Bear's Portfolio through Aug 2019

PaulWBryant · August 30, 2019, 5:07pm

My 2019 Portfolio Performance YTD as of


Jan +22.48%
Feb +33.46%
Mar +38.27%
Apr +46.86%
May +43.50%
Jun +58.27%
Aug2 +65.38%
Aug(31) +62.13%

New 2019
January - DOCU
February - SAIL
March - TTD (again), ESTC (again) and MDB (again)
April - None
May - SQ (again), ZS (again), EVBG, PLAN
Jun - CRWD, FSLY, WORK, TWOU
Jul - MDB (again)
Aug - PINS, OKTA

Sold 2018
January - SHOP, SQ
February - WIX, MDB
March - PSTG, ZS
April - None
May - SAIL, ZEN, NEWR, OKTA
Jun - MDB, ARNA
Jul - None
Aug - EVBG, CRWD, FSLY, PLAN, TWOU

My Current Allocations


Ticker	Curr%	Buy/S	Mo Ch	YTD Ch
MDB	12.3%	30%	8.2%	81.9%
SMAR	12.0%	33%	-3.4%	95.5%
ESTC	12.0%	38%	-6.8%	23.0%
AYX	10.6%	0%	9.4%	139.5%
TWLO	8.1%	0%	-2.4%	46.1%
TTD	6.8%	-25%	-5.8%	111.8%
SQ	6.1%	167%	-11.1%	10.3%
DOCU	4.3%	0%	-4.3%	16.5%
ZS	4.3%	67%	-17.7%	75.3%
TDOC	3.6%	0%	-16.9%	16.8%
PINS	2.1%	NEW	1.9%	#DIV/0!
OKTA	1.6%	NEW	-4.6%	98.3%
options	0.4%			
cash	15.9%

WHY I DID WHAT I DID THIS MONTH

Bought

PINS - Pinterest wasn’t even on my radar, but Ethan’s write up here was so clear and convincing, that I took a small position upon reading it. https://discussion.fool.com/pinterest-a-new-position-34276093.as…

OKTA - It’s been hanging around $130 for three months…after the report it dipped to the mid 120’s, so I thought I’d dip a toe back in. Want to keep an eye on it and see what happens next. Still seems pricey to me, but it’s an interesting business – just not blowing the doors off like ESTC or AYX.

Sold

EVBG - Never really got into this one. Sold the morning after they reported a yawner quarterly report. It may be fine from here, but it’s not for me…and I was a little skittish with a PS near 20 and a lower growth rate (under 40% typically): https://discussion.fool.com/evbg-june-2019-quarter-34266841.aspx…

CRWD - Sold after the run up, to add to other things. Here’s a post I wrote explaining my thinking: https://discussion.fool.com/why-i-prefer-zs-to-zm-and-crwd-34281…

PLAN - They reported Tuesday morning, and it was kind of meh. 46% revenue growth, 121% NER. Everything was simply OK, but nothing was stand-out. I want stand out companies, and I just can’t convince myself PLAN is in the same league as other stuff I own with similar valuations and market caps.

FSLY - I didn’t hold this one for very long. I bought it in June when Bert wrote about them on Seeking Alpha. Then the quarterly report came and the stock got crushed. In the few weeks since it has doubled. Why? Good question. With a growth rate around just 35%, this one seems now overvalued if anything. Too weird anyway. I wouldn’t be surprised to see it double again in the next couple years, nor would I be surprised to see it get cut in half like Talend or Nutanix did. Either way, I’ll watch from the sidelines.

TWOU - After it bounced back 30% this month I took the money and ran. They’re a messed up company…hope they can right the ship, but it won’t be easy and I won’t be around for it.

Added to or Trimmed

Added a little ESTC on a dip - expecting good earnings as they guided confidently. I wasn’t disappointed. My review of the quarter is here: https://discussion.fool.com/below-i39m-updating-my-usual-estc-qu…

Added a little SMAR on a dip - expecting good earnings as they guided confidently.

Added to MDB after considering their $8 billion market cap, and vast potential.

Added a ton to SQ. I still think it has plenty of room to run, even though it’s a larger company than many of our others. I’ll probably stick with a mid-sized position, though. It’s not going to set the world on fire. But there are worse places to park money. I know this isn’t a ringing endorsement, but I like holding SQ shares a heckuva lot better than holding more cash.

Added significantly to ZS. It was just little chunks here and there, but it added up. It’s still not cheap, but it’s a great company, so I’m not sure how much cheaper it is likely to get.

Trimmed TTD - I was slightly disappointed by another quarter without acceleration. Maybe I shouldn’t have been…just seems like they talk a good game about taking over the world, but the revenue growth is slower than you’d expect. Still, I may just be expecting too much, and I’ve already added back a tiny amount of what I sold.

Passed

Continue to pass on ROKU…and I continue to be wrong.

Wrapping Up

9 of my 12 stocks were down in August. I think it’s fair to say a little of the froth has come off. That’s not to say anything is “cheap.” But ESTC, TTD, and TWLO have PS ratios around 21. My top two positions, MDB and SMAR, have higher PS ratios (just above 25), but when they report earnings next week, we’ll see what happens. I just can’t imagine selling my stocks, especially for the companies with market caps of just 5 or 6 billion (SMAR and ESTC), or even 8 or 9 billion (MDB and AYX). That said, I still have a cash position of more than 15% of my portfolio. I think I’m pretty happy whichever way things go in the ultra-short term (which I always want to be the case), but I’m not betting on a severe correction from here. Of course, we never know! Good luck in September, everyone!

Bear

“I guarantee nothing but hard work.” - Bear Bryant, Alabama Football Coach, 1958 - 1982

“A man’s gotta know his limitations.” - Dirty Harry

“If you must tell me your opinions, tell me what you believe in. I have plenty of doubts of my own.” attributed to Goethe (but not sourced)

“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

“exponential compounded growth does not fit the analytical backward looking skill sets of most Wall street analysts” - mauser96

“I presume the thing is to ride the momentum for the short squeeze and exit fast with enough money for a few months supply of whisky before everyone realises it’s a value trap.” - Strelna

nilvest · August 31, 2019, 2:06pm

Bear… thanks for update…

I am surprised you got back into Okta… even at $120ish and after another quarter of ~50% growth, it is very richly valued (30 p/s) and you seem to be someone hones into value… not challenging, just curious you see something I am missing because I did sell out my last Okta holding yesterday… i feel even after paying tax on my gains, i have more upside in other places… e.g. TNDM, ESTC…

For me Okta continues to be one trick pony, and yes they will keep growing at >40% rate for next may be 4 to 10 quarters, it will be be hard for it break out and valuation already reflects next two years growth…

I may be totally wrong… have been dead wrong in exiting TTD and SHOP and MELI too soon this year… but thats price action, i havent seen TTD or SHOP revenue really breakout…

On the other hand it seems that ESTC, TNDM, AYX, ZS, ROKU (no particular order)are either already accelerating revenue or likely to accelerate (ESTC) soon…

just my 2 cents… and curiosity on your OKTA thoughts.