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.
May was a bit out of nowhere. Suddenly, the birds were singing, the sun shone, the sky was blue. And the market was buying SaaS stocks again.
I sold out of 4 small to tiny positions: Global-e, Snowflake, Cloudflare, and Confluent. They’re all fine companies, but I don’t think they’ll do as well as the ones I hold.
I added new positions in Aehr Test Systems, Transmedics, and Digital Ocean. More on those below.
BILL - BILL turned in a fantastic earnings report on May 4th. They raised their full year EPS guide from 1.05 to 1.48! They’re really starting to print money. Still, I of course reduced my too-large position since it was up almost 35% this month.
Zscaler - Last month I said I was bewildered at Zscaler’s fall. Well I guess the market decided it felt the same – it was up over 50% in May. They pre-announced a good quarter which they will make official tomorrow, but this one, like BILL, is really starting to print money.
Samsara - Samsara was one of the few things that didn’t soar this month. It was up and down a bit but only gained single digits. However, they report earnings tomorrow! I added a little this month.
Crowdstrike - I just got back into Crowdstrike in April, but I had to greatly reduce it this month as it was up 33% on no news. (They reported this afternoon, and by the initial reaction, I’m glad I reduced…but who knows, maybe this is another opportunity to add back to it.)
Enphase - I decided to more than double my Enphase position this month. Part of this is that I don’t want to have so much cash…but part of it is, the more I learn about this company, the more I am impressed. Still, they sell widgets, and that makes growth more complicated. Hasn’t stopped them yet, but I want to be at least a little bit cautious.
Aehr Test Systems - This is one I learned about from @stocknovice and @SaulR80683. I think it’s got a lot of potential, but it’s another that might not scale seamlessly. Their fiscal year ended today, May 31. The guide they give for next year will be telling…lots of upside, but I’m proceeding with caution because I don’t know the company well at all yet.
Datadog - Datadog reported on May 4th, just like BILL, and the report wasn’t quite as strong. They were able to raise their guide, but only a tiny amount. I just see their company results likely going sideways for a while. Luckily, the stock was up 40% this month! I took the opportunity to slash my position down to a stub.
Transmedics - Here’s another one I’ve been learning about thanks to @AnalogKid70 and @stocknovice. The company is growing like a weed…but I just don’t know how long they’ll be able to do so. Hard to develop a high conviction here, which is everything for me. Still, worth following!
Digital Ocean - Digital Ocean Q1 2023 Results - #4 by PaulWBryant
cash - Yes, it’s my largest position, but not by design. I put whatever allocation I’m comfortable with into the companies I believe in…and typically some cash is left over. Right now, it’s a lot. That will change soon, if history repeats itself.
I usually close with a note about a core belief I have: that the goal is to pick the best companies. But what does that mean? How do we know which companies are best? It’s not one thing in isolation, your favorite “metric” like growth rate or customer additions. But it’s also not just the company you could see changing the world – we’re bad predictors and we do (and should) often change our minds. This may sound a little woo woo, but to me it’s about balance: a harmony between the numbers and the narrative, and even…the short term and the long term. More on that later. For now, have a great June!
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
Jan 2023: Bear's Portfolio through 01/2023
Feb 2023: Bear's Portfolio through 02/2023
mid-Mar 2023: Bear's Mid-March Update
Mar 2023: Bear's Portfolio through 03/2023
Apr 2023: Bear's Portfolio through 04/2023