February was rough. My equities portfolio ended down 3.7% for the month. The S&P 500 dropped 0.9%. Nobody escaped unscathed.
YTD I’m still up 4.0%. January’s strong run gave me enough cushion to absorb February without completely falling behind.
The Numbers First
| Jan Return | Feb Return | YTD Return | |
|---|---|---|---|
| My Portfolio | +7.7% | -3.7% | +4.0% |
| S&P 500 | +1.11% | -0.9% | +0.49% |
Where I Was Positioned — And Why It Hurt
Not all sectors got hit equally in February. Here’s how the major sectors fared — and how my positions tracked against them. The ETF column shows the benchmark index fund for each sector — it’s a quick way to see how the average stock in that sector did, versus how my specific picks performed.
| Sector | ETF | ETF Feb | ETF YTD | My Allocation | My Feb | My YTD |
|---|---|---|---|---|---|---|
| Energy | XLE | +11.84% | +23.13% | 10.2% | +4.08% | +19.38% |
| Materials | XLB | +5.94% | +16.87% | 23.5% | +4.71% | +24.48% |
| Industrials | XLI | +7.49% | +13.91% | 20.5% | -2.98% | -7.19% |
| Consumer Staples | XLP | +7.34% | +14.39% | — | — | +1.47% |
| Utilities | XLU | +10.05% | +10.52% | — | — | — |
| Healthcare | XLV | -0.43% | +1.69% | 15.2% | -9.72% | -16.25% |
| Comm. Services | XLC | -0.89% | -0.85% | 1.8% | -9.55% | -1.83% |
| Technology | XLK | -3.47% | -2.06% | — | -9.07% | -4.70% |
| Financial Services | XLF | -1.70% | -4.14% | 2.2% | -27.27% | -36.77% |
| Consumer Discretionary | XLY | -4.31% | -1.98% | 26.5% | -10.24% | -1.33% |
ETF source: Seeking Alpha, as of February 28, 2026. My Feb figures are exact calculated returns weighted within each sector. YTD compounds January and February.
Looking at that table, two things jump out. First, the market in February rewarded exactly the sectors I’m underweight in — Energy, Materials, Industrials all green at the ETF level. Second, the sectors I’m most exposed to — Consumer Discretionary and Healthcare — were among the worst. That’s not bad luck — that’s the reality of running a concentrated, high-conviction portfolio through a month nobody could have scripted. A war in the Middle East and an AI wave gutting SaaS valuations weren’t in anyone’s February forecast. Everything felt the impact.
My two holdovers from my previous strategy — NOG in Energy and ALB in Materials — did their job. NOG didn’t fully keep up with the energy sector because it’s a smaller, more niche operator than the ExxonMobils of the world, and my covered calls capped some of the upside. But it still made money. ALB had a strong January, up nearly 19%, which was the biggest single dollar contributor to the portfolio’s January gains. It followed that with a further 4.71% in February, putting my Materials allocation up 24.48% YTD — the strongest performing sector in my portfolio by a wide margin.
That said, I’m starting to think about trimming ALB in the months ahead. When people are squeezed by inflation, they stop buying big-ticket items — including electric vehicles. Fewer EV sales means less demand for batteries. Less demand for batteries means less demand for lithium. ALB is essentially a lithium company, so if that chain of events plays out, the stock will feel it. At 23.5% of my portfolio it’s a big position. I’d rather lock in some of these gains than watch them erode.
The pain came from Consumer Discretionary — my biggest allocation at 26.5% — and also the worst performing sector in February. I actively trimmed through the month, bringing it down from 36.1% to 26.5%. Still, on a YTD basis my Consumer Discretionary positions are slightly ahead of the benchmark — small comfort, but I’ll take it.
Healthcare looked ugly on paper — down 9.72% — but that’s almost entirely one stock: Doximity. Strip out DOCS and the rest of my healthcare holdings (OVID, NVO, WUXI, ULG) were roughly flat to slightly positive for the month. One bad earnings event shouldn’t define the whole sector thesis.
Industrials is the one that stings most to look at. The sector benchmark was up 7.49% in February while my picks went the other way. But it’s not a fair comparison — the benchmark is full of US defence contractors that rallied on government spending. My bets are almost entirely on Chinese autonomous driving companies — PONY and WRD — a completely different story.
Ironically, China is actually growing faster than the US right now — GDP forecast at 4.5–4.8% for 2026, more than double the US rate — and the part doing well is precisely what I’m betting on: high-tech manufacturing and EVs. The real drag isn’t fundamentals, it’s the China discount — the blanket markdown markets apply to Chinese stocks regardless of business performance. That’s frustrating as a holder, but it’s also where the opportunity sits. Waymo and Wayve aren’t publicly listed — PONY and WRD are the closest you can get to this theme as a regular investor. February wasn’t their month. The thesis hasn’t changed.
February’s Three Headwinds
February felt like everything bad was happening at once.
AI wave. This one hit close to home because I believe in the AI thesis — and yet watching it gut software valuations in real time was unsettling. Anthropic launched a wave of AI products — new models, agent tools, enterprise integrations — all within weeks of each other. What people started calling the “SaaSpocalypse” wiped an estimated $1 trillion from software market caps. ServiceNow down 34% YTD. Salesforce down 26%. Intuit down 34%. I don’t hold any of these directly, but the fear bled into everything tech-adjacent. Nobody knows where the disruption ends — and markets hate not knowing. Oracle’s Q3 results — reported as I write this — suggest AI infrastructure demand is real and growing. That doesn’t reverse the SaaS selloff, but it tells you the underlying investment cycle isn’t a bubble.
Tariffs — still unresolved. On February 20, the Supreme Court ruled that Trump had overstepped his legal authority in imposing sweeping tariffs. For about 24 hours it felt like there was finally some clarity. Then within a day, Trump reimposed them through a different legal route — this time capped at 15%, the maximum the law allows. States are already suing to block them. More court battles are coming. I genuinely don’t know what the final tariff picture looks like, and I don’t think anyone does. That’s not fear — it’s uncertainty, and uncertainty is harder to trade around than bad news.
Inflation refusing to cooperate. I called this in my 2026 strategy — inflation would stay stubborn. February confirmed it painfully. The key inflation reading came in more than double what economists expected. Annual inflation hit 3.1%. The S&P dropped 2.4% on that single number. Interest rate cuts are off the table now, which changes a lot of the math on the growth stocks I’m holding.
The Positions That Took the Hit
Doximity (DOCS) | Healthcare | -32.16%
This was the single biggest drag on the portfolio. Doximity dropped over 30% on February 6 after earnings — the headline numbers were fine, but guidance was weak. Management projected just 4% revenue growth when the market expected double digits. The culprit: heavy AI investment with costs outpacing revenue, plus pharma companies pausing ad budgets while waiting on new drug pricing rules.
The covered calls softened the blow slightly. I didn’t sell — valuation is lower, there’s a $500M buyback authorised, and management says January pharma bookings are the strongest since IPO. The moat is real, the pharma pause is temporary. Holding and watching how 2026 plays out.
Alibaba (BABA) | Consumer Discretionary | -15.00%
BABA dropped 15% in February on tariff fears and China sentiment — partly offsetting a strong January where the stock had rallied nearly 16%, leaving it down about 1.7% YTD through end of February. BABA had grown to ~14% of my consolidated portfolio, margins had collapsed from 20% to 4%, free cash flow flipped negative, and I still couldn’t answer clearly what Alibaba’s main business was. With Consumer Discretionary still my largest allocation at 26.5%, the risk/reward doesn’t justify holding at full weight — and I’m planning to rotate part of it into Sea Limited. The February drop gave me the push to act. But with China’s export data coming in strong and Trump scheduled to visit Beijing later this month, the macro picture has shifted slightly. I’m watching BABA earnings on March 19 before pulling the trigger. Full reasoning in my BABA vs SE post.
WeRide (WRD) | Industrials | -12.96%
WeRide gave back gains alongside broader autonomous vehicle sector weakness. Tariff fears hit Chinese tech names indiscriminately — WRD included. The China discount thesis I outlined in the Industrials section applies here too. Worth noting though: in February the US took its first serious step toward federal AV legislation — the SELF DRIVE Act cleared a House committee, explicitly framed as a response to China’s lead in autonomous driving. It’s still working through Congress, but the direction is clear. Full thesis in my WeRide stock analysis post.
What I’m Doing With All of This
March arrived with the US-Israel strikes on Iran still ongoing. On February 28, US and Israeli forces launched joint strikes on Iranian military and nuclear sites. As I write this, the YTD gain is gone. All of January’s cushion, wiped out.
I won’t pretend that didn’t hurt.
But consider this — the market split into two camps. Some panic-sold, which is exactly what created the dip. Others — those sitting on cash or who had trimmed their gold positions to free up capital — stepped in and bought the dip. I was in the second camp, selectively adding in February where conviction was high and prices had come down. The fact that gold also pulled back during this period tells you something: risk appetite didn’t completely collapse. Some investors were actively rotating back in.
The economic picture is uncomfortable, no question. Oil spiked on fears that a key shipping route in the Middle East — through which 20% of the world’s daily oil supply flows — could close. Higher oil means higher prices for everything: petrol, groceries, transport. That pushes inflation back up, which means the central bank can’t cut interest rates to stimulate the economy. Some economists are already using the word “stagflation” — that’s when prices keep rising but the economy slows down at the same time. It’s one of the hardest situations for policymakers to navigate. I’ve been sitting with that reality all week. It’s not pleasant.
Trump is already signalling the war could end “very soon.” Oil pulled back sharply on those comments and markets rallied — not because anything changed on the ground, but because sentiment shifted. That’s how fragile this market is right now. One statement, no ceasefire, and yet prices moved. Personally, I’m not convinced. Wars in the Middle East rarely end on a timeline that politicians announce in advance.
My core thesis hasn’t changed. I came into 2026 targeting Consumer Discretionary, Industrials and Healthcare as my key sectors — the war didn’t change that. If anything, it handed me better entry prices. I’m watching for prices to stabilise, keeping some dry powder in reserve, and staying selective. February and March have both been rough. But the 2026 strategy is intact — and I’m still building toward it.
Disclaimer: This is a review of my personal portfolio and performance for learning purposes. It is not investment advice. Always consult with a qualified financial advisor before making investment decisions.