Buy the Best, Sell the Rest

I’m having a great year, I hope all of you are too. I haven’t been filling in my sells with
new purchases for several months due to time restraints. Considering that 3 of my positions
are actually different purchases of existing positions, my ports are running on only 9 stocks.
Not being foolish enough to think I’m some great investor, I know that a lot of the gains to
date have been attributable to luck and only luck. So it’s time for a change. Here’s what I’m
holding today.

**Ticker	Equity Name        	Bought   	Size   	Gain	CAGR	Plan**
ALGN	Align Technology, Inc.	05/10/17	8.2%	91.4 %	223.7%	Hold
ANET	Arista Networks, Inc.	08/23/17	4.0%	39.6 %	249.6%	Hold
FB	Facebook, Inc.     	04/23/15	3.0%	119.4 %	35.3%	Cut Down
FB	Facebook, Inc.     	03/21/17	4.1%	31.4 %	48.7%	             
GOOGL	Alphabet Inc.         	05/20/15	3.1%	96.6 %	30.7%	Cut Down
GOOGL	Alphabet Inc.         	03/21/17	3.8%	25.4 %	38.8%	             
MA	Mastercard Incorporated	02/21/17	5.0%	41.1 %	56.2%	Sell
PAYC	Paycom Software, Inc.	05/22/17	2.8%	30.2 %	66.1%	Cut Down
PAYC	Paycom Software, Inc.	06/05/17	5.9%	28.7 %	68.6%	             
PYPL	PayPal Holdings, Inc.	05/01/17	6.1%	64.0 %	135.5%	Cut Down
SHOP	Shopify Inc.         	02/27/17	7.9%	82.3 %	121.3%	Hold
SWKS	Skyworks Solutions	05/01/17	4.1%	8.6 %	15.4%	Sell
Cash	USD                	n/a     	42.1%			
						
       	Total                 	           	100.0%			

After doing considerable analysis on all my holdings, plus the stocks I’ve screened and
some of the fav’s mentioned here at Saul’s Place*, I have already entered sell
orders for 100% of my Skyworks and Mastercard shares, and a portion of my shares
of Paycom, Facebook, Alphabet and PayPal. They’re all (except maybe SWKS) doing very
well, don’t get me wrong. I considered several as anchors in my fast-mover portfolios.
But with 70%+ gains in the mirror, I’m not so interested in anchors now and these companies
just aren’t growing fast enough to make the cut. Plus holding lots of GOOG and FB is not
all that different any more than holding the S&P 500 index.

I have also entered Buy orders to fill in all the gaps. The quickest way to explain
this is to give you my target allocations. I plan to use the target for all ports.
Feel free to comment or criticize the choices (that’s what I’m looking for.)

Target Allocations


**Ticker	Company name                  	Size Target**
ANET	Arista Networks Inc           	10.0%
SQ	Square Inc                    	9.0%
ALGN	Align Technology, Inc.        	8.0%
SHOP	Shopify Inc (US)              	7.0%
IPGP	IPG Photonics Corporation     	6.0%
ABMD	ABIOMED, Inc.                 	5.0%
FB	Facebook Inc                  	5.0%
LRCX	Lam Research Corporation      	5.0%
TREE	Lendingtree Inc               	5.0%
CGNX	Cognex Corporation            	4.0%
GRUB	GrubHub Inc                   	4.0%
MKSI	MKS Instruments, Inc.         	4.0%
MU	Micron Technology, Inc.       	4.0%
NVDA	NVIDIA Corporation            	4.0%
OLED	Universal Display Corporation 	4.0%
PYPL	Paypal Holdings Inc           	4.0%
GOOGL	Alphabet Inc                  	3.0%
ORBK	Orbotech Ltd                  	3.0%
PAYC	Paycom Software Inc           	3.0%
BESIY	BE Semiconductor Industrs NV (	2.0%
HDP	Hortonworks Inc               	2.0%
ISRG	Intuitive Surgical, Inc.      	2.0%

The total is 103% due to the fact that I’m using all limit orders and I
don’t expect nearly all of them to hit. I will also probably need more
targets for unmet orders that get away from me. For those I plan to use
the following in this order:

Backup Targets


COHR	Coherent, Inc.               
LGIH	LGI Homes Inc                
SLK	Westlake Chemical Corporation
TTII	Take-Two Interactive Software
ADBE	Adobe Systems Incorporated   
ATVI	Activision Blizzard, Inc.    
AVGO	Broadcom Ltd                 

Rounding Out The Top 50 In Alphabetical Order


BABA	Alibaba Group Holding Ltd
CLGN	Celgene Corporation
DAIO	Data I/O Corporation
DXC	DXC Technology Co
EA	Electronic Arts Inc.
FANH	Fanhua Inc (ADR)
HFC	HollyFrontier Corp
IGPFF	Imperial Ginseng Products Ltd.
INTT	inTEST Corporation
MOMO	Momo Inc (ADR)
MSFT	Microsoft Corporation
NETES	NetEase Inc (ADR)
NKTR	Nektar Therapeutics
ON	ON Semiconductor Corp
SKWS	Skyworks Solutions Inc
STMP	[Stamps.com](http://Stamps.com) Inc.
TRTN	Triton International Ltd
V	Visa Inc
VEEV	Veeva Systems Inc
VMW	VMware, Inc.
WB	Weibo Corp (ADR)

Buy the Best, Sell the Rest!

That’s what I’m trying to do, while adding just a bit of diversity. Let me
know what you think, and good luck all!

Dan

  • It’s interesting to see how so many stocks favored on this board compare
    to my data-intensive methods of screening and ranking. Most of the big-time
    favorites show up on the screens and score very well, while very few score
    poorly, which tells me that we’re probably all on the right track even if we
    start with different methods of finding candidates.
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Buy the Best, Sell the Rest

That sounded like a great idea until I got to

I have already entered sell orders for 100% of my Skyworks and Mastercard shares…

that sounds like reaching for yield which generally ends badly. “Reaching for yield” is selling underperforming mutual funds to buy the better performing ones. That generally ends badly because they revert to the mean, losers rise and winners fall. Sector rotation also happens. Right now high tech is golden but at some point it will lose some of it’s luster as investors start lusting for something else.

Had you sold a dog I would not have written this post but VISA and MasterCard are two fantastic financial stocks with no credit risk. And their performance, as you say, is excellent.

http://softwaretimes.com/pics/ma-11:29:2017.gif

BTW, MA made a new ALL time high yesterday.

Denny Schlesinger

13 Likes