It’s a pleasure to provide the October portfolio update! Let’s dive straight in.
Performance
The portfolio returned 10% year to date, compared to 18% for the S&P 500 expressed in Euro. We see a first negative quarter after 18 positive quarters of investing in small caps. This happened while over 20% of the portfolio was in cash, so the actual stock returns were even worse, and especially when comparing to February levels, when the portfolio was at +22% YTD at one point.
This may be the start of 18 negative quarters:
Approach and past performance
The portfolio is currently not live available to subscribers. I’m afraid that would encourage too much copy-paste trading, exposing you too directly to my mistakes.
Many subscribers have done well doing their own analysis of my write-ups though, which have performed better, up 30% on average since pitch versus 16% for the S&P 500 over the same periods.
Some of these companies have really suffered lately, as oil prices affected interest rate expectations and gold prices.
Q3 2026 market events
In the last few months, global interest rates reached levels they had not seen since the early 2000s. While this did not stop the S&P 500 from rising, many investors are seeing declines in their portfolios.
While some of the largest companies, like Nvidia, Meta, Microsoft and JPMorgan benefitted from the rally in AI and in interest rates, most stocks have declined over the past weeks, because higher oil prices and higher interest rates are expected to hurt consumers’ purchasing power, and therefore demand for most businesses.
The chart below shows S&P500 breadth declining. The orange line indicates only 20% of stocks now trade above their 50-day average:
While I can’t predict the outcome of the Hormuz war, the evolution of interest rates, or the market sentiment in the coming months and years, I do take into account:
Be careful in this market environment. Especially construction stocks and gold-related stocks can suffer, which is why I reduced them earlier in the year, as discussed.
Finding exceptional small caps creates an advantage over the long term. Not all of them work out, and performance fluctuates, but over the long term, a solid strategy supported by due diligence should do very well.
Only invest with money you can afford to lose. That’s pretty obvious and it gets easier to understand in bear markets.
I will post some more comments on the drivers for the rise in interest rates later. There’s an interesting dynamic going on where the Iran war affects the Japanese yen, and the resulting Japanese central bank policy actions affect global interest rates, or should we say, bond prices…
For now though, let’s look at the portfolio.
Changes and Portfolio
In this section:
Full portfolio with % allocation and change vs last month
All portfolio moves and their rationale
Below is the portfolio as of October 2nd: