Bear's Portfolio through Dec 2020

PaulWBryant · December 31, 2020, 4:40pm

My 2020 Portfolio Performance YTD as of


Jan +23.79%
Feb +26.86%
Mar +10.12%
Apr +31.49%
May +62.13%
Jun +118.30%
Jul +153.87%
Aug +210.88% (actually, as of midday 9/3)
Sep +239.00%
Oct +237.95%
Nov +310% (as of Dec 4)
Dec +319%

Positions


Ticker	Curr%	YTD Ch
CRWD	15.3%	324.7%
NET	14.1%	345.4%
DOCU	13.1%	200.0%
ZM	9.2%	395.8%
ETSY	5.8%	301.6%
ASAN	4.3%	#DIV/0!
BAND	3.6%	139.9%
TLND	3.0%	-2.0%
SKLZ	1.8%	#DIV/0!
Cash ~30%

Cash position This may be a controversial statement, but I don’t think our stocks look as attractive today as they have in the recent past. They’re a lot more fully valued than they were recently, especially CRWD and NET which are my largest positions. I also see a lot of things I don’t hold (SNOW, ZS, DDOG, etc) as very pricey currently. Doesn’t mean they aren’t worth it…just limits the upside. Hard to see any of these doubling in 2021.
Holding cash is tricky. I may be leaving money on the table, but I’m fine with that. You know I will take a swing at the big opportunities when they come along. When I don’t see them, it seems like a great time to de-leverage, diversify a little (move from 5 positions to more like 10), and hold some cash. But who knows, a week from now, I might feel differently. We’ll just see what the new year brings.

Crowdstrike (CRWD) - 15.3% (down from 21.7%)
10/31/2020: $123.84
12/4/2020: $167.26
12/31/2020: $211.82 Market Cap Approx: $50b

Here are my thoughts about why I’ve trimmed it from a huge position to merely a very large one: https://discussion.fool.com/why-i-trimmed-crwd-significantly-347…

Cloudflare (NET) - 14.1% (up from 10.7%)
10/31/2020: $51.97
12/4/2020: $77.35
12/31/2020: $75.99 Market Cap Approx: $23b

This has been the opposite experience for me vs CRWD. NET was too small a position for me, so I’ve had to add rather than trim. It has been difficult as the valuation reached nosebleed levels, and I admit to trading out of a tranche at $85+ only to buy it back a few dollars lower. But I have added aggressively the last several days as the price has fallen to the mid 70’s. NET is innovating, perhaps faster than any other company I’m aware of. They have already accelerated revenue growth and I think their growth rate will go higher. The market seems to think so as well, judging by the PS ratio. Still, this can become a company worth a lot more than $23 billion. Can it double or triple in the next few years? Sure. It will probably be more of a steady climb than a rocket ship from here, but they’re getting there faster and faster.

Docusign (DOCU) - 13.1% (down from 16.4%)
10/31/2020: $202.25
12/4/2020: $243.22
12/31/2020: $222.30 Market Cap Approx: $47b

I’ve actually learned (from Saul) to limit my enthusiasm for a company when the market doesn’t share it. Otherwise I might have increased my allocation in DOCU to 20%. Revenue growth is accelerating, they’re adding a ton more customers, and everything seems great. I guess the market cap might turn some people off, but DOCU has a large revenue base already and it’s extremely impressive that they are growing it at an accelerating pace. A little tempted to buy more, but I’ll sit back with my current allocation for now. It is a very large position already.

Zoom (ZM) - 9.2% (down from 11.7%)
10/31/2020: $460.91
12/4/2020: $410.01
12/31/2020: $337.32 Market Cap Approx: $103b

This is another one where I’m not adding more simply because I’ve learned (from Saul) not to ignore the market and momentum. The decline here is clearly saying something. I don’t agree, but I need to at least see what the market is saying. At a market cap of $103 billion, it is fair to ask where Zoom goes from here. Do they really have the potential for hypergrowth at this scale? I think they might for the next year or two, but it is not a slam dunk. My hope rests mostly on the fact that they are still monetizing the users they added this year, so we haven’t seen a peak yet. More on that here with thanks to AThinkingFool: https://discussion.fool.com/tom-your-post-from-last-night-specif…

Etsy (ETSY) - 5.8% (down from 7.0%)
10/31/2020: $121.59
12/4/2020: $155.03
12/31/2020: $177.91 Market Cap Approx: $24b

Etsy has caught on with the market the last couple months. So why have I trimmed instead of adding? Unlike CRWD, it’s not the “future potential” or the “price” metrics that concern me. It’s the growth. Growth this year was fantastic, but I just have no idea where it will settle. The upside makes me want to keep a position, but not a large one.

Asana (ASAN) - 4.3% (new)
12/31/2020: $29.55 Market Cap Approx: $5b

You’ll notice that this is the smallest company so far, by a factor of 4. I’ve been seeking out new companies hard lately, and Asana is one of the few to interest me so far. The multiple is a fraction of CRWD’s or NET’s, and with a lower revenue base the growth rate is very fast – near 60% for now. We’ll see if they can keep it up, but it’s hard to imagine this not being a good price to get in.

Bandwidth (BAND) - 3.6% (new)
12/31/2020: $153.67 Market Cap Approx: $4b

I started looking into BAND after this post: https://discussion.fool.com/band-q4-guidance-55-is-it-interestin…
It is important to note that the 55% guidance includes an acquisition, but still, it is interesting.

Talend (TLND) - 3.0% (new)
12/31/2020: $38.34 Market Cap Approx: $1b

This company is only growing revenue at 20% or so, which means it’s off topic for this board, for now. I bought a little because it’s incredibly inexpensive (PS ~4), but this is a bit of a lottery ticket. I’m hoping they’ll start growing enough to be relevant, but for now it’s just a hope.

Skillz (SKLZ) - 1.8% (new)
12/31/2020: $20.00 Market Cap Approx: $8b

I looked into Skillz after this fantastic post: https://discussion.fool.com/skillz-sklz-34700727.aspx

Many Happy Returns in 2021!

2020 was a year that was in many ways not worth remembering, but in which investing in fast-growing companies was a haven, in many ways. I have so much to be thankful for, and near the top of the list are this community Saul has built and the friends I’ve made here. Thank you all, and I hope 2021 is a great one!

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…

firefreedom · January 2, 2021, 10:56pm

Congrats on a great year, Bear. And for your contributions on this board.

I’ve actually learned (from Saul) to limit my enthusiasm for a company when the market doesn’t share it.

As I read your comment, I couldn’t help but think about ESTC. The revenue growth has been consistently solid, yet there was a time that the stock did not get the appreciation of the market. Some of that has now been corrected, the stock trades at 23x forward sales. Yet, its only a $13B market cap.

I don’t believe DOCU is in the same camp as ESTC though. I don’t know if I agree with your sentiment about the market not sharing the enthusiam about DOCU. After all, the stock was up 3x in 2020, even if the stock went sideways for a few months at the end of the year.

If anything, I think the stock might be mispriced and perhaps deserves more of a premium than what’s on offer currently. I’ll happily wait

Anyways, congrats again for a wonderfull year. And happy 2021.