My 2019 Portfolio Performance YTD as of
Jan +22.48% Feb +33.46% Mar +38.27%
I continue to do my discriminate portfolio jockeying. I base my trims, adds, buys, and sells on thoughts like I expressed in this post: https://discussion.fool.com/next-year39s-revenue-34169176.aspx
In March I nearly doubled my AYX position and sold out of my ZS position, at least temporarily. I know this is controversial, but I am decidedly NOT trying to time the market. If I never get back into ZS, so be it. I’m not going into cash or slow growing “safe” companies. I’m simply shifting money to favorites that I think are a better bargain at present. Speaking of which, I also increased my Okta position substantially.
Actually I’ve cut my cash position in half from last month from 34% (higher than I ever wanted it) to 17%. I’m becoming ok with keeping a 10% - 20% cash position. It has allowed me to take advantage of a bunch of dips.
Now let’s talk about what else has been going on in March.
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…
Jan 2019: https://discussion.fool.com/bear39s-portfolio-through-jan-2019-3…
Feb 2019: https://discussion.fool.com/bear39s-portfolio-through-feb-2019-3…
January - DOCU
February - SAIL
March - TTD (again), ESTC (again) and MDB (again)
January - SHOP, SQ
February - WIX, MDB
March - PSTG, ZS
My Current Allocations
Ticker Curr% Buy/S Mo Ch YTD Ch TWLO 16.1% 6% 6.2% 44.7% OKTA 11.4% 67% -2.5% 29.7% NEWR 10.9% 14% -6.7% 21.9% AYX 10.4% 80% 9.9% 41.0% SAIL 5.6% 100% -6.9% 22.2% DOCU 4.7% 86% -5.9% 29.4% SMAR 4.2% -38% 6.9% 64.4% TTD 4.1% NEW 0.1% 70.4% TDOC 3.8% 0% -13.5% 12.4% ESTC 3.3% NEW -11.8% 11.7% ZEN 2.3% 0% 7.6% 45.7% MDB 2.0% NEW 44.8% 75.6% ARNA 1.9% 0% -10.2% 15.1% options 1.8% cash 17.4%
Yes, finally! I got back into The Trade Desk for the first time in over a year. I still don’t completely understand it, and I’ll always feel like advertising is a crazy business, but I’m intrigued by their opportunity in what seems to be a time when walled gardens are on the way down.
I bought back into ESTC as the price has come way down, and I also re-bought a tiny MDB position just to do something with the cash (and honestly probably from fear of missing out).
The big 4
I added to OKTA and AYX as I mentioned above. Along with NEWR (which I also added to slightly) and TWLO, these are the 4 companies that I believe have the best balance of several factors.
- They all seem to be priced reasonably. OKTA, AYX, and TWLO have PS ratios in the 20’s, while NEWR’s is in the low teens. Obviously NEWR is growing the slowest, but…
- I think all have good prospects for rapid growth to continue (if not accelerate), which to me is the key to our type of investing. And…
- I have confidence in management, and the business model for each of these makes sense to me.
Moving on from Pure
I sold Pure Storage after they reported a quarter that disappointed a bit. They still seem extremely undervalued, but I’m just not interested in following them anymore.
Closing ZS for now
I sold Zscaler based on valuation. There are too many other things that are just as good in my mind and much less pricey. When SaaS stocks rise, they tend to all rise. I do think Zscaler is one of our best. But I don’t think Zscaler is “better enough” than all the others to justify its current price. So I sold it, and bought others.
Other adds and trims
I also doubled SAIL and nearly doubled DOCU. I think both are fairly priced or underpriced, and I’ll be interested to see what they do if the companies manage to accelerate revenue, which I believe they will (SAIL’s is down due to lumpiness, DOCU just seems to be tapping into latent potential).
I trimmed SMAR when it ran up to nearly $50 after earnings, which I thought was too much. I have bought some SMAR back around $40, but not as much as I had before. (Remember, I was buying it at $24 just a few months ago!)
One final question worth considering is what the market is seeing in ZS and MDB. MDB now sports a PS around 30, and ZS’s is in the high 30’s! They each went up 40%+ in March, while many of our others were down. As I said in my last post, the market seems to be pricing in continued acceleration from ZS and continued triple-digit Atlas growth for MDB. I’m not sure those things are such a foregone conclusion. I think these things are great, but are these two companies unique among our favorites? Their valuations are. What do you think?
I also hope to find new companies to invest in…but it does seem like the market is onto our little SaaS niche. Some people have posted about some upcoming IPOs. Slack especially seems interesting. We know from ESTC that we’re probably not going to get anything cheap on day 2 anymore. But, IPO or not, please keep bringing ideas to the board in thoughtful write-ups!
My best to everyone in April!
“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