Portfolio Update 12/31/19
Happy New Year to everyone. It’s been a month and half since I posted my November portfolio update found here; https://discussion.fool.com/november-portfolio-update-34345699.a…
I have found doing these updates is helping me keep better records of my investing thought processes over time. Much like keeping a journal in life when you re-read in the future it helps you remember what your thoughts were at the time of writing. Hopefully others find this helpful as well.
My portfolio monies are NOT all in tax free accounts any longer. Thus I do have to worry about tax consequences of my trading actions for a percentage of my portfolio. So far this as not been an influence on my investing style.
Current Portfolio as of 12/31/19. Change since 11/16/19 -2.7%. 2019 YTD +13.7%. S&P 500 +31.4% Nasdaq +35.2% Dow +22.3% Stock Current % of Port % Change in port Market % of Port on 11/16 since 11/16 Cap AYX 27.0 29.2 -2.2 +6.8B ZS 8.7 20.0 -11.3 +6.0B ESTC 16.2 18.2 -2.0 +5.3B MDB 14.8 14.8 0 +7.6B ZM 15.6 12.4 +3.2 +19.0B CRWD 16.4 5.4 +11.0 +10.1B CASH 1.3 0
New positions since last portfolio update: NONE
Exited positions since last update: NONE
Trades between 11/16-12/31
Bought CRWD 12/12 $48.00 CRWD 12/17 $48.34 CRWD 12/17 $49.45 ZM 12/26 $67.66 Sold ZS 12/12 $45.24 AYX 12/17 $97.33 ZS 12/26 $48.18 ZM 12/30 $66.64
Thoughts on trades and companies for the month.
Ended up with small cash holdings as I am preparing to move cash from a taxable account to tax free retirement account at the beginning of 2020.
Number one holding AYX 27.0%. What’s to say, everyone on the board believes it a great company with great numbers. Seems to be the most held position by many on this board. I sold a little bit of my holdings just to increase my position in CRWD and ZM.
Number two holding CRWD 16.4%. Last portfolio review I mentioned that I did not have a high convection on the company and may even sell out of my smaller position. Well I increased my holdings to make it the second largest position. Bert likes it and many here have presented a great case for it. I read the c.c. and kept looking at the numbers and just decided it was a great opportunity. I would consider it the #1 idea for 2020.
Number three holding ESTC 16.2%. This stocks performance was -2.5% for 2019. It is one of the reasons for my portfolio’s underperformance. Even though I do not entirely understand the technology, I do feel like they have something special. They are growing quickly still. Everyone is concerned with the lack of earnings, so am I to an extent. I really look at this is a boom or bust stock for 2020. It may hold back my portfolio or it may lead it to outpace the market this year.
Number four holding ZM 15.6%. Higher valuation makes me a little uncomfortable. However the growth rate is so high, plus combined with profitablility. I kept thinking if I wait I might be able to get for better valuation, however what if the opportunity does not present itself? I believe in the companies growth prospects, so I jumped in with both feet.
Number five holding MDB 14.8%. So many of these stock have been covered on this board its hard to think of anything new to add. I have a sneakying suspicion that MDB will lag the market this year. I probably need to reduce my position.
Number six holding ZS 8.7%. ZS is one of the reasons my 2019 did not go as well as hoped. I tend to be slow to get out of a position. I believe the company will bounce back, just not sure of the time frame. The board has influenced me back down on ZS, if the product cannot sell itself, then is it really special? Kinda why I think ZM and CRWD are special.
Year in review for 2019.
Monthly returns Jan +12.3% Feb +8.7% Mar +2.2% Apr +2.6% May +1.6% June +4.7% July +4.6% Aug -3.6% Sept -11.6% Oct +1.1% Nov -9.7% Dec -2.7%
13.7% annual return on a year like the markets had is frankly not a great year. Looking back to see what moves I made that negatively influenced my returns. I started the year off strong (monthly returns below) and was up 44% at one point in July with a almost 40% cash holding. I inherited some monies this summer in August. I knew the money was coming in July and I knew that this would increase my cash holdings even furthur, so I started to invest more of my cash. It turned out to be at the crest of the year for many of the companies that I increased my positions, primarily ESTC, TWLO and ZS. I also increased my AYX position in early September which was much higher price than its current valuation. I continued investing the cash until November when that position went to zero. Valuation have slightly gone down from there.
I tend to trade in and out of positions throughout the year. However my portfolio is pretty consistant within a year as to the companies I invest. Below is the lsit of companies that I held this past year with at least greater than 1% position. NTNX definitely did not help the returns this year as well.
14 Stocks owned this year greater than 1% of portfolio in 2019 NTNX TWLO AYX WIX ZS SQ TTD ESTC NVTA MDB SMAR EBIX PSTG CRWD ZM
What if I had not traded any of my stocks or stock positions or added any new monies throughout the year what would have been my portfolio return from stock held as of 1/1/2019; annual return 32.9%. Just sitting still would have been better! However it would not have been as much fun!!
My 14 year returns for my portfolio are: 2006 8.3% 2007 6.2% 2008 -32.5% 2009 28.1% 2010 49.3% 2011 3.6% 2012 9.5% 2013 67.0% 2014 10.4% 2015 6.4% 2016 1.6% 2017 29.9% 2018 31.5% 2019 13.7% Total 16.6% average annually Nasdaq 21.4% average annually S&P500 11.0% average annually DJIA 11.6% average annually
There have been periods of my investing lifetime were I have had over 30+ stocks and where I have been very conservative and value based (2015-2016). There have also been times where I have had 3 stocks and very aggressive (2008-2010). I do not think there is one right way to investing. I believe everyone needs to find their own path and learn what style will make them successful.
I am working on my investment style. I obviously have a lot of room for improvement! However I do feel I have come a long way from where I started. Originally I would invest in TMF rec’s and would not even look at the numbers. I use to shy away from the “hot hands” thinking that if they increased in value so much so quickly that they were bound to fall if I were to buy them.
Over the years I learned when opportunities would arise. I personally feel there are some good opportunities for the stocks we follow on this board. I fully expect to outperform the market in 2020.
I continued to read the boards and learn from so many of the great investors that give so freely of their energy and knowledge. I became more comfortable investing into companies, after learning to read 10-k, earning c.c. and looking at growth rates. I also became more comfortable buying and selling stocks more quickly based on information or sometimes maybe even a “gut” feel.
One of the greatest strengths of stocks is that in the grand scheme of things, they are very liquid. Try buying into and out of a business on main street. It takes a lot of money, time and effort to actually buy, sell or start a business. Stocks allow for the entrance and exit into business ownership very quickly and easily. That is a great advantage in my book.
Learning about companies for investment has also taught me a lot about general business. A number of years ago I started my own business, then another, then a few more. I have been blessed with business success. I can truely say that one of the reason for my success is that I spent many years reading the TMF boards.
I have received an education in business and investing that can not be offered in a classroom. It is a collective wisdom from a lifetime of experiences from people that span the world in multiple eras, professions and cultures. Some may say, why put in all the work into investing the past 14 years to just mimic the average of a diversified index portfolio? They would not understand the personal growth I have acheived in my knowledge, outlook and other areas of my life that has occurred from the investing effort.
Hope everyone has a great 2020. I personally am thankful to all that contribute to this board!
As always any suggestions or questions feel free to email me.