconductor follows a comparable pattern, although it will be impacted by final consumer demand for AI wearables which could be lowered if inflation were to come back and push its cycle to a bit later if hardware companies were to slow production as consumers weaken. But the stock remains at a reasonable price for a large potential over the next years.
SolarEdge is without a doubt on par with photonics in term of attractivity, one of my favorite name in the current market. Fundamentals are excellent, narrative is perfect with the war pushing for more energy independence, and price action is as good as the rest with another breakout being retested ~$45.
The breakout volume wasn’t as high as I’d like it but I believe this name is a strong candidate for the next quarters/years at today’s valuation.
Huntsman is a bit more messy. Higher oil prices mean higher commodity price to produce its material, but it also means less competition as the material sector was hurt by Chinese competitivity for years, and as an energy crisis would be heavier on Asia than America, it is possible that it hurts Chinese competitivity, while material and chemicals prices are rising, giving a second hedge to the company. I believe the entire chemical sector is really worth looking at and I’ll try to come with more names around this narrative - I have found a few but need a bit more research.
Looking Ahead
The month to come should be quiet. I have two sectors to study and will write about them if I find interesting assets: materials (a beaten down sector providing key chemicals or goods for recession proof industries) and optics (photonics are only one part of the vertical as to transport light, we also need lasers and other mechanisms which could see a strong narrative and revenue growth).
I’ll also continue to run my screeners regularly to find new opportunities the market like and share them if necessary. This is business as usual: follow the system.
We will also start earning seasons from mid-April, with too many interesting companies to list but count on me to share the most interesting data with you, related to the verticals we are invested or looking at closely.
As to conclude.
I am not very bullish for the months to come. We might bounce, and it seems like today is off a good start as Trump said the war wouldn’t last much longer and the Strait will open by itself when the U.S. retreat. That would be the best for everyone but first, who knows? Second, when? And third, what about the damages already down?
A bounce during a downtrend is nothing but a bounce. It can be violent and give hope to investors, especially now after 5 straight red weekly candles on the S&P 500, we could expect it! But as long as we’re below key moving average, it’s still just a bounce… It doesn’t bark.
I talked about that rotation for long, the logical next step is for the sectors liquidity left to fall, until they find a bottom - when bad news don’t punish the stock anymore, stabilize, and bounce again. This is what I expect for most of the market, each sector reaching the next step at its own pace. I don’t see why the S&P 500 would shot up to new highs without liquidity growth nor positive catalysts. We can always hope for some drastic measures from Trump to push the stock higher as its performance is tightly linked to its personality, but it’s hard to see happen… And if it were? Then my portfolio would shoot up with it as I’m only involved in strength.
In the meantime, there is always a bull run somewhere and it’s my job to find it. I’ll continue doing it, share strong sectors and soon enough, you’ll see me talk about Meta, Nvidia, Palantir, and all those names that deserve to be bought and rode.
Their time will come again, and we’ll be there to buy them.
Disclaimer: I am not a licensed financial advisor, analyst, or broker. This content reflects my personal opinions and investment decisions for informational and educational purposes only. I hold positions in securities discussed and may buy or sell without notice. Nothing here constitutes a recommendation to buy, sell, or hold any security. Past performance does not guarantee future results.
Always conduct your own research and consult a qualified professional before making investment decisions. I accept no responsibility for any financial losses.
Thanks for this. Great read as always! 🙏🏻
So what all positions are you carrying right now