26 Aug 25th August 2025
Index Movement Last Week
| S&P500 | +0.3% |
| Nasdaq | -1.0% |
| Aussie ASX200 | +0.3% |
August has a reputation as being the month most likely to experience selling. I was expecting to see a similar thing this time around. The market has a wobble in early April when Trump announced his tariffs but quickly came back and added a whopping 27% from the April lows in just 4 months.
Heading into August I was thinking,
“27% in 4 months and now we hit August which is known for selling. It would be no surprise to see a pullback here of some kind. That’ll be perfect, I’m sitting on some cash, I’ll use that pullback to add to my positions”
Well, I’m still waiting and the month is almost over.
There has been no selling to talk about. Yes, last week we had 4 down days and I started to get excited. But that was all earased in a single session on Friday.
When buyers jump in at the slightest dip, it means bulls are on a rampage and jumping over each other to be the first in. The chance of a significant pull back now is small. Much more likely is a bull run into year end.
That being said, August is turning out to be the month where winners take a breather and buyers go looking outside the usual crop for their next purchase.
Our Top 30 Strategy is up almost 12% for the month which is a good indication of this rotation.
A couple of interesting things caught my eye this week, and I am beginning to wonder if the US is becoming China.
First was the US Federal Government taking a 10% stake in Intel (INTC). I have a thoughts on this.
Firstly that it makes sense for them to do so on the basis of national security. Intel is the only chipmaker with facilities inside the US that can manufacture chips. But then again, not the chips that really matter.
Intel’s history is an interesting one. They owned the chip market since computers first made their way inside retail homes. Nearly every computer relied on an Intel processor. AMD did try to compete but never really gained significant market share. Intel’s place as leader was secure.
Intel was sneaky. They opened ports on a motherboard to allow third parties to plug extra gadgets in. I remember buying a separate sound card and adding that to my PC. Once Intel saw which gadgets were popular they then added their own version and cut the third parties out.
They tried a similar things with Graphics Cards, originally letting NVidia and AMD plug their products in, but then developed their own “on-board” graphics. Intel failed here though as the graphic card market developed too fast for them to keep up. It became too specailised making CPUs and could not keep up with GPUs
After that it completely misread the mobile computing phase and lost all its growth story. The stock fell right out of favour and has been for 15 years. Until recently where it has found some interest with AI cloud computing.
The point being, it makes CPUs. AI uses GPUs. I sort of understand the arugment for national security, but what I don’t understand is how Intel is going to really help with that. They don’t have the equipment to build them and they don’t have the knowledge of how to either.
What I don’t like about this is the government taking a stake in a company. A 10% stake at that. Could you see Trump ordering the company to do something because he is a major shareholder? Or maybe replacing the CEO with someone he wants?
Wouldn’t be the first time.
He has been trying to talk Fed Chair Powell out of a job and now he is taking aim at another Fed member, Lisa Cook. Prior to being a Fed member, Cook bought two properties inside 12 months and said on her mortgage application for both that it would be her primary residence. Trump is using this fact to try and remove her. He might succeed.
One Fed member resigned recently and Trump replaced him with someone he likes already. If Trump is successful with Cook, then no doubt the same thing will happen. Powell’s term is up next May. After which you would expect Trump to have enough support inside to effectively control interest rates.
Which country does it sound like to you? A government who controls interest rates and owns parts of major corporations.
I don’t like it, goes against my capitalist nature. But the market does as it keeps rallying on the news.
United Health (UNH)
United Health has been a long term favourite of Capital 19 for both a capital growth and income. We have held it in both the Global Growth Strategy and the Dividend Growth Strategy. It’s not hard to see why.
The company has experienced some hard times in the last couple of years that has resulted in a 50% drop in the share price.
We see this as a good long-term buying opportunity
In 2024 it experienced the assasination of its CEO and a major cyberattack. In 2025 the DOJ launched an investigation into possible Medicare fraud and the company also announced a shockingly poor earnings report.
These events have led to where the stock is today.
But take a look at the long-term track record of growth
Yes, it has run into some hard times, but hard times do not mean “the-end”
United Health is a vertically integrated Healthcare provider with fingers in many pies. The stock price collapse is a rare event, driven by temporary cost spikes and cyclical headwinds, not a broken business model.
Total health spend in the US has been on an upward trend for decades, and that’s not expected to change.
We think the market is grossly overpricing the recent negative news and things will be back to normal next year.
Warren Buffet agrees. He recently announced a $1.6 billion position in the stock and other recent investors include Renaissance Technology and Michael Burry of “The Big Short” fame.
Don’t buy this expecting a short-term return back to $600. But if you think like Warren and like to accumulate assets at low prices with a longer term holding plan, then this one is for you.
Warning
Stock values can go down as well as up. It is possible to lose 100% of your investment in a stock. Any advice given by Capital 19 is general advice only and does not take your personal circumstances into account and might not be suitable for you.