In the second half of 2022, my wife and I built a new mini-portfolio. For balance, we included 10 UK value shares, plus seven US growth stocks. And guess which group of equities is doing great at the moment?
The three US shares below are among our biggest winners in 2023 (in no particular order). For the record, we bought all three US stocks on the same day: 3 November 2022, during the raised volatility before the US midterm elections.
Big winner #1: Apple
One stock I was very keen to buy was consumer-electronics behemoth Apple (NASDAQ: AAPL). Along with the wider tech sector, Apple shares plunged in the bear market that followed the Nasdaq Composite index peaking in November 2021.
On 3 November, Apple stock closed at $138.88 and ended 2022 at $129.93. As I write, it stands at $184.92. Thus, the share price is up 42.3% this calendar year and is almost a third (+33.2%) higher since 3 November.
Why did we buy Apple at that time? Quite simply, this outstanding growth stock had fallen into value territory, making it the best of both worlds for me as an investor. Today, this business is worth $2.9trn, which is more than the total worth of the UK’s FTSE 100 index (£1.9trn). Wow.
Star stock #2: Alphabet
Our second big winner from US growth stocks is Google owner Alphabet (NASDAQ: GOOGL). Like Apple, Alphabet stock plunged in the ‘tech wreck’ of 2021/22, before bouncing back from last year’s lows.
On 3 November, this heavily traded share closed at $83.49, within a whisker of its 2022 low of $83.45. As I write, it trades at $124.06. That’s up almost half (+48.6%) since 3 November. Also, it has leapt by almost two-fifths (+39.8%) since 30 December.
I was as keen to buy into Alphabet as I was to own a stake in Apple. For me, Alphabet’s commanding position in search and online advertising places a huge competitive moat around its business. Also, we were very fortunate with our timing, buying on the very day the stock hit rock-bottom. Nice.
Growth stock #3: Amazon
Retail colossus Amazon.com (NASDAQ: AMZN) was another US growth stock I was eager to buy. Again, its shares took a dive in the tech crash last year. But I held onto my firm belief that this stock would once again return to previous heights.
On 3 November, this popular share closed at $89.30. Right now, it trades at $125.49, which is a 40.5% uplift since then. Also, the stock is up by nearly half (+49.4%) this calendar year.
My rationale for buying into Jeff Bezos’s mega-business was simple: Amazon is so huge (sales of $514bn in 2022; over 1.5m employees) that it is almost an unstoppable powerhouse. And I love owning businesses that use vast economies of scale to grow revenues, margins, and earnings.
What lessons have I learnt from these gains?
First, for me, big is beautiful: I love owning stakes in mega-cap companies with powerful economics. Second, volatility can be my friend, which I took advantage of before the US midterms.
Third, when US growth stocks drop into value territory, I get interested. Finally, the pound’s 14.5% gain against the US dollar since 3 November has stolen a chunk of our gains. Ouch!
