DISCLAIMER: I was down more than 40% YTD at one point this year. My portfolio was worth less than half of its all time high. I don’t suggest investing like I do. I suggest figuring out what works for you.
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 I was when I was first running a concentrated portfolio, it will take months of rapt learning (including following along on this board) – and plenty of trial and error – to figure out what works for you. Here are a few answers to some questions I get frequently:
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 (sometimes positively, sometimes negatively) – 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 judgment and do what helps you sleep at night.
**Port Return**
Jan -21.2% YTD
Feb -23.8% YTD
Mar -26.0% YTD
Here’s what I did in March:
In March my portfolio was hit hard again, for the 4th month in a row. On March 14, I was down 40.6% YTD. I had just over 59% of what I had on January 1st. That was uncomfortable. The portfolio has bounced back considerably, and I took that opportunity to raise some cash, do some trading, and consider my portfolio construction.
I’m fairly surprised to have a 26% cash position now. It was 16% a month ago. Just a couple weeks ago it was closer to 5%. But it’s mainly due to trimming positions that were too large.
I also did lots of trading. At one point I got up to 25%+ DDOG (when it got below $115/share), and then I trimmed a lot of it. I added to and trimmed other positions opportunistically as well. That’s something you can do when you have a large cash allocation. It has worked out well and makes me less inclined to be 100% invested. But that’s just me.
On the portfolio construction side, I trimmed SentinelOne and Amplitude quite a bit. More on those trims below.
I still hold 6 companies, plus cash.
**Current Holdings**
Ticker Curr% Feb Mo Ch YTD Ch
ZS 19.4% 18.1% 0.9% -24.9%
BILL 19.1% 18.9% -4.7% -9.0%
DDOG 18.0% 15.5% -6.0% -15.0%
MNDY 13.9% 12.5% -0.5% -48.8%
S 2.2% 12.0% -6.7% -23.3%
AMPL 1.4% 7.1% -14.0% -65.2%
cash 25.9% 15.9%
**Sold in 2022**
UPST 0.0% 0.0% -31.0% -27.9%
NET 0.0% 0.0% 3.0% -8.8%
MY COMPANIES
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)
02/28/2022: $239.15 (Market Cap Approx. $36b, TTM Revenue: $860m)
03/31/2022: $241.28 (Market Cap Approx. $36b, TTM Revenue: $860m)
Every position in my portfolio has a lower share price than it did a month ago – except Zscaler. But it was basically flat, and it’s still very reasonably priced! Back in August Zscaler’s TTM revenue was only $602m and it was a $41b company. Now with $860m revenue in the last 12 months, you can buy it for the low low price of $36b!
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)
02/28/2022: $237.88 (Market Cap Approx. 25b, TTM Revenue: $411m) Look how much that revenue jumped!
03/31/2022: $226.79 (Market Cap Approx. 23b, TTM Revenue: $411m)
Bill’s blowout quarter rocketed the shares up in February, but they have since drifted down (like most everything). But even after falling 5% in March, they’re still holding up better YTD (“only” down 9%) than any other company I own. I’m not quite as comfortable with BILL as I am with DDOG or ZS, so I probably won’t let it get much larger yet, but my confidence will go even higher if next quarter is anything like the last!
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)
02/28/2022: $161.11 (Market Cap Approx: $56b, TTM Revenue: $1,029m)
03/31/2022: $151.47 (Market Cap Approx: $53b, TTM Revenue: $1,029m)
After the blowout quarter Datadog reported on Feb 10, it actually soared to more than $180/share briefly. Amazingly it got all the way down to $114 in March. I’ve been trading it like crazy and letting my position fluctuate between 15% and 25% depending on where the price is. Right now it’s not my top allocation, but it’s close, and it’s definitely still my top conviction company. Happy to add and trim opportunistically, or just let a very large position run.
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)
02/28/2022: $158.87 (Market Cap Approx: $7.1b, TTM Revenue: $308m)
03/31/2022: $158.07 (Market Cap Approx: $7.1b, TTM Revenue: $308m)
Monday is down 65% from its all time high – far more than my top 3 companies (down 36%, 35%, and 24% respectively). So why am I not making it my top position? The price is certainly right! Well…in my opinion, the jury is still out on how durable Monday’s growth will be. Still, if growth is even close to what I’m hoping, Monday seems like a real bargain. I’m comfortable with a large position, but not 15%+.
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)
02/28/2022: $41.50 (Market Cap Approx: $11b, TTM Revenue: $169m)
03/31/2022: $38.74 (Market Cap Approx: $10b, TTM Revenue: $205m)
SentinelOne turned in a really good quarter in March, but I had trimmed before the report and I didn’t add back. Part of that was nerves. I was holding on to cash. But also, as I said last month, “I realized I was letting my enthusiasm get ahead of my conviction.” I have actually trimmed a bit more since they reported and the shares bounced back. Smaller market cap companies may not have to worry about the law of large numbers, so growth should be super fast – but that doesn’t mean growth will be durable. SentinelOne is growing like a weed and maybe taking share from Crowdstrike, but that does NOT necessarily mean it is going to catch them. Of course there is a large market, but who knows? Maybe Crowdstrike has already conquered most of it.
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)
02/28/2022: $21.44 (Market Cap Approx: $2.4b, TTM Revenue: $167m)
03/31/2022: $18.43 (Market Cap Approx: $2.1b, TTM Revenue: $167m)
I made a mistake with Amplitude – my position was too large. They proved with one quarter that they are not a 70%+ grower like we hoped, and it got hammered. I trimmed it in March, but why haven’t I sold? I admit that I feel Amplitude is “too cheap.” I admit that I’m also hoping next quarter will be a bounce back that shows the business is growing well, if not quite as fast as we thought. Still, I don’t really recommend this risky play. And it will remain a small position for me.
CLOSING THOUGHTS
I believe we are at our best as investors when we are relentlessly pursuing the best companies, and more and more – to me – that means SaaS businesses with durable growth. The trick is figuring out which companies have growth that will be very durable. Because I’m a limited human, I believe I even have to say no to many great companies that I just can’t wrap my head around in order to make sure I also say no to the not so great ones – the pretenders; the non-durable flashes in the pan.
I’m happy with few large positions. I am learning not to let positions get too large just too fast-- conviction in a company has to be built over time, no matter how fast its revenue is growing.
Even with all my mistakes and changing my mind a lot, and even with the storms the market throws at us (like the last several months), my portfolio’s growth over the last several years has amazed me. There are scary times, though, and you should figure out what works for you!
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…
Dec 2021 (contains links to all 2020 monthly posts): https://discussion.fool.com/bear39s-portfolio-through-122021-350…
Jan 2022: https://discussion.fool.com/bear39s-portfolio-through-012022-350…
Feb 2022: https://discussion.fool.com/bear39s-portfolio-through-022022-350…