My 2019 Portfolio Performance YTD as of
Jan +22.48% Feb +33.46% Mar +38.27% Apr +46.86% May +43.50% Jun +58.27% Aug2 +65.38% Aug(31) +62.13% Sep +35.64%
Woof. As most of you know, the market has been “rotating” away from high PS stocks (or high momentum…or whatever, we never know exactly, do we?) for over a month now. A lot of people think the worst has come at the end of September because it’s the end of the 3rd quarter for funds who report their gains or losses quarterly. They may want to show locked-in gains by selling positions they’ve held for a while that were way up, or they may simply want to show that they got out of these stocks that have recently been falling. I don’t really know – all this is speculation. Whatever the case, as most of the market has rotated out, I’ve rotated further into hyper-growth SaaS stocks. I got rid of TDOC, SQ, and DOCU this month and added to my favorites, and also bought back into CRWD. I even picked up a little try-out position in DDOG. More about all that below.
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…
May 2019: https://discussion.fool.com/bear39s-portfolio-through-may-2019-3…
Jun 2019: https://discussion.fool.com/bear39s-portfolio-through-jun-2019-3…
Jul (Aug2) 2019:https://discussion.fool.com/bear39s-portfolio-through-aug2-2019-…
Aug 2019: https://discussion.fool.com/bear39s-portfolio-through-aug-2019-3…
January - DOCU
February - SAIL
March - TTD (again), ESTC (again) and MDB (again)
April - None
May - SQ (again), ZS (again), EVBG, PLAN
Jun - CRWD, FSLY, WORK, TWOU
Jul - MDB (again)
Aug - PINS, OKTA
Sep - CRWD (again), DDOG
January - SHOP, SQ
February - WIX, MDB
March - PSTG, ZS
April - None
May - SAIL, ZEN, NEWR, OKTA
Jun - MDB, ARNA
Jul - None
Aug - EVBG, CRWD, FSLY, PLAN, TWOU
Sep - SQ, TDOC, DOCU
My Current Allocations
Ticker Curr% Buy/S Mo Ch YTD Ch MDB 13.5% 15% -20.9% 43.9% TWLO 13.1% 60% -15.7% 23.1% SMAR 11.8% 10% -25.9% 44.9% ESTC 11.0% -18% -6.3% 15.2% AYX 8.0% -17% -24.6% 80.6% ZS 7.0% 100% -31.2% 20.5% CRWD 6.1% NEW -28.3% #DIV/0! PINS 3.9% 100% -23.2% #DIV/0! OKTA 2.9% 100% -22.2% 54.3% TTD 1.4% -78% -23.7% 61.6% DDOG 1.0% NEW #DIV/0! #DIV/0! options 10.0% cash 10.2%
You could say I’m at 11 positions now. More accurate would be to say I have 7 positions that make up 70% of my portfolio, then 4 small to very small positions, then some options, then some cash.
WHY I DID WHAT I DID THIS MONTH
Crowdstrike (CRWD) - The main reason I cut CRWD last month was valuation. (https://discussion.fool.com/why-i-prefer-zs-to-zm-and-crwd-34281…) This month it dropped about 35%! Needless to say, I added back, in several chunks, on the way down.
Datadog (DDOG) - A tiny try-out position. Bert wrote them up, and they have a lot of nice growth drivers. I’ll be watching and potentially adding more.
SQ and DOCU - I described my reasons for selling these here: https://discussion.fool.com/what-i39ve-done-today-34291355.aspx
TDOC - I mentioned this one here: https://discussion.fool.com/thoughts-as-the-slide-continues-3430…
The reasons I sold all three were similar: they were lower growth and/or lower conviction, and they were either up, or weren’t down nearly as much as other things. I “rotated” into higher growth, higher conviction stocks that were down more.
Added to or Trimmed
I trimmed ESTC and AYX just slightly, as they weren’t down as much as others. I wanted to spread the money among my favorites that were down more. Don’t read too much into it.
I added to MDB, TWLO, and SMAR. Especially TWLO, because I believe they have the best floor.
These are my five largest positions right now. I have owned them for a while, I’m familiar with them and the ways they make money, I have a good idea of their size and scope, and what their valuations are and have been. I’m really comfortable with large positions in them.
I also doubled my small positions in ZS, PINS, and OKTA when the prices fell. ZScaler is now becoming a larger position; the others are still small.
I cut TTD completely before it fell too much. I added a little back, and I’d be interested in adding more, but it’s always been lower conviction for me, so I’m just holding for now.
I continue to be fascinated with Roku, but even 40% cheaper I can’t bite, because I really don’t understand their value prop, their customers, and how they make money. I get what they do, but the numbers just don’t make sense to me. Many of you have explained it well…it’s just that the numbers are confusing.
Well! This wasn’t a fun month! I hope you saw it coming and got out before losing 25% or so! I’m not good enough to do that. Luckily, I had some cash, most of which has been deployed now. But the bottom line: I still love these companies to crush the market! Not only that, I’ve gone from:
“Meh, these are looking pretty pricey!” (July)
To “This is more like fair value…I think I’ll fill out my positions.” (Early September)
To “Ok…these are actually starting to look like bargains again! Hello 2017!” (The last few days)
That’s just how I see it. As you know, you each have to decide for yourself. Personally, I never “follow” anyone – I take what I can from the voices that make the most sense and are the most transparent. And whoever I listen to, I try to remember that as one board member said to me in an email: “Its easy to be a critic, its hard to be a leader.”
Good luck, and may October bring us all better weather!
“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