Sorry, but here is another update

Sorry, another update, rather than give people any wrong impressions.

Over the weekend I read up on Livingo, because of the interesting threads on the board. I decided to take a small to medium position, and took a 4.6% position Monday morning in the pre-market and early morning of the regular market at an average price of $52.99. I’ll write up more of my thoughts about it later in the week

I also added to my Coupa position between $201 and $205. It’s now a 3.75% position.

Today I added some small amounts to my DataDog position in the pre-market. It was already up about 9.5% at $61.20 when I bought. It’s now a 20.5% position

To do all this I trimmed my Alteryx position by about 38% of its shares. It was a fairly easy decision for me. I thought “Alteryx is pulling in its horns, cutting hiring, reducing spending, and will still probably grow by 25% this quarter and this year. That’s pretty remarkable. But Livingo and Coupa are going all out and booming. Does it make sense for me to have 20% in Alteryx and just a couple of percent in Coupa and nothing in Livingo? No way.”

And today, we had Datadog accelerating its growth in the same months that Alteryx slowed from 75% growth to 43% growth, and Datadog seeing no negative effects from the pandemic as of yet. That was a no-brainer too. Datadog was already a 19.5% position though, so I wasn’t going to add as much. It’s now about 20.5%, but that’s not taking into account today’s price rise. Alteryx is down from a 20% position to a 12.4% position. Alteryx was seeing the pandemic as a headwind and riding it out, still growing the business, while Datadog, and Living were experiencing it as a tailwind, helping them to grow.

And I’m embarrassed to report how much my portfolio is ahead, but right now it’s up 61% year-to-date at a time when the market averages are still in very negative territory. That’s ridiculous!!! Well, how did it happen? I didn’t sell out at the bottom. I concentrated into high confidence companies that would do well in spite of the virus, and some that would do better with the work from home, etc. I told you what I was doing and why. I made some mistakes like selling out of Coupa and then having to buy back higher, but I don’t care. I expect to make some mistakes and then correct them.

Let me assure you I don’t have a crystal ball and don’t know if the stocks will continue up, or be down 5% tomorrow, or even later today.

Best,

Saul

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Saul, it has been so impressive to watch your performance throughout this year without trying to time the market.

I tried to time the market, and haven’t done as well. I did a good job of getting out before the big slide. I was up 33% in February and throughout March, my portfolio never went below where it started the year. I thought I was doing well. Getting back in was a lot harder. It’s easy to see the waterfall decline coming but what I learned is that it’s so much harder and more stressful (and impossible) to determine what is a dead cat bounce and what is a new and sustainable uptrend. I did buy back in successfully on the uptick, but then I sold after the two day decline at the end of the last week in April. The result is that I am now only up 43%, when I would otherwise been up just as much as you. Now I am fully invested again, only with less buffer in the case that there is another leg down.

I know it’s not a competition, but it’s hard not to want to compare my results to yours. It’s very ironic that I feel like an inferior investor when I am still beating the market 50% year to date.

However, I must admit that I truly am an inferior investor, and a young gun on my own learning curve. The lesson you taught me this year is “don’t time the market!!!”. I just count myself lucky I didn’t get hurt. It is true what you say, “If you try to time the market, you have to be right twice!” and it sure is a lot harder to be right the second time around.

In conclusion, I want to thank you deeply for again and again pointing out the downside of market timing strategies. I had to live it to learn it. I also want to thank you for so generously sharing your advice and your analysis. You’ve taught me and so many others so much about investing, and even if the market goes to zero tomorrow, we all would still have benefitted from everything you have shared.

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Hi Saul,

First and foremost thanks to you and all the contribuitors to this board. I’ve known fool for quite a while but only recently came upon this board and it’s been enlightening.

I understand that your trimming or adding of positions are based on your confidence level on each of those stocks, but i’m curious to learn if you have any quantitative approach or it’s more of a “gut-feeling” based on all of the quanti/quali information you already know.

I’ve been trying different strategies within a newly created portfolio. The last few months i’ve been taking positions every week, so i suffered a little of the downswing but took advantage of the up-trend as well. The best strategy so far is following this board and going into the Saas/Cloud companies as you do. So far I’m +43.78% YTD and quote astouned, as many here are, to see these returns when markets have melted down.

Many of the big positions i took following your approach(ZM, LVGO, CRWD, AYX, DDOG, etc.) i was able to get at discounts prices (considering all time highs). But know that many of these companies have proved themselves through the pandemic the prices have gone only skyward. So I’m a little hesitant because of these new valuations and also, and more important, i’m not finding a way to gauge individual potential to make the type of decisions that you’ve made.

For example: I’ve have a 8.57% allocation in AYX @ 101.65 Avg. Price. Which results in about 27% YTD. It’s one of the poorest returns on my top 12 positions but i believe it’ll get there and catch up with the ZMs +49%, LVGOs + 59%, DDOGs +73% and even TWL +91% YTD. So I can’t build a case for trimming and adding on some of those winners.

I do have cash and other positions that i’m definitly thinking or exiting (KO, HAS, DIS, T, etc.) but the same doubts arise in terms of where to put that proceeds. I’m sure i need to dig deeper and get to know these companies better (which i’ve been doing) but maybe you or someone else could provide some insight into this.

Thanks again for the invaluable knowledge and your generosity toward all of us reading. I hope i can start contributing to this board more and more.

Saludos!

Tincho

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It’s very ironic that I feel like an inferior investor when I am still beating the market 50% year to date. However, I must admit that I truly am an inferior investor, and a young gun on my own learning curve. The lesson you taught me this year is “don’t time the market!!!”. I just count myself lucky I didn’t get hurt. It is true what you say, “If you try to time the market, you have to be right twice!” and it sure is a lot harder to be right the second time around.

In conclusion, I want to thank you deeply for again and again pointing out the downside of market timing strategies. I had to live it to learn it. I also want to thank you for so generously sharing your advice and your analysis. You’ve taught me and so many others so much about investing, and even if the market goes to zero tomorrow, we all would still have benefitted from everything you have shared.

Thanks Bobby Be for your kind words. I didn’t start out as an ace investor either. It takes a certain amount of learning. I’m trying to help people speed up that learning cycle.
Best,
Saul

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I purchased Livongo very recently after reading posts on this board and doing a quick review of their numbers. But to be honest, my purchase was based mostly on their story and their current level of success. It’s up just shy of 25% since my purchase a few days ago. I think they have a lot of room to grow. I also think they have a lot of opportunities with expanding their service. As best as I could tell from their website they only monitor the most basic of vital signs: blood sugar (for diabetic patients), temperature, blood pressure and heart rate. The technology is available today to home monitor many more indicators of health status. Further, I think this pandemic will be an accelerant for their growth. Many office visits are a waste of time for the patient and the doctor. Replacing (or supplementing) periodic office visits with near real time remote monitoring just makes a lot of sense.

BTW, I have a Zoom meeting with my pain specialist tomorrow morning. This is my second Zoom video appointment with my doctor. Zoom has been getting a fair share of negative press lately. No moat and valuation appear to be the two primary reasons for beating up the stock. The security concerns seem to be mostly history at this point. I’ve taken both sides of the no moat argument. I remain long.

But more generally, I’m still wary, next quarter will speak to results under the pandemic. This quarter’s reports really don’t show much of the economic impact. I know, a lot of observers say the pandemic is already priced into the market. I can’t imagine that that’s true. Obviously I could be very wrong, again.

While I still think Alteryx is a great company, I think the next two or three quarters will not be good. They said as much during the conference call. You may call it timing, I think of it more as reacting to the climate, whatever, I sold covered calls. Options are OT so I won’t dwell on the details.

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