Bear's Portfolio at the end of March

Welcome to the 2nd installment of my portfolio adventures! I’ll reiterate that this is mostly, if not entirely, for my own good rather than your edification. That said, I’ll also reiterate that I really would like to see similar posts from many of you. I think it’s super interesting even when you mention your allocations in passing, or sign a post “So-and-so, long XYZ.” I’d sure love to know the % allocation of INFN in Kevin’s portfolio.

One month in, I’ve already learned a lot about portfolio management. Simply looking at my percentage allocations (in descending order) forces me to consider if each stock truly deserves its place in the ranking. If I see that one of my highest confidence positions only commands, say, a 2-3% role in my portfolio, and/or a low confidence position is one of my largest holdings, I tend to notice those and can remedy it. Looking at my holdings this way sometimes even alerts me to how confident I actually am in each position, or at least forces me to re-evaluate. Just asking myself how comfortable I am with the size of each position seems to bear fruit.

I’ve also dived more deeply into numbers – not just earnings and sales but costs, balance sheets, shares outstanding, etc. Some things I’ve posted here. A lot of you have helped me figure things out – thank you!

Previous Month Summary

February: http://discussion.fool.com/bears-portfolio-at-the-end-of-februar…

March Performance

March got off to a furious start. I was up every business day from the 1st through the 7th, hitting my peak on 3/7 up 8.47% for the month (the S&P was up 3.6% for the month). But the rest of the month I underperformed the S&P quite a bit.

I ended the month up 6.58% vs the S&P’s 6.6%. A good month, all around. I’m still down 5.34% for the year, while the S&P is now up 0.77%.

Changes this month, and why I made them

Like many of us, the first thing I did was buy PN. I got in at under $4 on 3/1 – then it closed down further 2 days in a row. I didn’t have the fortitude to buy more until it started to go up, but I filled out a mid-sized position at $4.20. As you will see, it’s grown to a large position. Saul, I really appreciate you putting the APB out there on the valuation – I definitely would have missed it otherwise. There are still several of your smaller positions that I haven’t looked into deeply. What a great time to check this one out.

I increased my position in FIT. Twice. I recognized (by looking at my portfolio) that my conviction in this business was greater than my February position represented. I see lots of upside potential, and very little likelihood for much downside from here. I hate to “call a bottom,” but I do think there would have to be a pretty directional shift in its trajectory as a company for the stock to suffer greatly from this point. Growth has been outstanding, and Mr Market is focusing on the threats the company faces, and ignoring all its great opportunities. Fitbit gave a great 4-page summary at the end of 2015 – financials with a little extra info thrown in (like units sold per quarter). I highly recommend checking it out: https://s2.q4cdn.com/857130097/files/doc_financials/Earnings…

I also bought more LGIH and INBK. I just love these two for value and growth. Two of Saul’s biggest positions, which doesn’t hurt.

I decreased my position in SWKS at around $70. I still really like SWKS, but I’m just uncertain about the near term and there are a bunch of great places to put my money right now. Faster growing things that are cheaper. SWKS just doesn’t seem like the super-bargain SKX, LGIH, INBK, PN, and others seem to be right now. That said, SWKS has shot up another 10% since I trimmed my position.

I also decreased my position in EFOI. Unfortunately, not until I had lost a lot of “on paper” gains. Their quarterly report illustrated the (short term, at least) risks involved with a company this small. Their major customer, the Navy, is on a buying freeze, and so sales in Q1 2016 are now expected to be around half what they formerly thought. I still like the company, but they need to prove this was a blip – and to believe that, I need to see the rest of their business continue to grow at a great rate. Stay tuned.

I also decreased my position in AHGP. There’s no change in the company or news to report (that I know of) other than some institutional buying which has actually sent the price up a bit. I just wasn’t comfortable with the size of the position. It’s still large, but I trimmed about 25% of it.

SDRL – this was something I held formerly. When oil started to rebound in early March I bought a little back. Sold it the next day or something after a wild ride where the thing doubled and then started to come back down. Didn’t keep any…this is just, I dunno, full disclosure.

My Current Allocations

I decided just to show the exact percentages for all my holdings this time around. Just FYI, I really have no interest in discussing positions which are less than 2% of my portfolio. These are just speculative.

But here it is, warts and all:


INFINERA CORP		INFN	11.0%
TWITTER INC		TWTR	8.4%
FITBIT INC		FIT	8.3%
LGI HOMES INC		LGIH	7.5%
PATROIT NATIONAL	PN	7.4%
ALLIANCE HOLDINGS	AHGP	6.0%
SEASPAN CORP		SSW	5.0%
FIRST INTERNET BANK	INBK	4.8%
SOLAREDGE TECH		SEDG	4.3%
XPO LOGISTICS INC	XPO	4.2%
GREENBRIER CO		GBX	3.8%
SKYWORKS SOLUTIONS	SWKS	3.5%
CASH				3.4%
SPIRIT AIRLINES		SAVE	3.3%
SKECHERS U S A INC	SKX	3.1%
PERION NETWORK LTD	PERI	2.8%
HERITAGE INS		HRTG	2.7%
ARCOS DORADOS 		ARCO	2.6%
ENERGY FOCUS INC	EFOI	2.5%
DYCOM INDUSTRIES INC	DY	2.2%
LABU			LABU	1.2%
AEROPOSTALE INC		ARO	0.8%
INVENSENSE		INVN	0.6%
TRIANGLE PETROLEUM	TPLM	0.6%

Conclusions

Still need to trim that INFN position as it’s super big…but I haven’t yet because I still feel like the current upside potential outweighs the current downside risk. And thanks to Kevin I feel pretty in-the-know about what’s going on with the company.

I feel very high conviction about my top 5 holdings, and I like that a lot. The top 5 make up 42.6% of my portfolio, and I am very happy with that. The main work still to do is to think about which of the smaller holdings to cut loose, and which to add to.

I welcome thoughts, questions, and comments. Thanks everybody for participating on this great board! I continue to learn a lot from it, and maybe even more so, I’m inspired to go and learn because of the discussions here. I plan to continue learning and contribute increasingly!

Good luck to everyone in April.

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