Bear's Portfolio through 01/2022

PaulWBryant · February 1, 2022, 11:28am

Disclaimer: I post my portfolio to share ideas and track my results. Please do not try to copy anything I do – it may not be right for your style, but even more than that: you have to understand for yourself why you hold the companies you hold. Please don’t email me portfolio management questions. I have absolutely no idea what you should do, because only you can know how best to run your portfolio – and if you’re like me, it will take months of following along on this board to figure out what works for you. Here are a few questions I get frequently enough that I’d like to head them off at the pass.

Q: Does your return percentage include the cash you hold?
A: YES, the 0% return from cash held is included in the overall return and obviously drags it down. But options trading (off topic for this board!) and other trims and adds can also affect return – and I won’t be able to share my real time moves, because I make little changes all the time.

Q: Are stocks overvalued? Is that why you hold so much cash?
A: I never know when anything is overvalued. I just do what works for me.

Q: Should I hold cash to be able to buy on pullbacks?
A: Probably not if you have new money coming into your portfolio regularly (like from a paycheck), right? But when you’re retired you just have to figure out what works for you. The closest thing to advice I’ll say is this: You will never time it perfectly anyway, so just use your judgement and do what helps you sleep at night.


**Port Return**
Jan -21.2% (**in other words, I’m down to 78.8% of what I started with on Jan 1**)

Here’s what I did in January:
For the first month in a long time, I neither bought any new positions, nor sold out of any. What I did was add and trim constantly – sometimes tiny amounts, sometimes large chunks. Some days I had 4% cash and some days 10% or more. Some days I had my top positions over 20% and some days I spread it out more. Importantly, nothing I did was perfect in execution or in plan. It’s not necessarily imitable. I make a lot of mistakes and can’t always explain my decisions. I’m human. And more than that, while I think I have a good process, I hope it continues to get better!

Obviously I’m still holding 8 companies, plus cash.


**Allocations**
Ticker	Curr%	Dec	Mo/YTD Ch
MNDY	18.8%	20.7%	-32.2%
S	15.8%	9.3%	-11.4%
DDOG	15.8%	20.4%	-18.0%
BILL	13.9%	12.6%	-24.5%
AMPL	12.1%	12.0%	-25.7%
ZS	6.8%	11.7%	-20.0%
NET	2.4%	1.1%	-26.7%
UPST	1.9%	2.1%	-28.0%
cash	12.3%	10.2%

MY COMPANIES

Monday.com (MNDY)
08/31/2021: $379.36 (Market Cap Approx: $17b, TTM Revenue: $223m)
09/30/2021: $326.20 (Market Cap Approx: $14b, TTM Revenue: $223m)
10/29/2021: $371.83 (Market Cap Approx: $16b, TTM Revenue: $223m)
11/30/2021: $359.80 (Market Cap Approx: $16b, TTM Revenue: $263m)
12/31/2021: $308.72 (Market Cap Approx: $14b, TTM Revenue: $263m)
01/31/2022: $209.32 (Market Cap Approx: $9.3b, TTM Revenue: $263m)

Monday shares were down 32% in January – the most of any company I own. The reason it’s still number one for me is that I barely touched it. When I went to add to something (like SentinelOne), I sure didn’t sell any Monday to raise the funds! It’s really hard to do anything but hold on when it’s down so far. I still feel great about the numbers they’ve put out, and will be watching eagerly when they report again…I’m hoping in a couple weeks (though I don’t think they’ve announced the date yet).

SentinelOne (S)
12/31/2021: $50.49 (Market Cap Approx: $13b, TTM Revenue: $169m)
01/31/2022: $44.14 (Market Cap Approx: $12b, TTM Revenue: $169m)

Well, that was unexpected. I added so much to SentinelOne this month, especially when it was around $40 and below, that it actually passed Datadog yesterday (though they’re basically tied) as it was climbing back up. It didn’t fall very low for long, and when January ended yesterday, SentinelOne was only down 11.4% from the end of December. It fell the least of any company I own in January.

The way I see it, I feel all 7 of my positions other than Upstart could be roughly equal if the price was right, so I’ve been sizing partially based on price – though conviction always drives allocation first. It’s just that the conviction being similar, I’m open to jockeying the allocations a bit.

Anyway, all recent news from SentinelOne has been good. I’ll say little here as I’m sure no techie, but it seems to this layman that they’re becoming an important part of the multi-pronged approach a lot of companies seem to be taking with cybersecurity.

Datadog (DDOG)
02/26/2021: $95.41 (Market Cap Approx: $33b, TTM Revenue: $604m)
03/31/2021: $83.34 (Market Cap Approx: $29b, TTM Revenue: $604m)
04/30/2021: $85.77 (Market Cap Approx: $30b, TTM Revenue: $604m)
05/28/2021: $91.05 (Market Cap Approx: $31b, TTM Revenue: $671m)
06/30/2021: $104.08 (Market Cap Approx: $36b, TTM Revenue: $671m)
07/30/2021: $110.70 (Market Cap Approx: $38b, TTM Revenue: $671m)
08/31/2021: $137.80 (Market Cap Approx: $47b, TTM Revenue: $765m)
09/30/2021: $141.35 (Market Cap Approx: $49b, TTM Revenue: $765m)
10/29/2021: $167.05 (Market Cap Approx: $58b, TTM Revenue: $765m)
11/30/2021: $178.29 (Market Cap Approx: $62b, TTM Revenue: $880m)
12/31/2021: $178.11 (Market Cap Approx: $62b, TTM Revenue: $880m)
01/31/2022: $146.11 (Market Cap Approx: $51b, TTM Revenue: $880m)

It’s amazing that Datadog fell more between December 31 and Jan 31 than SentinelOne, but it also hadn’t fallen as much in 2021. And it “only” fell 18% – less than any other position I own besides SentinelOne. I think we all feel that everything is right on track with this company, and when they report Q4 next week it will be another great quarter. If they crush it as hard as they did in Q3 I’ll be amazed. But Datadog seems to amaze me all the time.

Bill.com (BILL)
11/30/2021: $280.85 (Market Cap Approx: $29b, TTM Revenue: $308m)
12/31/2021: $249.15 (Market Cap Approx: $26b, TTM Revenue: $308m)
01/31/2022: $188.21 (Market Cap Approx: $19b, TTM Revenue: $308m)

Bill fell 25% in January, and more than that for much of the time, which just got to crazy levels, in my opinion. I added a lot. They report in 2 days, and I am eager to see what they do – should be eye-popping with all the growth (organic and otherwise) they’re seeing. But don’t take it from me. Read this awesome thread: https://discussion.fool.com/billcom-q23922-priors-35039956.aspx

Amplitude (AMPL)
09/30/2021: $54.34 (Market Cap Approx: $7.0b, TTM Revenue: $129m)
10/29/2021: $74.29 (Market Cap Approx: $9.6b, TTM Revenue: $129m)
11/30/2021: $65.00 (Market Cap Approx: $8.4b, TTM Revenue: $148m)
12/31/2021: $52.94 (Market Cap Approx: $6.9b, TTM Revenue: $148m)
01/31/2022: $39.31 (Market Cap Approx: $5.1b, TTM Revenue: $148m)

Amplitude had fallen more than most of my companies in Nov and Dec, so when it fell another 26% in January…ouch. I have added some, but I admit not as much as I would if some of my other companies fell this far. I’m at 12% which is a large position, but I don’t want to let it out-grow my conviction. (This is a slight caveat to the “similar conviction” comment I made above in the SentinelOne section.) We’ll learn a ton when they report on 2/16. Who knows, I may be adding after that even if I have to pay more per share.

ZScaler (ZS)
05/28/2021: $194.20 (Market Cap Approx: $28b, TTM Revenue: $536m)
06/30/2021: $216.06 (Market Cap Approx: $32b, TTM Revenue: $602m)
07/30/2021: $235.91 (Market Cap Approx: $34b, TTM Revenue: $602m)
08/31/2021: $278.34 (Market Cap Approx: $41b, TTM Revenue: $602m)
09/30/2021: $262.22 (Market Cap Approx: $39b, TTM Revenue: $673m)
10/29/2021: $318.86 (Market Cap Approx: $47b, TTM Revenue: $673m)
11/30/2021: $346.97 (Market Cap Approx: $52b, TTM Revenue: $761m)
12/31/2021: $321.33 (Market Cap Approx: $49b, TTM Revenue: $761m)
01/31/2022: $257.11 (Market Cap Approx: $39b, TTM Revenue: $761m)

I haven’t forgotten ZScaler’s blowout last quarter – 17% sequential growth! But I traded the heck out of this one in January. I sold the whole thing early on at $260-270, and then used a lot of that money to buy other stuff low. And eventually I creeped back into Zscaler. I’d like to have a larger position, but I’ve been more focused on others. Probably time to add more.

Cloudflare (NET) Well, well, well, lookie what I found. Cloudflare is down as much as almost anything – much more than most SaaS companies, but I don’t think anything has really changed with the company. It just got overvalued for whatever reason. But I’ve started to add back a bit. I doubt it will ever be a large position for me, but at these levels, I’ve enjoyed adding a bit back. We’ll see where it goes from here.

Upstart (UPST) Just a 2% position as I still like what they’re doing, but it’s just hard to know what growth will look like.

CLOSING THOUGHTS

Lately I’ve tried to home in on relentlessly pursuing the best companies. In the past, I made a great percentage return on Shopify and Square and Paycom and others, but I had too many stocks back then. So I’ve also learned to concentrate on the best companies, and allocate to them heavily. To do this I have to say no to good companies that in my opinion are simply not the best companies.

I think it’s also important to see that we can be wrong about stuff ALL THE TIME, and we can also weather storms the market throws at us like the last few months, and we can still do incredibly well. Let’s see what we can do in 2022!!!

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