My 2021 Portfolio Performance YTD as of
Jan +7.3%
Positions (You can click on the link at the bottom of this post to last month if you want to see what has changed.)
Ticker Curr% YTD Ch
NET 15.2% 0.9%
CRWD 14.5% 1.9%
DOCU 11.3% 4.8%
ZM 7.2% 10.3%
ASAN 4.4% 19.7%
BAND 4.0% 15.9%
ETSY 3.7% 11.9%
ZS 3.0% 0.0%
TWOU 2.5% 2.2%
TLND 1.6% 14.1%
cash 32.6%
Cash position Holding cash is tricky. I may be leaving money on the table, but I’m fine with that. You know I will take a swing at the big opportunities when they come along. When I don’t see great opportunities, I usually diversify somewhat (I hold more like 10 positions instead of just 5 or 6), and hold some cash. But who knows, a week from now, I might see a great opportunity to deploy more cash.
Cloudflare (NET) 15.2%, up from 14.1% last month
10/31/2020: $51.97
12/4/2020: $77.35
12/31/2020: $75.99 Market Cap Approx: $23b
01/29/2021: $76.66 Market Cap Approx: $23b
I’ve continued to add to Cloudflare through January even as it moved into the #1 spot. There’s so much to like about this company. They’re innovating as fast (maybe faster) than anyone else, and it seems their opportunity is massive and optionality is nearly infinite. I also love that they’re “only” a $23 billion company. That is by no means a small cap, but it’s about half of where CRWD and DOCU are at, and much smaller than SNOW or ZM.
Crowdstrike (CRWD) 14.5%, down from 15.3%
10/31/2020: $123.84
12/4/2020: $167.26
12/31/2020: $211.82 Market Cap Approx: $50b
01/29/2021: $215.80 Market Cap Approx: $51b
I have also added to CRWD in January. It shrank a little as a percentage of my portfolio, though, because the share prices of some others I own have increased a lot more this month. I still feel a very high confidence in CRWD and like NET, I believe they’re in the right place at the right time. Their $51 billion market cap makes them an already large company, but we’ll see if they can continue to hyper-grow, and become an even larger company. I think they have as good a chance as any.
Docusign (DOCU) 11.3%, down from 13.1%
10/31/2020: $202.25
12/4/2020: $243.22
12/31/2020: $222.30 Market Cap Approx: $47b
01/29/2021: $232.89 Market Cap Approx: $49b
I (opportunistically) trimmed a small amount of DOCU at $255, but I might consider adding back to the position. Revenue growth is accelerating, they’re adding a ton more customers, and everything seems great. I guess the high market cap might turn some people off, but DOCU has a large revenue base already and it’s extremely impressive that they are growing it at an accelerating pace. I think the market sees DOCU as a covid story, which may hold them back a bit. We’ll see if the numbers they put up will change some minds.
Zoom (ZM) 7.2%, down from 9.2%
10/31/2020: $460.91
12/4/2020: $410.01
12/31/2020: $337.32 Market Cap Approx: $103b
01/29/2021: $372.07 Market Cap Approx: $114b
I trimmed ZM, and I kind of regret doing so. But I’m conflicted, because their $114b market cap makes them an already very, very large company. I think the potential is there for them to continue growing rapidly for the next couple years, but it is not a slam dunk. My hope rests mostly on the fact that they are still working to monetize the users they added this year, so we haven’t seen a peak yet. More on that here with thanks to AThinkingFool: https://discussion.fool.com/tom-your-post-from-last-night-specif…
Asana (ASAN) 4.4%, up from 4.3%
12/31/2020: $29.55 Market Cap Approx: $4.7b
01/29/2021: $35.37 Market Cap Approx: $5.6b
I trimmed maybe 10% of my ASAN shares in January as it reached highs near (maybe over $40). I might add some back soon, but haven’t yet. Even though it pulled back, the stock is my fastest grower in January. You’ll also notice that this is the smallest company (by market cap) so far, by a factor of 4. The last month or two, I’ve been furiously seeking new companies, and Asana is one of the few to interest me so far. The multiple is a fraction of CRWD’s or NET’s, and growth rate is near 60% (albeit off a small revenue base). We’ll see if they can continue rapidly growing into a larger company!
Bandwidth (BAND) 4.0%, up from 3.6%
12/31/2020: $153.67 Market Cap Approx: $4.2b
01/29/2021: $178.13 Market Cap Approx: $4.9b
I just left my BAND position alone in January, neither buying or selling any shares. I think the market might have caught on a bit, but this one still has a very long way to grow if they do what I believe they can. I started looking into BAND after this post: https://discussion.fool.com/band-q4-guidance-55-is-it-interestin…
It is important to note that the 55% guidance includes an acquisition, but still, this one is interesting. Maybe not quite like buying TWLO two years ago…but maybe something like that.
Etsy (ETSY) 3.7%, down from 5.8%
10/31/2020: $121.59
12/4/2020: $155.03
12/31/2020: $177.91 Market Cap Approx: $24b
01/29/2021: $199.09 Market Cap Approx: $27b
I trimmed Etsy a lot when Elon Musk tweeted “I kinda love Etsy” this week and the shares went up to $225+. I’ve bought some of that back, but I’m not in a rush. Etsy has caught on with the market the last few months, as you can see from the price history above. So why have I trimmed instead of adding? Growth the last several quarters was fantastic, but they clearly benefited from the pandemic, and so I just have no idea where their growth rate will settle. The upside makes me want to keep a position, but not a large one.
Zscaler (ZS) 3.0% (new)
01/29/2021: $199.70 Market Cap Approx: $29b
Zscaler had severe sales issues through the quarter ending January 2020, in which billings only grew 18% YoY! But the April quarter billings bounced back to 55% growth, and in the July quarter they matched that. Then in the October quarter billings growth accelerated to 64%. Zscaler is not a forgotten stock; the market realized all this before I did. But I think they might have some more upside surprises yet to come. At the very least, the next comp or two will be pretty easy. More excellent thoughts via StockNovice here: https://discussion.fool.com/stocknovice39s-january-portfolio-rev…
2U (TWOU) 2.5% (new)
01/29/2021: $40.90 Market Cap Approx: $2.8b
2U is cool because the ticker is longer than the company name. It’s also cool because they are trying to bring universities into the digital age. And they have a SaaS model and revenue grew 31% organically last quarter. So surely they’ve got a PS ratio of 30 or 40, right? Nope. It’s 4. There are a lot of reasons why. They’ve had some tough quarters recently and their Alternative Credential Segment (which is 40% of total revenue and growing 57% YoY) is kind of saving their bacon. Their other 60% of revenue comes from Graduate Programs, and while it was still up 18% YoY, grad school attendance is actually down (I think I have that right). All the more reason for a digital option, in my opinion. Anyway, I’ll be following 2U now, at least for the next quarter.
Talend (TLND) 1.6%, down from 3.0%
12/31/2020: $38.34 Market Cap Approx: $1.2b
01/29/2021: $43.74 Market Cap Approx: $1.4b
I trimmed my TLND this week to lock in some gains. I may add back to it opportunistically, but I doubt this will become a high confidence position. This company is only growing revenue at 20% or so (which means it’s off topic for this board, for now). Like 2U, it’s incredibly inexpensive (PS ~5), but this is a bit of a lottery ticket (and so far not even growing as fast as 2U). I’m hoping they’ll start growing enough to be relevant, but for now it’s just a hope.
Stocks I’ve sold
I went ahead and parted ways with SKLZ. They were up 30%+ when I cut the last shares loose, and their 38% run up in January seems silly to me, as it is anyone’s guess how their plan will actually play out. The market cap is around $10 billion now, and meanwhile I just don’t have any level of confidence that they’ll spawn games and competitions any more complex than their current bingo/solitaire type inventory, where players can win or lose money based on…skill??? Yawn.
Closing Thoughts
What an interesting week to wrap up January. GameStop and other deep value companies came roaring to the fore, based in part on a Reddit movement designed to stick it to hedge funds who got greedy and cavalier with their short positions. It has been must see TV to me, and I can’t turn away.
The most interesting part is how irresponsibly shorted GameStop had been. Naked Shorting is not 100% legal, but is allowed (I think) in some circumstances, as shown by the fact that more GameStop shares were held short than the total outstanding share count. Very shady, and in this case it seems like the shorts will pay the price. They were kind of asking for it. I also had to piece this together, so I could be wrong, but I feel like the Naked Shorting story is mostly under-reported because almost no one understands this stuff.
The hedgies have had to sell good companies to cover bad bets, but it’s amazing (though unsurprising) how quickly others have swooped in to scoop up their abandoned shares of good companies. Rinse, repeat. And remember, even a massive fund with $50 billion or more under management pales in comparison to the $33 trillion (I haven’t confirmed that number but I think that’s what I heard on CNBC this week) that is the total money in the stock market. So in the grand scheme it won’t matter if some of these clowns go belly up. They’ll only provide opportunities for us.
Bear
“Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.” - Attributed to Albert Einstein
Previous Month Summaries
Dec 2016 (contains links to all 2016 monthly posts): http://discussion.fool.com/bear39s-portfolio-at-the-end-of-2016-…
Dec 2017 (contains links to all 2017 monthly posts): http://discussion.fool.com/bear39s-portfolio-through-dec-2017-32…
Dec 2018 (contains links to all 2018 monthly posts): https://discussion.fool.com/bear39s-portfolio-through-dec-2018-3…
Dec 2019 (contains links to all 2019 monthly posts): https://discussion.fool.com/bear39s-portfolio-through-dec-2019-3…
Dec 2020 (contains links to all 2020 monthly posts): https://discussion.fool.com/bear39s-portfolio-through-dec-2020-3…