TradeVern

I remember being 14 on a holiday in France, asking my dad for his phone to check how Apple's shares were doing. To me, it was a game—the price went up, a green bar appeared, and I was happy; the price went down, a red bar appeared, and I was still fascinated. I’ve always been enthralled by what makes a company valuable. Without sophisticated resources, on the same holiday, I picked up an autobiography called Elon Musk, teaching me an invaluable lesson: the people behind a company are just as important as its financials. You can have your views on his ownership methods in the present day, however his rise to wealth was certainly one characterised by grit, determination, and immense leadership. A character who taught himself rocket science in the development of SpaceX exemplifies the level of commitment a start-up company needs to reach for the stars (no pun intended). His commitment to reinvesting profits from the likes of Zip2 into PayPal, and then investing over $100m from eBay's acquisition in 2002 to grow SpaceX despite three failed first tests and public scrutiny exemplifies qualities of good leadership. This perspective has fueled my interest in finance, specifically IB and Private Equity involving ECM, (tech) startups, and IPOs. I now look to the future with a strong interest in private equity, building the skills and knowledge to succeed in this field.

Overview

In June, my investing journey began, thus starting my portfolio at £0. By the end of the month, my portfolio had a value of £616.70. With £580 deposited throughout the month, my return of £36.70 was a 6.33% ROI. In comparison, the S&P 500 saw growth of 5.11%. Thus, June saw good returns, beating my benchmark (S&P 500) by 1.22%. My portfolio consisted of £143.11 in Alphabet, £139.72 in Nike, £115.7 in Microsoft, £96.47 in JPMorgan Chase, £85 in Vanguard S&P500, £10.27 in H&M (Given for free as a sign up bonus). My only sale from this month was Nike for £157.98, depleting my stake in the company to £0. Reasoning for this was Q2 earnings report beating expectations, leaving me with a 13.1% profit from my investment - something I thought could be better invested elsewhere. Whilst seeing huge returns was a very exciting introduction to my investment journey, I knew not to expect the same spikes in my other investments so quickly.

In July, my portfolio saw growth from £616.70 to £871.44. Taking into account £200 was invested throughout the month, my portfolio saw returns of £54.74, representing a 8.88% return in July. In comparison, the S&P 500 experienced growth of 2.2%, Dow Jones of 0.1%, and NASDAQ of 3.7%. Thus, July saw great returns, beating my benchmark by 6.6%.

In August, my portfolio saw growth from £871.44 to £901.44. Taking into account £115 was invested on the 1st August (in Alphabet), with £120.01 withdrawn at the end of the month, my portfolio saw returns of 4.016%. In comparison, the S&P 500 returned 2%, Dow Jones 3.8%, NASDAQ 0.9%. Thus, August saw good returns, staying a few % above the market.

Individual stocks

Alphabet

Alphabet displayed bullish growth of 9.08% across July, making it my most profitable investment for the month. On the 21st July, I doubled my position from £143.11 to £283.86, further adding £115 on July 23rd (total £398.86). Reasoning for this was due to a multitude of factors:

Q2 earnings report released on the 23rd
Alphabet's P/E ratio hovering around the 18.59 mark (the lowest of MAG 7) indicated a relatively undervalued stock (For reasons which will be explained below)
Market research indicating strong future growth

Valuation

Google has faced a P/E ratio of around 18.59 for the since June. This measures the price of a companies share in relation to its earnings per share (i.e. how much investors are paying for $1 of company profits, in this case $18.59). Being considerably lower than other mag 7 companies like Tesla (182), Microsoft (36.5) and Amazon (41.6), this indicated that the stock was undervalued relative to its earnings potential. However, it is important to note that this percieved 'undervaluation' was not without reasons, as google has been facing a range of challenges in the eyes of investors.

Firstly, regulatory scrutiny has been a significant concern for Google. Governments worldwide have been increasingly focused on regulating big tech companies, and Google has not been exempt from this scrutiny. For example, the Antitrust division of the department of Justice alleges (originally filed in Jan. 2023) Google has abused monopoly power, stiffling competition through anti-competitive means like censoring ads for over 15 years. Possible consequences could involve the selling of Googles search engine, Chrome, from Alphabet, as well as its android OS and breaking up of google's deal with Apple to be the primary search engine through safari. Antitrust investigations and potential consequences could impact the company's profitability and growth prospects thus reasoning their 'undervalued' P/E ratio.

Alphabet, as a whole, is a high quality company. Its services include: Google (search), Deepmind(AI), Cloud (Data), Youtube (Streaming), Waymo (Robotaxi), Network (Ads). This shows how Alphabet is operating in some of the largest and fastest-growing total addressable markets (TAMs), providing very promising potential for high growth and profits. Google's existing power as a MAG7 enables it to diversify these different sectors with, in my opinion, no true threat to quality of management as Alphabet clearly has the resources (nearly a $3 trillion company) to fund their projects in AI, Robotaxi and more.

A brief criticism of Google's 'undervaluation' is the threat of AI. However, in the Q2 earnings report 2025, Google services (Search, Youtube Ads + subscriptions etc) delivered $82.5B renues - double-digit growth

For me, Google Cloud offers immense potential in the long term. Google Cloud is currently the 3rd largest cloud provider, with a market share of 11% (AWS 34%, Azure 22%). However, Google Cloud is growing at an impressive rate of 28% YoY, compared to AWS (12%) and Azure (20%). This indicates that Google Cloud is gaining market share and has the potential to become a major player in the cloud computing industry. Analysts on CNBCs 'the exchange' valued Cloud at $572B (September 1st), yet I view this as a low estimate. Despite the company not being profitable (yet), excellent revenue growth is coupled with huge operating margins (20.7% Q2 2025). Considering this figure only became positive in Q1 of 2023, I believe in the future, these margins will continue to grow.

Comparing Youtube to Netflix, Analysts valued YT at $446B (1st September). However, comparing to Netflix's market cap of $513B, it is of my belief that there is some more upside to YT. A really interesting video by Joseph Carlson. The US is streaming's biggest market, and streaming is becoming the US's biggest form of media content. In May 2023, Netflix took up 7.9% of US TV time, slightly lower than Youtube's 8.5%. 2 years later, in May 2025, Netflix held 7.5% compared to Youtube's 12.5%, exemplifying Youtube to be gaining a stronger position in streaming. Due to the recent explosion of streaming services, YT being a dominant player will hugely boost Alphabet's marketcap, thus incentivising me to strengthen my position in the company.

Macro

One thing to be cautious of in September is the potential for a US (and UK) interest rate cut. Wallstreet expects a 25 basis point drop. A cut in IR signals expectations of the economy to leave the peak in its 'cycle', encouraging growth in the demand-side of the economy. This can lower confidence in equities and investors may expect company revenues and profits to be hit by a downturn, thus potentially leading to the selling off of positions, hitting equities.

Portfolio development

When I opened my stocks ISA, my goal was to create a personalised portfolio of a few strong companies that I can track over the coming years. Whilst diversification is good and beneficial, it is in my opinion that holding too many companies (especially at my current level) can hurt investors as they struggle to keep up to date with relevant news. It is important to note that I am refering to diversification for the sake of diversification - if a strong company is found at discount value, with beliefs of strong growth in the future, then adding that business very well may be a net positive.At the moment, a large proportion of my companies are high growth tech companies, leaving me at larger risk to shocks. I will be looking to develop into other sectors, perhaps defence considering the seeming turbulence in global politics. Additionally, I hope to place a larger focus on dividend stocks, to benefit from compounding. This is something that will come with time as I grow in experience.

Vernacch.io