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.
For the second month straight, everything I own was down except Axon (and my new position, Remitly – more on that below). I added to most of my positions, and cash fell below 20% of the portfolio for most of the month – the lowest it’s been pretty much all year.
I sold out of Okta after they had another breach. To me, if the brand is in question, it seems likely the numbers won’t outperform – whether it gets harder to attract new customers, or they lose pricing power, or whatever. And to be honest, Okta needed to continue to outperform (beat and raise) to have even medium upside. And of course, lack of upside isn’t even the worst case. No reason to wait around hoping for a bounce – I’m out.
A word about the positions I own:
Axon - Their revenue is growing better than most and the multiple is lower than most and profitability is increasing. What’s not to love?
Samsara - At 43% YoY last quarter, this is our fastest growing SaaS company right now. It’s not cheap, but they sure do keep putting up the numbers. Profitable for the first time in Q2, and I expect much more will come soon.
ELF - This is the position I added to the most in October. With 76% YoY revenue growth last quarter, ELF is growing faster than any other company I own other than Celsius. And ELF is even profitable, with a trailing PE of less than 40. If things keep going like this, I think they will prove very undervalued.
Monday - Clocking in at 42% YoY growth last quarter, this is our faster SaaS grower after Samsara. Also they’ve gone from -16% FCF to +26% FCF margin in 4 quarters. That’s impressive. I don’t expect them to take over the world, but they appear to be executing really well.
Remitly - There has been some discussion of Remitly on the board, and I know Saul and a few others own it. I finally got around to looking at it a couple weeks ago, and I was impressed. They seem to be growing fast in a huge market, and margins are improving. I added a small position and I’ve already added to it a bit.
Procore - Niche SaaS (construction), and I think they’re still a little underappreciated by the market. Like with Samsara, expanding profits are imminent.
Nvidia - Remember it or not, this one was actually up to $470+ in early October. I trimmed a lot to take some small profits (and to be opportunistic), but as it has fallen back toward $400 (and briefly below), I’ve added some back. It’s hard to figure how much upside Nvidia has, but just based on next year’s expected EPS of ~$16, it’s not expensive with a fwd PE of ~25.
Celsius - How long can this torrid growth last? I really don’t know, but there seems to be a big market for energy drinks, and they seem like the “it” brand right now, taking massive share.
Aehr Test Systems - Hard to believe it was just a few weeks ago that Aehr reported earnings. The numbers were fine, but they didn’t raise guidance. I didn’t love that, but it wasn’t the end of the world. You’d think it was, though, as now Aehr’s stock price has fallen nearly 50% in October! I had to add some this week.
Just as in October Axon and Remitly did better than most stocks in the market, I hope the other stocks in my portfolio will be able to do the same (or even better) in the coming months. Perhaps through their earnings reports, they can remind the market that just like Axon and Remitly, they all have a lot of strength and growth and coming profits – that things are improving for these companies more rapidly than for most other companies. That’s the way I see it, anyway.
Here’s hoping for a better month in November!
“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
May 2023: Bear's Portfolio through 05/2023
Jun 2023: Bear's Portfolio through 06/2023
Aug 2023: Bear's Portfolio through 08/2023
Sep 2023: Bear's Portfolio through 09/2023