2024 Portfolio Review
Portfolio Return: These are my returns after adopting most of Saul’s growth strategies.
25-year/lifetime average results = 23.3%
The focus of my investing, true to my TMF and Wall Street Week in Review with Louis Rukeyser’s investing roots is to buy great stocks and try to hold as long as possible. I have improved my investing by using what I have learned from Saul. I have a concentrated portfolio of 6 growth stocks. I also have a concentrated portfolio of 5 – 7 income stocks which provides my retirement income through dividends and covered calls. Altogether, I track about 12 stocks. Although I try to hold as long as possible, I will sell when I think my thesis is broken. About a third of the time, I get my sell decisions wrong. And about a third of the time, I get my buy decisions wrong. For anyone who wants to invest, the price of entry is being wrong sometimes. As investors, we MUST embrace our fallibility. My efforts focus on being wrong less often. I’d like to be wrong a quarter of the time.
Year to Date Return
As I mentioned previously, I try to have solid, mostly growth oriented, companies for income from dividends and covered calls. It takes a certain amount of volatility to get a decent return on call options, so I avoid great companies with low volatility (e.g. Costco). But I will mention my income portfolio one time this year, because my income stocks allow me the diversity and income stability to continue concentrated growth investing and because some of them are considered growth stocks. I won’t be discussing these further, so contact me offline if you would like to discuss my income portfolio:
Comments on Companies
Mercadolibre (11.2% YTD): Revenue was up 35% during the 3rd quarter, but earnings were up less than expected due to recent investments in 6 new fulfillment centers and the effects of lower net interest margin in its credit portfolio. The credit margin change was made by a more conservative lending portfolio. The company looks great to me, and I am expecting better things next year. Since when is it bad for a company to manage their credit risk conservatively while maintaining high revenue growth?
Nvidia (173.5% YTD): Blackwell chips are rolling out. There’s no end in sight for the demand in AI chips, yet I hear constant fear that NVDA has run its course. We are getting to the end of the training phase for Large Language Models but just starting the inference phase. Now is when value will be monetized. The more worry I hear the better I feel about holding. Cash on the sidelines is always fuel for a stock rise.
Nu Holdings (16.5% YTD): This company, like Mercado Libre, moved to increase the ratio of secured loans to credit card loans. A bank caring about its long-term stability is a good thing. I like the 56% FXN revenue growth of and long-term prospect, and even though it was hit hard in December, I plan to stay the course. Since when is it bad for a company to manage their credit risk conservatively while maintaining high revenue growth?
AXON (136%): Axon was promoted from my income portfolio to my growth stock portfolio. It’s business is too strong. Cloud services revenue grew 36% and annual recurring revenue grows 36%. I’m excited about Axon’s technology to create police reports from body cam video. I think that will ease the burden on our police forces while improving accountability too. A win win that is likely to propel growth for years to come.
Monday (26.3% YTD): Monday has rewarded my patience and it’s rolling price increases have been well accepted. Its revenues are up 33% YOY and its net retention rate is 111%. Their top apps are sticky and very useful. The following are some of their top apps:
Best,
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