High Conviction Buy on SMH for Semiconductor Exposure

11 days ago

"So, if I'm going to ignore the traditional balanced approach and rules, then I would be investing purely on where the constraints and the cash flows are right now. With that in mind, I would shift to a strategy of bottleneck and brains. I'm really waiting this based on urgency. So, where is the money flowing today versus where it might be flowing in 10 years? First is the engine room where I'm allocating 40%. This is where the cash flow is today and everyone knows it. You simply can't underweight a sector that's growing at 40% a year. So, I'd be putting 25% directly into the VANX Semiconductor ETF of SMH. This is my highest conviction hold because chips are the new oil of the 21st century. In my mind, 20% wouldn't be enough for the sector that's driving the entire stock market."

The speaker explicitly recommends allocating 25% of the portfolio to SMH, the VANX Semiconductor ETF, underscoring its role as the engine of the current cash flow and its high-growth potential driven by semiconductor demand. He emphasizes that chips are critical in powering the market, making SMH a high conviction buy despite no explicit price target.

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