Previous Month Summaries
Dec 2016 (contains links to all 2016 monthly posts): http://discussion.fool.com/bear39s-portfolio-at-the-end-of-2016-…
This Month My Portfolio 10.45% S&P 1.79% Nasdaq 4.30% Russell 2000 0.28% YTD My Portfolio 10.45% S&P 1.79% Nasdaq 4.30% Russell 2000 0.28%
Well, what can I say, January was a good month. But then, I had some catching up to do after last year! …still do.
SHOP had a lot to do with the month being so good, of course, as I entered 2017 with SHOP commanding more than 1/4 of my portfolio. Obviously I wanted to remedy that a bit, but it was nice to get a bump before I did. And it’s still my #1 position by a long shot.
However, it wasn’t just SHOP. All 14 of my positions are trading higher than they were one month ago, and 10 them were up at least 7% in January. A few years of months like that and I can retire.
Changes this month, and why I made them
HDP - I couldn’t resist after Saul explained the need to look at “revenue plus the net change in deferred revenues” here: http://discussion.fool.com/hi-bear-they-have-an-enormous-amount-… and the article by Bert he links to.
Trims, Adds, and Holds:
Added to Splunk. We’ve discussed: http://discussion.fool.com/splunk-32565994.aspx?sort=whole#32565… Andy had a good point about share based comp that I’m still considering.
Added to FB. In response to Matt’s bullish case, here’s what I wrote: http://discussion.fool.com/matt-you-are-awesome-value-that-that3…
Added to AMZN. This is quite simply a very high confidence company for me in the long term. I move my position size around more than most, selling some when it goes up and buying more when it dips, because I feel like it goes in fits and starts, and other (smaller) companies often have more catalysts for appreciation. But I would rank Amazon among my favorites in the long term. At a ~9% position, it’s not so big that I wouldn’t buy more if there were a major dip.
Trimmed some SHOP, PAYC, and HUBS. I was extremely heavy in SHOP and needed to trim. With PAYC and HUBS, I just wanted to have a little less exposure, because although I love the recurring revenue, I don’t understand the businesses (at least the secret sauce) with these quite as much. I’m trying to base position size not just on the stellar results a company has had, but on what I see as their opportunity and strengths vs competition, and how well I understand all that.
I’m holding a little cash (5% or so). Always seems like something will present itself as a buy during earnings.
One other little note: I’ve tried to trim in a timely manner, as I do hold stocks that tend to get expensive from time to time. I’ve also shifted into less expensive things (depending on how you calculate “expensive”…maybe what I really mean is “less volatile”) and may switch back if the extremely pricey stuff dips…I guess that’s called re-balancing your portfolio. Sort of.
I’m watching the companies Saul owns that I don’t. Presently there are four, besides KITE, which Saul says doesn’t really count.
With ANET I just can’t get excited about the product…even after the drop I just don’t feel comfortable. I’ll see what happens after earnings.
With TWLO I just don’t understand it – I’m getting closer, and the fact that AMZN and FB use it carries a lot of weight with me, but I’m just not comfortable yet.
I’ve said plenty about UBNT, but basically I worry they’ll run into the same buzzsaw INFN ran into…maybe that just shows that I don’t understand the company. Either way, it’s not something I should own.
Lastly, I really just don’t like banks (despite my very small BOFI holding), plus SBNY just doesn’t seem like a great value to me at this level.
Here are a few others I’m watching, but haven’t pulled the trigger. Mostly just hoping for a cheaper price, except with DY…I’m just not sure what to make of it.
My Current Allocations
NOTE: The “Change” column lists the % change in share price during January.
Ticker Curr Change SHOP 16.5% 18.5% AMZN 8.9% 9.8% LGIH 8.4% 8.1% YELP 7.9% 9.6% PAYC 7.5% 1.6% SPLK 7.7% 13.1% FB 7.0% 13.3% XPO 6.0% 3.7% SQ 6.3% 7.3% HUBS 5.5% 9.1% HDP 5.2% SSW 2.6% 5.0% BOFI 2.4% 3.3% TWTR 2.1% 8.1% PERI 1.0% 31.0% cash 4.8%
Random Thoughts and Conclusions
This was a month where stock picking seemed to work for me. One thing I really liked was that even on days when it was down, my portfolio was only down about as much, or sometimes less than, the small cap indices. This was a goal of mine for this year. Someone mentioned that my portfolio was very volatile (ie, this goal was unlikely), but I was basing this goal on the fact that Saul has often been up when the market as a whole is down…many times for the whole year!
The recent thread about correlations between Saul’s portfolio and the FDN was fairly aggravating. No one seemed to mention 2001-2003 where Saul quadrupled his money in just 3 years while the market LOST 12%. You really can’t just pick his worst 10 year stretch of his investing career and conclude that stock picking must not work!
Anyway, I still believe in this venture, and I’m excited to see what else we can do in 2017.
My best to all,