CloudL portfolio update - Aug 31, 2021

Since my last portfolio update in Feb, 2021. I was out of growth stocks for 6 months! I decided to provide an portfolio update.

I am officially back in hyper growth on Aug 13, 2021. The timing was perfect because of earning reports.

My current portfolio is completely different from what it was in Feb, 2021. The only stock in common is UPST. Back then, my objective was to maximize return targeting 100% per year and beat everyone else. So I made stupid mistakes. Now, I don’t care what the actual return will be and I don’t try to beat anybody. One thing I am sure is the portfolio will likely return a consistent 30% to 50% per year which I will be satisfied with.

The current portfolio is more prudent, and without recklessness.
Current portfolio design target: 3 high conviction holdings giving 15% to 20% weight totaling 50% weight with around 50% growth rate and large addressable market. 25% weight in proving winners with 30% growth rate which I call them core holding. 25% weight in experimental fast growers with 70% to 100% growth.
We can call this balanced hyper growth portfolio.This portfolio is relatively stable. It’s still desirable to have low volatility while producing 30% to 50% return.

I think it’s still helpful to share portfolio updates to new and old members of this forum. The reason I was able to move from Dividend, to 200 growth stocks, to 30 growth stocks, to 6 growth stocks was because of the portfolio updates on this forum. They prove that a concentrated hyper growth portfolio is no more risky than dividend stocks while providing a much higher return. Concentrate but watch them carefully. Then I made stupid mistakes by over concentrated for my ability with 6 stocks. Now I am back up to around 10 stocks. I think 10 is the optimal number of stocks for me to hold to balance risk and return. 6 are too few for me, too volatile for my taste. So 10 is perfect. Everyone is different. Some may do well with 2 stocks, 3 stocks, or 6 stocks.

My investing style is strategic instead of tactical. That means I don’t get too deep into details. I have an overview of things and make decisions based on that. On this part, I admire Saul’s ability to quickly gather the targeted data and present convincing arguments which I lack in this area. I am able to observe what good companies worthy to invest are like. Saul goes much further to prove why they are good.

Portfolio and weight as of: Aug 31, 2021

Symbol	       Currency	        Weight   Share price % Change since Aug 13
TSE:NVEI	CAD		20.30%	       25.59%
TSE:DCBO	CAD		14.47%	       17.92%
TSE:LSPD	CAD		13.99%	        17.75%
NET		USD		9.47%		-0.83%
UPST		USD		9.37%		12.71%
SPT		USD		9.24%		19.02%
BILL		USD		8.17%		32.01%
DLO		USD		5.63%		27.46%
MNDY		USD		3.69%		41.61%
TASK		USD		3.18%		57.21%
GLBE		USD		2.48%		12.72%

Most of the positions were bought on Aug 13, 2021.

Since I am in Canada, it makes sense to have around 50% allocation in Canadian stocks. Both DCBO and LSPD are traded in the US. I bought the CAD version because I am in Canada. NUVEI is currently traded in Canada but will list in the US soon.

August was a good month for this portfolio because all of them reported good earnings in August. Overall, it’s up a whopping 19.99% since Aug 13, 2021 in little more than 2 weeks! What not to like to get a 20% return in 2 weeks and boost the networth from negative 5% to positive 10% YTD? It’s interesting that all the stocks in this portfolio have an earning date in the same month! I didn’t pick them specifically by their earning dates. How interesting?

If I were in those stocks at the beginning of year, I would probably up 50% to 100%. We can’t go back in time. This shows opportunity cost is expensive! Saul is absolutely correct in the knowledge base which he tells us to stay invested at all times even during the scariest time.

As one member pointed out, most stocks are already discussed heavily on this form and their results are known. There’s no point in talking about the same numbers again and again.
I’ll talk briefly about some of the less known names.

Growth rate: 44% per year for the past 4 years. It accelerated to 23% sequential QoQ growth in recent quarters.(130% annualized) It’s currently undervalued.

It’s the largest non-bank payment processor in Canada. It did many acquisitions over the years. It serves customers around the world. Naturally, the addressable market in Canada is tiny. The only way for Canadian companies to have hyper growth is to go international like Shopify. Its growth rate is impressive and it already turned a profit several quarters ago.
Early growth and profitability, where can you find one like this? I can think of DLocal. It’s undervalued so it’s been going up non stop for the whole year! It’s up 300%! I saw its IPO back then but didn’t recognise its potential.

Right now, NUVEI is only traded on Toronto Exchange. It applied for a US listing and should be approved in the next few months or a year if conditions are met.

Growth rate: 54% per year for the past 4 years. It accelerated to 16.6% sequential QoQ growth in recent quarters. (84% annualized). Its stock crashed early in 2021 while there’s nothing change in the business. It’s still growing at 50% or more per year. and is still in recovering mode. It’s currently undervalued.

It’s a leading Cloud based learning/training system. Customers include many major companies: Amazon, Uber, Walmart, HP, BMW etc… and more.

SPT: Sprout Social
Growth rate: 45% per year. It’s not a super fast growth rate but somehow the stock returned a total of 617% in about 2 years or 170% per year annualized! Presumably, it’s because it was under valued to begin with.

Sprout social is a social media management system. It’s highly rated by its customers. (4.3 / 5 ). Glassdoor rating: 4.7/5.
This belongs to core holdings which I plan to hold for a long time. Core holding should provide stable and consistent returns over a long period of time.

Growth rate: 37% per year from the past 3 years. It’s not super fast growth but it’s currently undervalued and profitable.

What it does: It provides outsourced customer care service to fast growing tech companies who can’t handle the customer care explosion like ZOOM VIDEO. It’s cheaper and easier for them to outsource customer service. There will always be the next fast growing tech companies.

Initially, I got in as a value play. In and out twice. I think it has potential to be a core holding like SPT. I’ll see how it goes in the next few quarters.

My own criticism of my past portfolio.
Previously:My reckless portfolio on Feb 29, 2021:

Ticker   	     Weight                            
 MWK(ATER)           21.63%       
 UPST                21.02%      
 EXPI                20.29%          
 SLBG                14.39%        
 CRWD                11.8%           
 FUTU                7.33%         
 LMND                3.54%  

As you can see, most of them performed terribly except UPST and CRWD.
If we concentrate, we need to be extremely careful!

-21% weight in MWK(changed to ATER) which lost 90% if I didn’t sell out. Another member who followed my picks kept adding to MWK and suffered 50% portfolio loss. I am sorry for him. I said if it were me, I wouldn’t add to the losers. Average down on an apparent loser is a value trap.

-21% in UPST: it was a good pick but I didn’t do enough DD and 20% is too much for a starter position. I also panic sold when it dropped from $100 to $50 at a huge loss during the interest rate hike scare. The decline was extremely scary! It’s a steady landslide drop of 50% without pause or bounce. Without strong conviction. Many people sold at a loss. At the time, I thought the market knew something I didn’t. It turned out the scare was unfounded. This is the result of not enough DD/conviction.

-SLBG: 14% weight in an over the counter stock with just 1 year history and almost no volume? Come on! I thought it’s small and had huge growth potential like PTON but I was wrong.The stock went nowhere for 6 months and Its revenue declined during the last quarter. Its addressable market is too small.

-FUTU: 7% in a chinese stock, while a small weight, chinese stocks are risky.

-LMND: 3%, while a small weight, its business model is questionable. Loss kept increasing. Donate excess profit? Is it a non profit organization?

We can only think objectively once we get out of the stocks.It’s too easy to emotionally attach to the company. If we are still in the stocks, we will find reasons to defend it. It’s important to think objectively.

Thought of the month:
-Success breeds success. Successful investors are deep pocketed. and they will help great companies to succeed. Then investors are rewarded as a result and the pocket gets bigger. This is a virtuous cycle.


Since I am in Canada, it makes sense to have around 50% allocation in Canadian stocks. Both DCBO and LSPD are traded in the US. I bought the CAD version because I am in Canada. NUVEI is currently traded in Canada but will list in the US soon.

I have purchased NUVEI in the US under the symbol NUVCF. Over the counter and wide but it can be bought here.