👉 Consider Adding BTC + ETH To Your Portfolio in September

Together with XFunds

👉 Week in Review — Too Long; Didn’t Read:

Key Earnings Announcements:

• Salesforce’s revenue backlog climbs to $29.4 billion

• Broadcom’s AI-specific revenue skyrocketed +63%

• Lululemon experiences sluggish sales in the US

Additional Analysis:

• Seasonality suggests August and September are wonderful months to accumulate cryptocurrency before an explosive move higher.

Happy Sunday.

Before we get started, we wanted to offer a warm welcome to the +612 new subscribers who joined us this week, and the 3,904 of you who joined us during the month of August!

In case you’re new around here, I’m Austin Hankwitz — I’ve been publishing earnings analysis on publicly-traded companies for over half a decade. My podcast, Rich Habits, has hit #1 on Spotify’s Business Podcast chart four times since it’s inception only two years ago.

At the start of 2023, I began my journey of building a $2M Dividend Growth Portfolio from scratch. This twice-weekly newsletter is how I keep you all updated on my progress.

For me, early retirement means $2M invested. For you, it might mean something else. Regardless of your early-retirement number — I hope these weekly synopses of my portfolio progress + what’s been happening in the markets helps you on your own journey.

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👉 Portfolio Updates (YTD Performance):

The stock-section of the portfolio is up +14.3% YTD, above both the S&P 500’s +10.7% and the Nasdaq-100’s +12.9%. This outperformance is catalyzed by the “Long Risky” subsection of the portfolio delivering +31.0% YTD returns. Candidly speaking, it’s the only subsection of the stock-only portfolio that’s outperforming the S&P 500 — as the Long Technology section lags the S&P 500 by about -3% and the Dividend Growth Stocks section by about -5%.

This is a prime example as to why it’s so important to ensure you’re investing in such a way that aligns with your risk tolerance. Do I want exposure to high-octane growth stocks? Of course. Do I want it to be my entire portfolio? No, I want to have some steady dividend growth names, some Berkshire Hathaway, among others.

Although I haven’t added any of these names yet to the portfolio, I’m very much focused on adding exposure to two specific sectors of the market:

1) Small caps

2) AI infrastructure

I’ll share more about the AI infrastructure later, but you all should remember from last week’s Week in Review as to why I believe small caps will do exceptionally well over the coming 9-18 months.

The monthly income portfolio continues to do its job — provide tax-efficient monthly income! Can’t recommend these NEOS funds enough.

SPYI just enjoyed its 3-year anniversary — I highly recommend everyone to read this analysis we published about the ETF on Friday if you haven’t already. SPYI quite literally is in a league of its own — outperforming JEPI and XYLD by +20% and 17%, respectively.

Bitcoin is hovering around $110K, and in my opinion there’s still +20-30% upside to be had from here. Additionally, Ethereum is very much getting read for its next leg higher — hopefully propelling it above $5K.

👉 Key Earnings Announcements:

Salesforce’s revenue backlog climbs to $29.4 billion, Broadcom’s AI-specific revenue skyrocketed +63%, and Lululemon experiences sluggish sales in the US.

• Salesforce (CRM)

Key Metrics

Revenue: $10.2 billion, an increase of +10% YoY

Operating Income: $2.3 billion, an increase of +30% YoY

Profits: $1.9 billion, compared to $1.4 billion last year

Earnings Release Callout

“We delivered an outstanding quarter to close out the first half of the year, with strong performance across revenue, margin, cash flow, and cRPO—and we remain on track for fiscal 2026 to be a record year with nearly $15 billion in operating cash flow.

“Our second quarter results highlight our ability to drive profitable growth while helping our customers and ourselves become agentic enterprises. We exceeded all our financial targets while achieving our tenth consecutive quarter of operating margin expansion, delivering strong returns and maximizing value for our customers and shareholders.”

My Takeaway

• Broadcom (AVGO)

Key Metrics

Revenue: $15.9 billion, an increase of +22% YoY.

Operating Income: $9.8 billion, an increase of +37% YoY

Profits: $4.1 billion, compared to -$1.9 billion last year

Earnings Release Callout

“Broadcom achieved record third quarter revenue on continued strength in custom AI accelerators, networking and VMware. Q3 AI revenue growth accelerated to 63% year-over-year to $5.2 billion.

Consolidated revenue grew 22% year-over-year to a record $16.0 billion. Adjusted EBITDA increased 30% year-over-year to $10.7 billion reflecting strong operating leverage. Free cash flow was a record $7.0 billion, up 47% year-over-year. Consistent with our commitment to return excess cash to shareholders, we returned $2.8 billion to shareholders in the third quarter through cash dividends.”

My Takeaway

• Lululemon (LULU)

Key Metrics

Revenue: $2.5 billion, an increase of +7% YoY

Operating Income: $523.8 million, compared to $540.2 million

Profits: $370.9 million, compared to $392.9 million

Earnings Release Callout

“While we continued to see positive momentum overall in our international regions in the second quarter, we are disappointed with our U.S. business results and aspects of our product execution.

We have closely assessed the drivers of our underperformance and are continuing to take the necessary actions to strengthen our merchandise mix and accelerate our business. We feel confident in the opportunity ahead and plans we have in place to drive long-term growth.”

My Takeaway

👉 Consider Adding Bitcoin and Ether To Your Portfolio

Seasonality suggests August and September are wonderful months to accumulate cryptocurrency before an explosive move higher.

In the financial markets, seasonality is abundant. By seasonality, I’m alluding to the historical performance of specific asset classes throughout the year. For example, the “September Slump.”

This phenomenon showcases the historical performance of the S&P 500 during the month of September. Over the last 90 years, it has averaged a negative return (56% chance) — and when it is negative, it experiences an average decline of -1.14%.

There’s seasonality with all types of things — performance, time of year, asset class, etc. You name it, there’s some sort of historical pattern to be assumed.

One of my favorites include where we are right now in the S&P 500…

The S&P 500 is now up +10.1% year-to-date through August. Historically, this has often boded well for the remainder of the year (September through December). Over the last 100 years, there have been 23 instances where the S&P 500 delivered year-to-date returns of +10% to +20% through August — and in 21 of those 23 cases the index climbed higher over the following four months, with an average gain of +7.5%.

Seasonality tells us the S&P 500 will continue to trend higher over the remaining four months of the year. Exciting!

You can take seasonality to better understand any asset class and its historical performance — including cryptocurrency.

The above chart illustrates the seasonality of August and September for Bitcoin (red rectangles). Historically speaking, during the months of August and September, Bitcoin trades down / sideways before exploding higher.

Here’s another chart illustrating this historical observation since 2015.

At the moment, we’re experiencing that “slump” with Bitcoin — therefore cryptocurrency as a whole.

In my opinion, Bitcoin will continue to trend sideways (or lower) over the coming months before exploding higher — causing “Bitcoin Dominance” to trend back toward 65%. If history repeats itself, we would see some sort of “blow off top” in the coming 2-3 months before “alt coins” (defined as any cryptocurrency that’s NOT Bitcoin) experience a similar rally.

This rally could be exacerbated by the Fed cutting interest rates, forcing investors to find “risk-on” assets to buoy their returns as the risk-free rate declines.

All that to say… consider adding some Bitcoin and Ether to your portfolio. They might surprise you over the coming quarter or two.

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