October: Software continues to be the strongest sector in the portfolio

The stock market recovered during October and again reached record levels. We were a bit cautious in our view of the market ahead of the report season as we expected many companies to suffer from supply problems. To this must be added that we now have a deficit of jobseekers in many segments, which has led to wage inflation in recent months.

We expect the delivery issues to offset the level of advertising that will be done during the quarter, reducing growth for several tech mega caps that rely on advertising.

Video game stocks continue to tank and Activision is down hard on its 3rd quarter report. The report itself was in line with expectations, but the delay of Overwatch 2 and Diablo 4 together with the personnel problems in Blizzard pressure the stock. However, we keep the share as we think that the management is now addressing the problem in the company at the same time that the valuation is at a 5-year low. Net cash is now also around 12% of the company's market value.

Software continues to be the strongest sector in the portfolio and we expect strong second half reports for the sector. We have already seen accelerating growth in the reports from Servicenow and Microsoft. We have now started adding a number of individual short positions to the portfolio after the turbulent start to the year.

The fund ended up 0.31% on the month and is now up 1.03% on the year.