Bear's Portfolio through May 2019

Investment Analysis Clubs Saul’s Investing Discussions
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My 2019 Portfolio Performance YTD as of


Jan +22.48%
Feb +33.46%
Mar +38.27%
Apr +46.86%
May +43.50%

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…
Mar 2019: https://discussion.fool.com/bear39s-portfolio-through-mar-2019-3…
Apr 2019: https://discussion.fool.com/bear39s-portfolio-through-apr-2019-3…

New 2019
January - DOCU
February - SAIL
March - TTD (again), ESTC (again) and MDB (again)
April - None
May - SQ (again), ZS (again), EVBG, PLAN

Sold 2018
January - SHOP, SQ
February - WIX, MDB
March - PSTG, ZS
April - None
May - SAIL, ZEN, NEWR, OKTA

My Current Allocations


Ticker	Curr%	Buy/S	Mo Ch	YTD Ch
AYX	11.9%	11%	-2.0%	46.1%
TWLO	9.1%	-38%	-3.8%	47.8%
TTD	7.6%	87%	-10.2%	71.3%
DOCU	6.5%	31%	-1.1%	39.9%
MDB	5.8%	50%	-0.4%	67.6%
TDOC	5.6%	0%	2.2%	17.2%
SMAR	4.4%	0%	1.5%	72.9%
ESTC	3.4%	0%	-4.1%	14.8%
PLAN	3.0%	NEW	10.8%	63.9%
EVBG	2.7%	NEW	6.4%	38.5%
SQ	2.6%	AGAIN	-14.9%	10.4%
ARNA	2.2%	0%	15.9%	36.1%
ZS	0.9%	AGAIN	0.5%	75.0%
options	1.9%			
cash	32.4%

WHY I DID WHAT I DID THIS MONTH

Bought
PLAN - https://discussion.fool.com/new-position-anaplan-34220298.aspx

SQ (again): https://discussion.fool.com/thanks-for-the-response-texmex-you-s…

EVBG - I haven’t posted about it because I don’t have too many thoughts on this one yet, but growth seems to be accelerating a bit, and the PS is only 16 or so. Also only a 2.6 billion company, so it should have room to grow.

ZS - bought back a tiny position today. Could have further to fall, but I don’t know.

Sold
SAIL after earnings disappointed and they admitted problems

NEWR: https://discussion.fool.com/id-be-curious-to-hear-if-bear-sees-t…

ZEN - It was up about 50% in 5 months (I bought in Dec), and it failed to really captivate me, though their growth has been steady. I think it will continue to beat the market. That said, it’s less of a bargain than it was in December.

OKTA - a decent quarter but a share price that I don’t understand

Added to or Trimmed
TWLO - trimmed after a report where growth was not what I expected

AYX - Added a small amount on the dip in the last week or two

TTD - Almost doubled my small position. People are worried about the 41% growth this past Q. I’m not: https://discussion.fool.com/ttd-raw-numbers-34205210.aspx and https://discussion.fool.com/so-assuming-they-do-in-fact-beat-aga…

DOCU - Added a decent amount, as I’m confident in their position and opportunities. Hoping revenue growth will accelerate.

MDB - Added 50% to my small position, on a dip.

Passed
ROKU - I passed for now, but I remain interested. I just don’t understand them yet. It’s advertising, not SaaS. And very different than TTD’s Switzerland model. ROKU owns the spots they are selling. https://discussion.fool.com/fieldy-this-seems-totally-huge-1-sel…

ETSY - Doesn’t seem to have the visibility of true SaaS or even a SQ or SHOP. Also, revenue growth is slowish (will prob be below 40% in 2019).

CVNA - after taking a quick look: https://discussion.fool.com/my-case-against-carvana-34212390.asp…

Wrapping Up

I remain cash-heavy as things remain very expensive. We could be in for a dip, but we could also just be in for a slower climb than we’re used to. Or I could just be wrong and we could keep skyrocketing. Whatever happens, I’ll be happy with the strategy I’m employing now. I don’t love having a 30%+ cash position, but at this point this is just what makes sense to me.

Good luck, 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

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ETSY seems like it would have problems in a recession, and other companies may be more recession-resistant. -K

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Hi Bear,
You can take this for what it is worth. You are really to young to be in cash. You are to smart to be in cash. If you think the market is to expensive look for something that you think is cheaper. I think you are really limiting your returns by going into cash and you should be trying to extend your returns. Even if you get cut in half you will make it back. Keep fully invested, you won’t win by sitting your stars on the bench.

Andy

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Andy, I know you had good intentions with this post, but it’s OT and who are we to tell anyone they have too much $$ in anything?

I’m sitting here fully invested and up 38% YTD which is still great, but Bear is +42% or whatever with 30% in cash. Good for him, that’s phenomenal.

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Hi Lieberman,

Andy, I know you had good intentions with this post, but it’s OT and who are we to tell anyone they have too much $$ in anything?

I know you have good intentions but I think you are trying to limit discussion to much. It really doesn’t matter how much someone has made in a year or 10 years if they could make more. My post wasn’t to run down Bear, but to hopefully give him something to think about. I do not post on this board much anymore, but I thought the idea was that people who posted their portfolio, was to get critique. If I was wrong then I apologize.

Andy

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Karen,

Can you expand on why Etsy will have problems in a recession?

Gordon

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Andy,

I appreciate your posts. My response to you sounded worse than I meant it to!

I think whether or not Bear (or anyone) chooses to hold a high % in cash and then someone weighing in to tell them, they should be fully invested is off-topic.

However, if your question was more oriented at “okay abc or cde” company is a great investment, why did you sell or not buy more, that would be on topic.

That’s all I was trying to say.

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Hi Lieberman,

I appreciate your posts. My response to you sounded worse than I meant it to!

You are fine, your job is very difficult and I don’t want you to walk on egg shells just to listen to some, hopefully, productive insight.

I think whether or not Bear (or anyone) chooses to hold a high % in cash and then someone weighing in to tell them, they should be fully invested is off-topic.

I completely disagree with this statement. Saul, states many times that holding cash is folly. So since this is Saul’s board, you are off topic.

I was hoping to help Bear, and I know you are trying to streamline the board, so please do not take this as attack against your beliefs

Bear is I believe in his 30’s. So let me tell you my road to finally being able to live the life I cherish without a job.

I had a goal of being completely self sufficient at the age of 55. I hit that goal but am working 10 more months to be able to hit my full pension of 30 years. My wife and I spent 2 years of pay so that she could hit her 30 years of retirement early. I will be 57 years old and she will be 56 years and our pensions will pay for all of our expenses and more. Our investments will be for helping family members and others moving forward.

I first heard of the MF at age 30 but decided to just invest in Index funds, because that is what people said was smart. That really was stupid. Now Bear, he has a chance to really pull himself into another level of investment. That is where I would like him to be. Bear is smart and is trying to help his family, and himself. (If you ask why I say this go back and look at his post on GBX)

So, the reason why I state that Bear holding money for a pull back? I myself have done that and it has never worked out right till it has. If you have held money for a pullback since 2009 you have lost all this upside. All the people that are losing money right now are not invested in the cloud stock. The cloud stocks are growing because that is where everyone is headed. Every company, every person, it is real, it is finally here.

So lieberman, don’t appoligize, you are doing a great job, But discussing a person’s portfolio and trying to help them is never wrong.

Andy

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I’m sitting here fully invested and up 38% YTD which is still great, but Bear is +42% or whatever with 30% in cash. Good for him, that’s phenomenal.

I think that Bear may be calculating his returns differently. From his updates, cash has been between 17-34% all year which means the returns on his actual investments must be way higher than 42% to overcome all the idleness (due to cash) in the portfolio. Bear can correct me if I’m wrong.

Chris

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It’s early for me to post…but after reading this last post, I’m thinking if I’m reading about how much someone’s portfolio went up…I’m only expecting to know how their stocks/mutual funds went up, not their cash. Yes, it may be part of the bigger picture but not in regards to returns for a set point in time.

Lucky Dog, sipping coffee

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Yes, it may be part of the bigger picture but not in regards to returns for a set point in time.

Portfolio wide you need to include the cash.

Denny Schlesinger

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Well since the cash doesn’t go up very much due to low interest rates, I suppose it doesn’t make a difference since the increase in the value of the rest of the portfolio is the return we’re seeing.

LD

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Hey Godron, my thinking on Etsy and recession is that people won’t buy as many artsy and decorative objects. I mean, I’m getting FB advertising from Etsy and it’s showing me many cute things – one is a beautiful teacup that says “go to hell” inside the rim, for $44. Hmmm. These are all non-essentials. That’s all, nothing sophisticated and I have not looked at ETSY closely, but it is the kind of company I’m interested in following, not necessarily investing in. Hope that helps! -K

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In a recession nothing is safe except coming out the other side. You come out the other side by not holding marginal companies as recessions clean and gut them and they never come back. The strong get stronger however. Thus why I don’t see numbers as necessarily a means of reducing risk but quality as the means.

Saul has also stated multiple times, even if he gets cut in half he is still up x% (smashing the market) and ready to go again when the world shows it is not ending as so many think during such times.

For this year I have bought and tried on and returned Elastic. Other than that I have held Zscaler and Mongo. I bought a ton of these two last year. More this year. But have since been paying down my port so that I am at 100% invested with no margin or options or the like. Returns year to date is 75%.

Returns last year…I don’t give reports but this was relevant to this topic. At some point enough is enough. I nearly made that call two weeks ago at what has been the market top for now. Just take what I have and go home for a little while anyways. At present, if I may act like a worthless institutional Mary Meeker who somehow manages to make herself extremely rich by providing empty guidance and empty words, YES, the down side risk now is much greater than the upside at present. Gave me pause. But in the end I simply did…fill in the word…the two vowels you can buy are o and i with an n at the beginning for Wheel of Fortune sorts. May be a mistake, but I do have confidence in the fundamentals of what I own.

Into Zscaler a bit more, security stocks may have hit a near-term high. Palo Alto, the most dominant of the security companies, still growing like it is Splunk except printing cash ($1 billion a year or so now) is down 25% from its high. Zscaler is now down 15% from its high. Not actually sky is falling numbers. But the world is expecting a slow down, and even security business will slow down somewhat when the economy slows down. But hardly the world is ending sort of thing either way.

I advise no one to do what I do, and as you can see I even had a moment there two weeks ago. A good moment mind you, as it was a good choice to have to make, but a moment. There is a new generation of stocks coming up that are worth a look. If they have the same qualities as to what I hold I may add 1 or 2 more. But for now on I will never add a company (1) to play earnings or a bounce absent a real and true and transparent FUD event, and (2) never ever ever add a company just to diversify if that equates to deworsification.

It will hurt me on the up, and it will do nothing to shield me on the down. Sometimes you have to try something on first. So there will be experimentation, but no more (1) or (2). Neither (1) or (2) provide benefit nor protection.

Tinker

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Thanks Karen. I understand your thinking.

Gordon

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Austin: I’m sitting here fully invested and up 38% YTD which is still great, but Bear is +42% or whatever with 30% in cash. Good for him, that’s phenomenal.

Chris: I think that Bear may be calculating his returns differently. From his updates, cash has been between 17-34% all year which means the returns on his actual investments must be way higher than 42% to overcome all the idleness (due to cash) in the portfolio. Bear can correct me if I’m wrong.

Denny: Portfolio wide you need to include the cash.

If I’m not mistaken, you guys are all saying the same thing. The cash is a part of my portfolio. It hasn’t provided any return (other than the less than 1% my online brokers pay, I guess), so as Chris says, the stocks I hold have done better than a 42% return on average.

I appreciate the advice from Andy to stay fully invested, but I want to make it clear that I’m definitely not “holding money for a pullback.” What I’ve done is trimmed some stocks like Twilio (one of my TWLO sells was at $142+ per share) and sold out of two (OKTA and ZS) that I dislike because their valuations are so high (though I dipped a toe back into ZS on Friday). This has not hurt my return, but actually helped, as with the above Twilio example the cash I got is (at least for now) worth more than the shares. I would love to just buy something that is cheaper, as Andy advised, but it’s difficult to find stuff that I like. That’s one reason I included a few stocks I passed on, and I’m glad some of you took up discussing those. (One other note on Etsy – it looks to me like they had a huge boon 2 quarters ago from a pricing change, so those gains in growth rate could be short-lived.)

Anyway, all this to say I am very interested in discussing any companies I might add to my portfolio. I’m looking to add!

Thanks,
Bear

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