April mid-month update

April mid-month update

My End of March portfolio looked like this, with 10 positions

Monday			16.7%
Cloudflare		16.6%
Enphase			16.4%
Snowflake		16.0%

Sentinel		10.8%

Global-e		 8.6%
Samsara		     7.8% 

TransMedics		 3.2%
Procore 		 3.1%

Datadog			 0.9%
Bill			 0.0%

My Middle of April portfolio looks like this, with 9 positions

Cloudflare		17.7%
Enphase			17.1%

Snowflake		14.8%
Monday			14.3%

Sentinel		11.3%
Samsara		    10.1% 
Global-e		 9.1%

Datadog			 3.3%
TheTradeDesk	 2.6%

TransMedics		 0.0%
Procore 	     0.0%

As you can see, I am no longer in Transmedics or Procore.

As it happens I sold out of TMDX at $77 to $74, and it’s now at $66, and I sold out of PROC at about an average price of $60, and it’s now at $52.50, but I can guarantee you that I had no idea, when I was selling them, that they would each fall about 12.5% in the next week or so. This just is a wonderful example of why I say over and over again that you shouldn’t follow me but make your own decisions.

Why did I sell out of TMDX? Here was my thinking:

“Revenue for the last quarter was up 225%. In 2023 we are going to see revenue grow by 50% or 60% or maybe 70%. Those ridiculous yoy quarterly comparisons to quarters when they were hardly having any revenue at all are finished. How will investors react to a drop in revenue growth from over 200% to say 60%? They also have to build up their capacity to handle lots more patients, which will be quite capital intensive and take at least six months. It will also take two to three years before they finish a study on kidney transplants, and submit it, and get approval, if they get it. I should get out.”

And why did I sell out of PCOR? Here was my thinking:

Too variable and up and down. For example Operating Income Margin for the last two years was -6% and then -10% [that was -$31 million and then -$72 million]. On the other hand, revenue growth went from 29% to 40% (accelerating), while RPO (Remaining Performance Obligation) went from up 38% to up 32% (decelerating), and FCF (Free Cash Flow) went from positive $9 million to negative $37 million, without a good explanation for the $37 million loss in the 2nd quarter of last year. I have better places for my money.”

I also partly rebuilt Datadog to where it is now big enough that I can see it.:grinning:


By the way, either or both of the two stocks I exited may do very well, and I’ll be happy for those who are still holding them, but I’ll have no regrets. I did what seemed right for me at the time and I have no claim to be right all the time. It doesn’t matter what the stocks you exit do, just the ones you hold in your portfolio. You can’t hold all the good stocks in the market. :grinning:


FWIW, its likely TMDX will have weak QoQ growth this Q and next. They told us last quarter that growth would be pretty flat until their capacity expansion comes on line - which they estimated to be some time after mid-year. So, I don’t disagree with Saul’s short term viewpoint.

I have personally not sold any shares. If fact, I bought some more around $71. “If” TMDX goes up later this year I am planning to donate 30% of my lowest cost basis shares to my Church, so I’m proactively adding now to replace those I plan to donate in the future. My timing could be off, it could keep going lower, but that is what I have done.



Thanks for making your process so transparent, Saul.
My question to you, though, is the following: didn’t you know about all this when you decided to build a position in TMDX? Going from absurdly high growth rates to much lower ones is a normal dynamics of high growth companies in their early post-IPO stages, they just cannot keep up with those early rates and I guess this is well known. I wouldn’t say the market will be surprised of that, but hey, anything could happen. Same thing for the buildup of additional capacity: they’ve been talking about this for a while and it’s in the cards. It’s an unavoidable step toward trying to get more and more of the market (and getting ready for when kidney will be part of the picture). Lastly, the kidney part: these things do take a while, but to me there’s enough of a large market to grab, as things stand today. Anyways, just being curious as to what specifically made you change your mind so abruptly.
Thank you.


Hi Silvio, good point. Yes of course I knew about all that when I started out, but I was looking for companies that were different than the SaaS companies I was holding and TMDX came along. Now I have found some others that don’t have all those problems that I enumerated (Enphase, Samsara, Global-e, for example. Granted, these guys may have some problems of their own).

And yes, these Transmedics slowdowns will be expected as they have already told us about them, but will the bot who is making decisions for the young assistant fund manager who is following 50 companies and can’t remember what all the letters stand for, have read all the conference cals and thus know they are expected, or will the bot just flash a sell signal? (I don’t know the answer to that by the way).


Saul, I noticed you bought back into The Trade Desk and it is now your smallest holding. Would you be willing to expand your on reasoning behind this? I must admit, I am a bit surprised seeing as they will likely only grow in the mid to high teens next quarter but I certainly agree with your decision (TTD is my largest holding).

No worries if you plan to share the details in your end of month write up, just curious to get your thoughts on it. Regardless, welcome back aboard the TTD train! :slight_smile:



TTD - great, consistent leadership over a long period of time and cash flow positive. IMO the biggest reason to buy now is that next year is a major election year = gonzo advertising. I added a small amount today.

Top 5 - BTC 11% / TMDX 5% / NET 2.7% / TTD 2.0% / CRWD 1.7%
Cash - 57.3%


Hi Rex (Major Fool20),
I just took a little “get to know it again” position. Why don’t you, who know a lot more about it than me, do a post on The Trade Desk, and tell us why it’s your largest holding!?


A few notable pieces of information that relate to advertising tech and The Trade Desk’s industry came out of Netflix’s earnings release and investor call yesterday.

Netflix’s new ad supported plan tier ($6.99/month) apparently already generates more revenue per user than the basic plan ($9.99/month) and even the standard/mid tier ($15.49/month) in the USA.

Per Spencer Neumann, Netflix CFO on yesterday’s call:

"yes, overall, we are pleased with our kind of per member ad plan economics. It’s higher than our basic plan overall, and as you say, in the U.S., it’s actually even higher than our standard plan.

So we really like the path we are on, the trajectory we have, and as I said, it’s kind of a win-win, because it’s a lower priced option for our members and it’s both kind of incremental revenue, incremental profit to – as a business – for the business. So it makes the business stronger, which of course, we can then reinvest into more and more great entertainment.

So we like the path, but again, it’s early. We are only a couple of quarters into this, Jessica, so we are going to get better, as Greg said, better targeting and measurement, better kind of tools and buying options for advertisers. So we think all of that will actually kind of build on this so that we will reinforce and strengthen that kind of premium CPM ad network that we are building."

This is consistent with what Hulu has said for many years, that they make more money from their ad supported, lower monthly cost plan members than the ad-free higher monthly fee members.

It is estimated that 19% of Netflix’s new signups are opting for the ad supported tier.

In their shareholder letter, they announced two new efforts to get more people to sign up for ad-supported 1) improved the ad qualtiy from 780p to 1080p and 2) now allow someone with an ad supported plan to stream from two devices at once for the same $6.99/month fee.

#2 in particular sounds like a shrewd idea since password sharing has a very different impact when it is an ad-free plan where Netflix doesn’t generate any additional revenue when a user is streaming two shows at a time vs one…but with ad supported, more streaming means more advertising revenue being generated all the time.

And to bring this back to Trade Desk…when Netflix chose to partner with Microsoft when initially launching it’s ad supported plans (rather than a traditional “walled garden” like Google), that indicated that Netflix is likely over the long term to source its ads from a broad set of companies that serve ads ala TTD. Here is an article that goes into more detail on this topic and how Trade Desk benefits from Netflix’s success and growth with advertising: