Important context for my portfolio reviews: I run a concentrated portfolio and WARNING the swings can be huge. From the 2021 high to the 2022 low, my portfolio fell more than 60%. For every $100 I had at the top I had just $40 left! Staggering. So, before trying this style, even with a small portion of your total net worth, please understand the downside – it’s much steeper than if you own an index, or a bunch of megacaps. Also, don’t follow or copy me, Saul, or anyone. We may sell a position or buy a new one at any time, so it’s impossible to follow anyway. Also, to succeed with a concentrated portfolio, you must rely on your own decisions.
February was nothing short of an incredible month. My portfolio gained 7.2%, yet was a big laggard in many ways. I had 2 positions (Axon and Remitly) up 20%+ this month, and 1 position (ELF) up 30%+. But just of companies on my radar, Celsius was up 64% this month, Supermicro was up 64% this month, Confluent was up 52%, Palantir was up 56%, Robinhood was up 52%, Carvana was up 76%, Duolingo was up 34%, Pure Storage was up 32%, Nvidia was up close to 30%, and many others were up 20%, 25%, or more. That’s an unbelievable month for a lot of stocks.
I didn’t see any of those big gains coming, except (to an extent) for Axon and ELF. And for many of the above, I don’t even understand in retrospect. If the market is being irrational, it can continue. If I’m being irrational or I’m just wrong, that can also continue. The way I see it, there still aren’t many opportunities. But I wanted to highlight the fact that I’ve missed many opportunities in February – there’s no denying that.
What I’m doing is new, for me. In addition to the T Bills I added last month, I added 2 index ETFs this month. Despite all this, because I trimmed my stock positions pretty aggressively, I still remain around 40% cash. I’d love to have less…I just need to find companies whose stocks I want to buy. It’s not for lack of trying!
I did find two this month, both companies I’ve owned before: Zscaler and Transmedics. More on those below.
A word about the positions I own:
The two no-brainers
Axon - They reported yet another fantastic quarter on Tuesday (2/27). Even with the price increase, I trimmed a bit, but I’m happy with a fairly large position, and I think the price is fair.
Monday - They reported a very solid quarter and it seems to be “all systems go” for them. The price seems fair and I’m keeping a pretty large position.
The ones I can’t get as excited about…yet
Transmedics - I have been expecting growth to fall off a cliff, and it keeps not happening. We’ve watched them go from a tiny tiny tiny revenue base of $30m in 2021 to over $240m in 2023. That is astounding. And they guided to $370m for 2024. I just have to be involved although there are many risks. Great thread here: TMDX Q4 FY23 Earnings
Google - Just a rock solid place to park some money. Would add if it goes down and trim if it goes up. (Trimmed some this month when it was up.)
Remitly - They reported a solid quarter and it shot up, but as they are still cash flow negative, I took some off the table after this bounce. Just want to be cautious in case the business model just turns out to not be so great.
Samsara - Priciest stock I own, so I trim every time it’s up, as it was double digits this month. They report next week. I expect it to be strong, but I’m fine with a small position at this price. Still, I can’t find fault with the numbers so far. Important for me to remember that.
Zscaler - Added this one back after it dropped 15% on the Palo Alto report. They ran right back up and I trimmed it. They reported today and it looks like they’re falling again. Perhaps I’ll re-add. From what I can tell so far, this quarter was a beat and raise, but less of a beat than usual. To be expected. They’re slowing down over time…law of large numbers. But the quarter seems quite good to me.
Amazon - See Google (above). Trimmed since it was up.
Klaviyo - Last month I said, “They’re similar to Braze which hasn’t impressed me…but Klaviyo’s numbers are better.” Well, they were better. They came in with 39% growth in Q4 (reported Tuesday 2/27) which is good of course, but has slowed sooooo rapidly. They guided to 28.5% growth next year. Should beat, and low 30’s is fine. But not exciting. They also had an ever so slight miss on Op Income. Just be better, please. I trimmed.
ELF - Ok, this is a company I love, but everyone has their limit, and I guess $200/share is mine. I thought ELF was a huge opportunity at $93 as of October, and even $118 at the end of December. I still loved them at $144 at the end of December. At $160 on Jan 31, it was still my 2nd largest position. But now at $209, I’ve cut it to under 1%. Stocks don’t go up every month forever. I may miss out as it hits $220 and $230 in March or April, but that’s ok. I think the low hanging fruit has been picked. If instead it comes back down to earth, I’ll add back. I think the quarter they reported on 2/6 was solid, but not spectacular. The growth was great, but the acquisition muddies the picture a bit. When they report Q4, 9 or 10 weeks from now, they’ll have to guide for the new fiscal year. With the price up, there’s some risk there.
Wrapping up:
I know I have harped on my idea that I’m not seeing many great opportunities. And now my short list of Axon, Monday, and ELF is down to just Axon and Monday. It’s not so much that I am shocked that other things are doing well. It’s that I find it incredibly difficult to pick the winners right now. Like ELF this month, some of the best stuff has run too far for me. Too rich for my blood!
Part of the reason for wanting things “at a bargain” or a “no brainer” price is that with a higher price comes more risk. Even Saul said something similar, a long time ago: Looking into the future of a stock
Good luck to us all in March!
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): Bear's Portfolio at the end of 2016 - Saul’s Investing Discussions - Motley Fool Community
Dec 2017 (contains links to all 2017 monthly posts): Bear's Portfolio through Dec 2017 - Saul’s Investing Discussions - Motley Fool Community
Dec 2018 (contains links to all 2018 monthly posts): Bear's Portfolio through Dec 2018 - Saul’s Investing Discussions - Motley Fool Community
Dec 2019 (contains links to all 2019 monthly posts): Bear's Portfolio through Dec 2019 - Saul’s Investing Discussions - Motley Fool Community
Dec 2020 (contains links to all 2020 monthly posts): Bear's Portfolio through Dec 2020 - Saul’s Investing Discussions - Motley Fool Community
Dec 2021 (contains links to all 2021 monthly posts): Bear's Portfolio through 12/2021 - Saul’s Investing Discussions - Motley Fool Community
Dec 2022 (contains links to all 2022 monthly posts): Bear's Portfolio through 12/2022
Dec 2023 (contains links to all 2023 monthly posts): Bear's Portfolio through 12/2023
Jan 2024: Bear's Portfolio through 01/2024