CloudL portfolio update Jan 29, 2021

In January, most Cloud/SaaS stocks were flat because experts kept saying “ sell work from home stocks”. On top of this, there’s the WSB revolution. The overall stock market is down in the last few days of January. The keyword is “de-grossing” of hedge funds. The theory is that many big funds have heavy short exposure to GME and suffered huge loss and risking margin calls. So they are forced to sell their winning stocks to reduce leverage which is not an indication of something wrong with the companies. The big funds losses don’t evaporate. It just changed hands and will go back to the economy. When dust settles, stock prices will match their companies fundamentals.

I am adding the Russell 2000 to the performance comparison. Russell 2000 may be hard to beat in the short term because it contains many momentum stocks with different revenue growth rates. My portfolio is still likely to beat Russell 2000 in the longer time frame. Let’s say more than 1 to 2 years., because I am laser focused on revenue growth rate. The longer the time frame, the further will be the difference in performance due to compounding.

My 6 stocks portfolio performance in Jan, 2021:
1 month % change: +9%
Note: I added 1 new stock at the end of January, so it’ll be 7 stocks next month.

SP500: -1.02%
WCLD: +0.30%
Russell 2000: +4.66%

Current holdings and weight(%) and price change:

Ticker   Weight     Monthly Change                           
 CRWD    20.59%        1.88%   
 PTON    18.98%       -3.68%   
 EXPI    18.34%        68.87%   
 LPRO    15.81%        3.80%   
 SNOW    15.08%       -3.18%   
 FUTU    6.99%         New 
 LMND    4.21%         18.57%   

It’s interesting to see that not all stocks go up or down in the same month. Last month, it was CROWD, PTON which contributed the most. This month, EXPI alone contributed the most gain. Next month ,maybe it’ll be other stocks to contribute gains. Many of the stocks will release earning reports and the prices will find places where they belong.

It continues its global expansion and adding more agents. The advantage of Cloud based real estate brokerage is that it can easily expand globally to other countries. The total addressable market is much bigger than US only brokerage.Agent count increased from 40,000 on Dec 14, 2020 to 43,000 on Jan 26, 2021. Agents are little revenue engines. By adding more agents means more revenue even the overall real estate is flat. EXPI adds agents organically in contrast to brokerages such as COMPASS which adds agents by acquiring other brokerages.

It announced 2-1 stock split in February. I think this is a good sign. It means the management expects the company to continue to grow its revenue and market share. The market liked the stock split and there’s lots of volume after the split announcement. Stock skyrocketed accordingly. My position is back in the green. I bought it at $78 in Dec,2020… It dropped to lowest at $60 at one point. That’s a 23% drop from my cost. I didn’t even blink. I said a 10% drop in 100% grower is like 1% drop in SP500. It’s not a big drop.

Snowflake Added to NASPO ValuePoint Cloud Solutions Contract, Enabling State and Local Governments With Secured, Governed Access to Data. Data market revenue increased 300% from last year.
Stock is not moving much because many people are sitting on the sideline waiting for lockup expiration. Valuation has become more reasonable. I continue to hold long.

Affirm IPO is a free advertising for PTON. When people learned 30% of a firm’s revenue comes from PTON, people noticed and bought PTON. Why invest indirectly in PTON’s growth when you go buy PTOn directly ? I also don’t plan to own Affirm. I still think it’s still helpful for some people but don’t like the business model. By the end of month, PTON price came down due the downgrades from analysts. If the next earnings are good, the price should rebound.

Nothing to add. Looking forward to Russian hack tailwind effect on the next earning report.
Price is flat in the month. Same as PTON. Looking forward to earning a report.

Slow and steady rise. It dropped recently due to GME squeeze and big funds de-grossing. It rebounded quickly.

Another big percentage gain. Looking forward to the next earning to validate and consolide current price gain.

New stock bought at the end of month


Revenue growth has averaged about 125% per year for the past 3 years. And it’s very profitable. It was founded by one of Tencent’s early employees and headquartered in Hong Kong. It provides brokerage service. Revenue mostly comes from trading fees. 50% of revenue is from Hong kong stocks trading and 50% is from US stocks trading.


Work from home stock???

So called strategists kept saying get out of work from home stocks and rotate into other sectors/stocks. It’s no different than saying get out of stocks and go to 100% cash during the bear market. What the heck is work from home stock? They existed way before COVID and were growing fast. Why get out of them if they are growing fast? Selling small cap fast growers and buying big caps Amazon, Apple, or declining businesses like Groupon is a bad idea. ZM is a stock I would get out but getting out of all SaaS stocks is plain stupid.

My strategy is to pick individual companies with the fastest growth rate. I don’t invest based on sectors. I don’t invest based on short term trends. I think about what the company will do in the next few years.

I got lured by the WSB stocks for 2 days and deployed 15% of the portfolio to names like: AMC, BB,BBBY for 2 days. Luckily I bought at good prices premarket before the big jump and sold them when they started crashing because brokerages are limiting trading. I didn’t lose money and made 8% and got out. I am back to myself. It was very exciting but I will not do it again! If I to do it, I will get in early and in stocks like GME where the payoff can be huge. And use very small percentage of portfolio. There’s only one GME. It was heavily shorted. AMC,BB,BBBY etc are not GME. The funny thing is this activity showed as a blip lasted 1 day on my portfolio and back to slightly above before the blip… My portfolio was up 10% in 1 day and then 2 days later, it’s back down to +3% from 2 days ago. It’s easy to lose oneself watching prices go up 50% to 100% a day.
My worry is that I can see the danger of the GME revolution where a small percentage of people don’t see the real meaning behind this and just thinking about getting rich overnight and risking money they can’t afford to lose. GME is not about making money but early buyers had a good thesis about MOASS. And they had a valid reason to make some money off it. Late coming buyers are more about supporting their point and the chance of making money for late buyers are small. They may lose most of it. It’s a point about Wall st market manipulation. It’s a small punishment for reckless wall st behavior. Think about 2009. The best outcome of this is WSB saved GME and GME turned around like APPLE did. The chance is small but still possible. Money is no longer a concern for GME and they can focus on turning the business around. If they fail to turn around, the stock wil come back down eventually. This is exactly opposite of shorts which destroyed declining businesses which had a small chance of turning around if the stock was not shorted. High stock price helps with raising capitals. In the end, I bought 1 share GME as a support for the movement.

Performance history:

Last 12 months: monthly
2021 Jan: +9%
2020 Dec: +16.4%

2021 Year To Date: +9%
2020: +71%

Some of my notes in January:

Jan 05, 2021:
‘Time to avoid WFH stocks’: Jefferies strategist

What exactly is WFH stocks? They existed way before COVID and they don’t exist because of COVID. ZM may saturate the market too fast. Most SaaS/Cloud stocks have no such problems.

Jan 06, 2021:

On the second day of trading in 2021, my growth stocks are taking a beating. My portfolio is down -2% in a day and down -3% YTD.
And I saw the news:
“As Democrats seem poised to pick up two Senate seats in Georgia’s runoff, Renaissance Macro Research’s head of economics Neil Dutta lays out the areas investors should focus on going forward.
“We like banks, energy and emerging markets,” wrote Dutta in a note to investors.”
So I checked financial, energy ETFs. Yep. They are up.
Vanguard Financials Index Fund ETF Shares (VFH): up 4.5% today. But 1 year return is: -1.6%.
Vanguard Energy Index Fund ETF Shares (VDE): up 2.9% today. But 1 year return is: -30%
Yep. Sector rotation again. Short term rotations make short term returns look impressive but look long term, return is based on companies fundamentals not jumping in and out of stocks or sectors.
There are many short term swing traders led by so called experts jumping out of sectors and into other sectors to profit in a very short term. This is a perfect example of market manipulation by wall st. What matters to me is how investment performs in 1 year or more. Yes, it’s painful to watch the portfolio correct 10% a month. That’s part of hyper growth investing. Volatility is part of it. By Jan 08, 201, my portfolio is back to the positive and ended the month up 9% on Jan 29, 2021.