Bear's Portfolio through Jul 2020

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%

My Current Allocations


Ticker	Curr%	Buy/S	Mo Ch	YTD Ch
FSLY	19.3%	7%	13.3%	380.8%
ZM	17.5%	16%	0.1%	273.2%
CRWD	14.2%	7%	12.9%	127.0%
ROKU	10.7%	5%	32.9%	15.7%
AYX	7.7%	-8%	6.8%	75.4%
PD	3.1%	NEW	6.5%	30.3%
PTON	2.3%	NEW	#DIV/0!	#DIV/0!
LLNW	0.8%	-75%	-14.8%	53.7%
TCDA	0.4%	NEW	#DIV/0!	#DIV/0!
options	4.9%			
cash	19.1%			

New 2020
January - PINS
February - none
March - OKTA
April - ROKU
May - LVGO (again), WORK, FSLY, PLAN
June - DOCU, LLNW
July - PD, PTON, TCDA

Sold 2020
January - none
February - HUBS
March - SQ, LVGO, MDB
April - OKTA
May - PLAN, PINS, SMAR, DDOG
June - ESTC, WORK
July - DOCU, LVGO

Why I did what I did this month

BOUGHT

PD - I wrote in May about why I was passing on PagerDuty for better alternatives, but as my cash mounted in July I decided to take a small position when the stock was down (around $25). https://discussion.fool.com/why-i39m-passing-on-pager-duty-pd-34… As with DOCU a month prior, I feel that holding this PD position is a better option than holding cash.

PTON - Took a small position after my conversation on the board with MajorFool20. Here are a few key posts, but read the whole thread.
https://discussion.fool.com/do-you-have-any-companies-that-you-f…
https://discussion.fool.com/peloton-already-pre-announced-on-may…
https://discussion.fool.com/thanks-bear-i-will-do-my-best-to-ans…

TCDA - Months ago, Bulwnkl identified a binary event here coming 8/22. https://discussion.fool.com/tcda-an-under-the-radar-gem-34321976…
He was kind enough to offer an update as well: https://discussion.fool.com/tcda-update-34517425.aspx
A FUD event came a couple weeks ago, and when Bulwnkl and Cosmid put it into perspective, I jumped and grabbed a tiny speculative position. https://discussion.fool.com/to-be-clear-fda-did-not-reject-the-a…

SOLD

DOCU - I bought DOCU in early June after they reported earnings (https://discussion.fool.com/thanks-for-the-write-up-kyle-on-the-…). Then DOCU went from $140 to $200+ in a month, and I figured I’d take my profit. DOCU was merely something I felt had little downside and was better than holding cash. I don’t think there’s much upside at this point. It’s a $41 billion e-signature company.

LVGO - This one has caused me plenty of consternation. It was always a small, speculative position for me, and never high-confidence. It was very good to me, but now I’m out. I guess I just don’t know if the runway is long enough to catch up with the valuation. They have a decent start (going on 400,000 users I think) but I wonder how many more of the 30 million+ US diabetic population will choose to use Livongo. Incentives will be key…but my fear is that this means it’s a potential house of cards. But it’s looking pretty for now!

ADDED TO or TRIMMED

Nothing too major, except sold a good bit of my small LLNW position. I thought the earnings call was actually encouraging, but this is a low-confidence position.

Wrapping Up

I was out of town this weekend, so we’re now one market day into August as I am posting this. Today was insane! My portfolio was up 154% at the end of the day Friday, and now it’s up 168% after today. My portfolio is 268% of what I started the year with! This is not normal! But I don’t know what to say any more. I didn’t really think a year like this would ever happen. Of course I didn’t expect it in a year like 2020, when other things have been less pleasant. This is a strong reminder that we CANNOT time the market. No matter what. Even if you know what’s going to happen, like a recession, you don’t know how the market will react.

Stay long, stay safe, be kind, be happy.

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…

Jan 2020: https://discussion.fool.com/bear39s-portfolio-through-jan-2020-3…
Feb 2020: https://discussion.fool.com/bear39s-portfolio-through-feb-2020-3…
Mar 2020: https://discussion.fool.com/bear39s-portfolio-through-mar-2020-3…
Apr 2020: https://discussion.fool.com/bear39s-portfolio-through-apr-2020-3…
May 2020: https://discussion.fool.com/bear39s-portfolio-through-may-2020-3…
Jun 2020: https://discussion.fool.com/bear39s-portfolio-through-jun-2020-3…

102 Likes

Bear

Thank you for your monthly updates.

I have been meaning to ask, why is Datadog not in your portfolio? It seems such a stalwart across this group but glaringly absent from your review. Intrigued to know if you don’t mind sharing.

Thank you

6 Likes

Jeremy,

You can see in the section where I list my buys and sells by month that I sold it in May. Then you can click the link to my May review, and you’ll see this:

DDOG - This was a MUCH smaller position for me than for others here. The PS ratio they have always sported (30+ before and 50+ now) shows that the market sees it as a long-term, inevitable winner. I just don’t have as much confidence, although clearly they are killing it now. So far I have certainly been wrong in thinking revenue would start to slow, and I may continue to be wrong. Oh well, I can’t invest in every company. Not even every company that is currently killing it with their results.

Bear

13 Likes

As always, thanks for sharing!!

Re DOCU: I would agree with you on this one but… What has kept me in is their “Agreement Cloud” (https://www.docusign.ca/products/agreement-cloud) which includes “Contract Life Cycle Management”. There is a huge need for a mainstream legal document collaboration tool which can even include notary services (something that is always a pain and adds friction to any process that needs it since traditionally it can’t be handled all at once (you have to leave and go to a notary, sometimes not even the same day). I have been thinking of this as a TurboTax-like solution for everything legal. I have gone through a few events recently that were still handled the old way (well no faxing, but close to the same workflow). It isn’t fun.

From an investing standpoint their “Agreement Cloud” adds some deeper and longer-term engagement beyond a quick signature. It makes them a platform and adds new opportunities for SaaS-type monetization, like Notary services. It essentially redefines their TAM. Hopefully this is all starting to happen now and not a bet on the future. This is what I am watching.

Re DDOG: I’m getting more and more interested in usage-based models right now, so this went up in conviction for me along with FSLY.

8 Likes

From an investing standpoint their “Agreement Cloud” adds some deeper and longer-term engagement beyond a quick signature. It makes them a platform and adds new opportunities for SaaS-type monetization, like Notary services. It essentially redefines their TAM. Hopefully this is all starting to happen now and not a bet on the future. This is what I am watching.

I’d suggest considering the potential size of the “Notary services” opportunity, and brainstorm what other opportunities this might avail them. “Agreement Cloud” to me sounds like a fancy name that doesn’t really add anything. It reminds me of when New Relic created the “New Relic One Platform” which was essentially a cool-sounding (or maybe not so cool-sounding) name, but it really just put all the services they already had in “one” place, and encouraged customers to buy more of them. Fine idea, but not really additive, and certainly didn’t make NEWR into a rocket ship.

I still think Docusign is fantastic for what it is, and specifically for the WFH environment. I just don’t see the increased demand persisting. Maybe they get another good quarter or two, but I don’t anticipate anything that makes their $41 billion valuation look cheap. So it’s not that I see a ton of risk here; I just don’t see them doubling or tripling any time soon, so I’m off to look for greener pastures.

Bear

8 Likes

…“Agreement Cloud” to me sounds like a fancy name that doesn’t really add anything. …

It is a real thing. They have a demo video. It really is agreements held in the cloud. They have an application that is like a mix of Zoom, google docs and turbo tax and it is wrapped up with workflow templates and automation (https://www.docusign.com/products/clm). Plus they have integrations and APIs to really implant document lifecycle managment in to a company’s infrastructure and existing processes.

I agree this needs watching to see how much the platform contributes to DocuSign’s growth. For now this feels like a right-place-right-time story to me so I’m holding through the next report at least.

3 Likes

They have an application that is like a mix of Zoom, google docs and turbo tax

The link you sent to the CLM product doesn’t look anything like Zoom, Google Docs, or Turbo Tax. It’s just a workflow tool that I guess notifies whoever needs to log in to Docusign and sign the document next. Nothing revolutionary there to my eyes.

Were you referring to another aspect of the “Agreement Cloud?”

Bear

Check out this demo of Liveoak + DocuSign:
https://www.youtube.com/watch?v=ypjvPEz3qv8&feature=emb_…
“The Liveoak digital customer onboarding and remote transaction platform (https://www.Liveoak.net) enables people who are not in the same physical location to complete work. Whether it be filling out applications, electronically signing paperwork, sharing documents, capturing selfie images and verifying identity - all easily completed through Liveoak’s platform. Through our secure integration with DocuSign, customers can experience Docusign’s award-winning signature ceremony along with bank-grade security inside Liveoak conference sessions. While Liveoak is a digital platform, we provide our clients with tools such as video conferencing, voice conferencing, advanced telephony and chat to keep the human element in the digital process.”

Liveoak was a recent acquisition: https://techcrunch.com/2020/07/07/docusign-acquires-liveoak-…
This was primarily announced as an upgrade to notary workflows as “DocuSign Notary”. It demonstrates how the platform can be expanded by 3rd parties (though this one is now in-house). I assume this can be a part of a CLM workflow when an agreement needs a notary specifically, but why not for other collaboration as well? Of course, this docusign support page has instructions about how to start a Zoom meeting to share your screen, so perhaps for casual stuff this is fine (https://support.docusign.com/en/articles/How-to-join-a-scree…). I can just see opportunity for more integrated collaboration features.

I’ll say again though that how much this materializes as revenue is speculation and something I’ll be watching closely for. I’m not going to stick around if it turns out to be all story. I wouldn’t blame anyone for ditching the story early to invest in other places. If there wasn’t a pandemic forcing people in to their lap to get through legal agreements I might not be as confident in holding while I figure it out.

1 Like