Bear's Portfolio through Feb 2019

My 2019 Portfolio Performance YTD as of

Jan +22.48%
Feb +33.46%

It’s hard to believe the SaaS revolution (or whatever you want to call it) that we’ve caught onto has lasted this long. I do think the market has finally caught up some on the valuations of these companies, but then, if they’re growing at 60% or 70% YoY, they will still become more valuable rapidly. It’s a wonderful time to be alive.

Previous Month Summaries

Dec 2016 (contains links to all 2016 monthly posts):…
Dec 2017 (contains links to all 2017 monthly posts):…
Dec 2018 (contains links to all 2018 monthly posts):…
Jan 2018:…

My Current Allocations

Ticker	Curr%	Buy/S	Mo Ch	YTD Ch
TWLO	14.3%	31%	9.3%	36.3%
NEWR	10.2%	0%	4.0%	30.6%
OKTA	7.0%	9%	3.0%	33.0%
SMAR	6.3%	-29%	21.9%	53.8%
AYX	5.3%	-9%	7.3%	28.3%
TDOC	4.4%	0%	0.2%	29.8%
PSTG	3.7%	-19%	14.3%	27.4%
ZS	3.4%	0%	2.7%	26.7%
DOCU	2.7%	0%	11.5%	37.6%
ZEN	2.2%	0%	17.0%	35.4%
ARNA	2.1%	0%	8.6%	28.2%
SAIL	3.0%	NEW	8.0%	31.3%
options	1.2%			
cash	34.1%			

Let me just say right off the bat, I am NOT happy about a 34% cash position, and it will be swiftly remedied. I just have to figure out what to buy! Most of the cash is from selling out of Wix, Mongo, Shopify, and Square already this year. It’s hard to see other things I really want to add to, since everything has done so well lately and I’m not seeing bargains. But 34% is just way too much, so look for me to deploy most of that in March.

New 2019
January - DOCU
February - SAIL

Sold 2018
January - SHOP, SQ
February - WIX, MDB

Here is my post explaining why I sold Wix:…
And here are my thoughts (in brief) about MDB:…

Positions in companies I love
Twilio 14.3%
New Relic 10.2%
Okta 7.0%
Smartsheet 6.3%
Alteryx 5.3%
Zscaler 3.4%
Elastic 0%

These are all candidates to be 10% (or even slightly larger) positions. They are either rapidly increasing in profitability (NEWR) or growing at insane rates of ~60% or even ~70% (TWLO, OKTA, SMAR, AYX*, ZS, ESTC).

*I’m watching AYX closely after the accounting change. I think the rapid growth will continue, but it’s going to look a little different. Because they now have to report 35% to 40% of their bookings, quarterly growth will look lumpier based on seasonality.

I trimmed Smartsheet in February, as it’s up more than 50% in 2019! (Mind blowing!) And also because it was getting big and I’m still getting familiar with it. I haven’t even held through an earnings report yet!

I had reduced ZS and sold out of ESTC a month or two ago because of valuations that are too rich for my blood. I’ll be considering adding back a small position in ESTC, especially as it sold off yesterday on a good earnings report. But these two remain extremely highly valued, and I don’t see how they’re better than OKTA or TWLO or SMAR.

Try-out positions and competency-stretching holdings
Teladoc 4.4%
Pure Storage 3.7%
SailPoint 3.0%
Docusign 2.7%
Zendesk 2.2%
Arena 2.1%

My new position in February is SailPoint. This is a tryout position, but some very good write ups on the board got me interested. It has similarities to OKTA, but my confidence in OKTA is higher at present (though OKTA also sports a much higher valuation).

I reduced Pure Storage a bit, as it had gone back up some, but I’ll probably hold what I’ve got, if I keep it at all.

Wrapping Up

So that’s 12 stocks total in the portfolio right now. February went fast! I’m thrilled with my port’s performance, but I wish I could find more bargains at present. I hope to work harder in March, but it will be another busy month. Thank you to everyone on the board who has contributed. There are too many to mention, but I will call out Nilvest for some outstanding work in February. Thanks so much for sharing your findings here, and for putting so much thought into your posts!

All my best to everyone in March.


“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