My 2018 Portfolio Performance YTD as of
Jan +12.97% Feb +25.35% Mar +28.02% Apr +28.03% May +40.39% Jun +53.23% Jul +46.44% Aug +78.67% Sep +82.00% Oct +63.92%
Well, in October the market clearly turned bearish on many of our stocks. I used the dip as an opportunity to spend my cash, and re-evaluate some position sizes. Also, just yesterday I sold out of Instructure, the only position I had that was up in October - most are down 10, 20, or even 30% percent.
I’ve been struck recently that, scary as it is, whatever day we hit bottom is the best day to be fully invested.
I have no idea when that day will be or if it already was, but I must say the last 2 days have been nice. After bottoming a few days ago, I’m now (again) up 64% YTD.
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…
Jan 2018: http://discussion.fool.com/bear39s-portfolio-through-jan-2018-32…
Feb 2018: http://discussion.fool.com/bear39s-portfolio-through-feb-2018-32…
Mar 2018: http://discussion.fool.com/bear39s-portfolio-through-mar-2018-33…
Apr 2018: http://discussion.fool.com/bear39s-portfolio-through-apr-2018-33…
May 2018: http://discussion.fool.com/bear39s-portfolio-through-may-2018-33…
Jun 2018: http://discussion.fool.com/bear39s-portfolio-through-june-2018-3…
Jul 2018: http://discussion.fool.com/bear39s-portfolio-through-july-2018-3…
Aug 2018: http://discussion.fool.com/bear39s-portfolio-through-aug-2018-33…
Sep 2018: https://discussion.fool.com/bear39s-portfolio-through-sep-2018-3…
My Current Allocations
Ticker Curr% Buy/S Mo Ch YTD Ch WIX 11.3% 0% -18.6% 69.3% NTNX 9.8% 38% -2.7% 17.8% TWLO 8.7% 8% -12.8% 218.8% MDB 7.3% 10% 0.1% 179.2% AYX 6.6% -13% -7.4% 109.7% NEWR 6.4% -20% -5.3% 54.5% TLND 6.3% -18% -11.5% 64.6% PAYC 5.6% 67% -19.4% 55.9% ZS 5.5% 196% -11.0% ESTC 5.5% NEW SHOP 4.0% -38% -16.0% 36.8% ANET 3.4% 62% -13.0% -1.8% SQ 2.6% -71% -25.9% 111.7% TDOC 2.5% NEW -19.7% 99.0% ARNA 1.9% 60% -22.4% -1.4% options 5.0% cash 7.5%
January - No adds
February - AYX, NEWR, OKTA
March - MDB
April - No adds
May - NTNX
June - PVTL
July - PAYC (again), MDB (again)
August - NEWR (again), TWLO (again)
September - ZS, ARNA
October - ESTC, TDOC (again)
January - TTD
February - TDOC, ALRM
March - NVEE
April - MDB, OKTA, NEWR
May - none
June - PVTL, HDP
July - MU, HUBS
August - none
September - PSTG
October - INST
Instructure was up 15% on a fairly tepid Q report. The stock is incredibly cheap, but the company is not growing very fast. Paraphrasing, management basically said, “We can only do so much in the environment we’re in.” They’re winning at every turn, but their market simply isn’t growing rapidly. I think it’s a good company that will do fine and could be worth holding for a less concentrated investor. They’re just not singing my tune.
I will now discuss each of the 15 companies in which I hold shares.
WIX.COM - WIX (11.3%)
About the company: Wix is a company that helps users create websites, and then hosts them. It makes most of its money by charging subscription fees for premium content. They are very affordable, so people use them for all sorts of reasons – entry into ecommerce, a personal blog, a professional portfolio. They have some powerful tools for experts, but even a novice like me can create a website for free. Wix has over 125 million users, and more than 3 million of them pay for premium accounts.
Latest Quarter Review: http://discussion.fool.com/wix-june-quarter-33135804.aspx
Monthly Actions: I love Wix at these prices, but my position is already huge. I would definitely buy an oversized position if I didn’t have one already, but no need to add to it.
Conviction Status: This is a rare company where I think the long term growth will be outstanding and the market cap is actually lower than I would expect (as is the PS ratio). If the PS ratio were 15+, I’d probably trim Wix to a normal position, but with the PS at 9 (!), I’m happy with an oversized position.
NUTANIX - NTNX (9.8%)
About the company: Nutanix provides a single point of control to for IT professionals to manage infrastructure and applications, on-prem and in the cloud, at any scale.
Latest Quarter Review: I appreciated both Chris and Saul sharing their thoughts:
Monthly Actions: I added substantially to my position in October. The numbers look great, so until that changes, I’ll be clinging to my shares.
Conviction Status: In normal circumstances I’d be comfortable with an 8% position. I’ve increased it to almost 10%, but that’s just because it’s such a bargain. As it hopefully goes back up, I’ll probably trim to keep it under 10%.
TWILIO - TWLO (8.7%)
About the company: Twilio makes web service APIs for phone calls and texting. Software developers who subscribe to Twilio’s platform can use these services in their products, and this works out great on both sides: from customers’ perspective they only have to pay when these services get used, and from Twilio’s perspective, the more the services get used, the more Twilio gets paid.
Latest Quarter Review: from Saul:
Monthly Actions: I had to add a bit on the dip in October.
Conviction Status: I’m comfortable at an 8% position. It’s now around 9%, so I will think about trimming soon.
MONGODB - MDB (7.3%)
About the company: “MongoDB is the leading modern, general purpose database platform, designed to unleash the power of software and data for developers and the applications they build. Headquartered in New York, with offices across North America, Europe, and Asia-Pacific, we are close to where you do business. MongoDB has more than 6,600 customers in more than 100 countries. The MongoDB database platform has been downloaded over 40 million times and there have been more than 1 million MongoDB University registrations.”
Latest Quarter Review: here are two great posts by Wouter28:
Monthly Actions: At this valuation it’s difficult to add, but I slightly increased my MDB position in October.
Conviction Status: I’m comfortable with up to an 8% position.
ALTERYX - AYX (6.6%)
About the company: Alteryx is a little company that is changing the landscape of data integration and analysis for data scientists. They have a product that from all accounts is inexpensive, easy to implement, and saves users incredible amounts of time while enhancing accuracy. The companies who try it seem to love it, because every year they spend (on average) 30%+ more money with Alteryx!
Latest Quarter Review: http://discussion.fool.com/gross-margin-of-89i-mean-that39s-not-…
Monthly Actions: I reduced my position in early October to raise cash to buy other things, but later in the month as AYX fell more, I bought some of it back.
Conviction Status: I’m comfortable with up to an 8% position.
NEW RELIC -NEWR (6.4%)
About the company: New Relic monitors web and mobile applications in real time, detecting issues before they become problems, and helping companies figure out where the pain points may be before it costs them sales, or even customers. Along with Cisco’s acquisition, AppDynamics, and a private company called Dynatrace, New Relic is one of the main leaders in the APM space (Application Performance Monitoring). Also, they partner with Splunk.
Latest Quarter Review: from Fish - http://discussion.fool.com/new-relic-q1-2019-earnings-33143321.a…
Monthly Actions: I reduced my shares held, but this is misleading because I took a substantial option position.
Conviction Status: I’m comfortable with a full-sized (8%) position.
TALEND - TLND (6.3%)
About the company: Talend has carved out a niche within big data integrations by specializing in Hadoop, an expertise that will not be easily disrupted. Saul has called them a “category crusher,” a leader with no viable competition in its niche. I tend to agree, though others will not ignore this space forever. Hopefully Talend will continue to build up years of subscription revenues while they occupy the catbird seat.
Latest Quarter Review: (I meant Q2) http://discussion.fool.com/bear39s-talend-q1-thoughts-33142874.a…
Monthly Actions: I reduced my shares held (when shares were around $65), but this is misleading because I took a substantial option position.
Conviction Status: I’m comfortable with up to an 8% position.
PAYCOM - PAYC (5.6%)
About the company: Paycom’s offers a comprehensive payroll / HCM solution highlighted by their single-database software as a service solution. This greatly simplifies things for small to medium sized companies who want their HR data to be in one place.
Latest Quarter Review: This came out yesterday: http://investors.paycom.com/press-releases/press-release-det…
Monthly Actions: I added today, after it dipped on what I thought was a solid quarter.
Conviction Status: I’m comfortable with at least an 8% position. I trimmed it in August because of price, but this month I added back, and if it falls or falters I might add more.
ZSCALER - ZS (5.5%)
About the company: Zscaler provides native cloud-based security, and here’s how they describe it: “Back in the day when your users were all on the network and your applications resided in your physical data center, it made sense to establish a secure perimeter around your network. But those days are over, the perimeter is gone, and network security is all but irrelevant. Instead, you need to put your defenses and controls where the connections occur— the internet — so that every connection is fast and secure, no matter how or where users connect or where their applications reside.” https://www.zscaler.com/company/about-zscaler
Latest Quarter Review: from Saul: https://discussion.fool.com/zscaler39s-results-my-thoughts-34000…
Monthly Actions: https://discussion.fool.com/zscaler-wading-in-34015154.aspx
Conviction Status: I’m comfortable with up to a 6% position. All the results are phenomenal, but I have this nagging prejudice against any company that does any kind of internet security.
ELASTIC - ESTC (5.5%)
About the company: Elastic is yet another big data-focused company. The simplest way I’ve heard it explained is that it’s like Google for your data. But that’s Elastic Search, and they have other products as well. I don’t understand all the products, or all the ways Elastic is best in class, but their 80% revenue growth the last several quarters gives me confidence.
Latest Quarter Review: they haven’t officially reported as they only IPO’d about a month ago, but many posted on this board about the numbers they divulged in their S-1. Here are my two favorites:
Monthly Actions: I opened a position and added several times.
Conviction Status: I’m comfortable with up to an 8% position. As ESTC is trading at a PS around 25, I’ll probably keep my position under 6% for now.
SHOPIFY - SHOP (4.0%)
About the company: To slightly modify what they say about themselves, Shopify is “the only platform you need to build your [small or medium sized business] empire [online].” They provide a customizable website you can set up as an online “storefront,” inventory management to track your product, methods of taking payments, etc, etc, etc. They make money when businesses sign up with them, and then they make more when those business grow and sell more stuff.
Latest Quarter Review: https://discussion.fool.com/shopify-sep2018-quarter-34047629.asp…
Monthly Actions: After debating, I trimmed some today. I believe Shopify will do fine, but with revenue decelerating and profitability slow to materialize, it’s hard to want to go all in right now. It’s not like they’re “cheap.”
Conviction Status: I’d be comfortable with up to an 8% position, but I’ll probably keep it around 4 or 5% unless something changes.
ARISTA NETWORKS - ANET (3.4%)
About the company: Arista sells network switches, just like Cisco, except Arista’s switches use SDN (Software Defined Networking), which I understand makes for better control, performance, and security. It also really seems like Arista has the best in class product.
Latest Quarter Review: Jim’s is good, and I agree they continue to print cash: http://discussion.fool.com/anet-33139472.aspx
Monthly Actions: I added in October. Part of this is, the price is right. But also I want to see if they can re-accelerate revenue.
Conviction Status: I don’t feel like I have superb insights to this business, but judging by the likely outcomes, I do think it’s undervalued. I’m comfortable with up to a 5% position.
SQUARE - SQ (2.6%)
About the company: https://discussion.fool.com/square-about-the-company-34020450.as…
Latest Quarter Review: http://discussion.fool.com/square-june-quarter-more-wow-33137913…
Monthly Actions: I trimmed SQ several times in October. The first was mostly price-based (at $97), and was very small. Then I sold a larger portion (around $86/share) to raise money. The third was when Sarah Friar left. The 2.6% position is misleading, though, because I added back some options.
Conviction Status: If anyone is still reading, I want to be clear here. This is not a company I’m uncomfortable about at all. I would be comfortable with a much larger position, but this is just where I am right now. I bought 2 new positions this month and added to others and it had to come from somewhere. I’ll certainly consider adding back soon.
TELADOC - TDOC (2.5%)
About the company: Teladoc is a rapidly growing (though partly by acquisition) telehealth company. What’s a telehealth company? Well, you can actually meet with a doctor via a Skype-like visit online, rather than going into the doctor’s office. Sounds like the future, huh? I owned Teladoc before and even wrote them up back in June 2017: http://discussion.fool.com/teladoc-32753167.aspx
Latest Quarter Review: They report Q3 tomorrow, but for now this will have to do: https://ir.teladochealth.com/news-and-events/investor-news/p…
Monthly Actions: I bought back in.
Conviction Status: I am comfortable with a small position. I don’t plan to make it a full position – but it’s revolutionary enough that I’d like to keep an eye on it and a foot in the door.
ARENA PHARMACEUTICALS - ARNA (1.9%)
This one is completely speculative and my only excuse is that Bulwnkl has a great track record: https://discussion.fool.com/binary-event-3-arena-pharmaceuticals…. That said, I bought a tiny position and added a little in October, but don’t plan to add more. Big thanks to Bulwnkl for sharing!
My best to all!
“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