End of February Update

My last update was thread 51144.

As a reminder, this (and all my past postings) are in my IRA, which includes all my retirement funds rolled over from all past employers. I have put a portion of my current 401k into a self directed brokerage option with our plan sponsor, and have roughly half my funds invested in PSJ and ARKK there. However I have no plans, yet, to include those funds in this analysis.

On Monday morning, Feb 4, “second comma” came back to my portfolio. The balance had grown sufficient for two commas for the first time on August 23, 2018. By the last week of September the balance fell back into 6-digit territory as the market carnage took down the balance. Second comma came back in February. And by Feb. 22 I had reached a new all-time high, briefly beating the prior watermark by over 2%! After pulling back some I am still above that prior high. So… 16 weeks to drop 25%, and 10 weeks to claw it all back plus a little. Wow!

Year to Date: Me: 27.2%, My Benchmark: 13.2%

======  ======  ===
PSJ     10.7%   19.2%
TWLO     9.1%   36.1%
TTD      8.8%   70.0%
AYX      7.9%   28.2%
ZS       7.0%   26.5%
AMZN     6.6%    9.1%
OKTA     6.6%   33.0%
CRM      6.1%   19.4%
PYPL     5.7%   16.5%
NTNX     5.6%   20.4% (ouch! After hours cratering)
ESTC     5.1%   26.7%
SQ       4.7%   45.1%
GH       3.8%   77.1%
APPN     3.4%   36.7%
ZUO      3.4%   30.1%
Cash     5.6%   -

I had a surprisingly small number of trades for me this month. I sold off my sole REIT, IRM. Sold off MDB. Doubled my take in ESTC. Bought into APPN and bought into GH, in two lots. That was it. I had thoughts of making other changes, but ultimately could never convince myself that change was worth doing. This was deliberate as I’ve often felt I make too many changes and just need to stop. And I’m already thinking that selling MDB was a mistake as well. Move on…

More on my performance. In early August, 2018, I first discovered this board. If I had done nothing to my portfolio from late July, 2018 my balance would be 18% lower than what it is now. Wow! In roughly six months. Granted its a hard comparison to make, as the odds of me doing nothing over 6 months is nil. But still.

Perhaps more telling is from late 2015, when I was mostly in a target date retirement fund. It was January of 2016 when I fist started with Stock Advisor and moving away from funds. Most of this time was NOT in high growth. And still, if I had kept with that fund, the story would be so different. I am currently 50% higher than I would be if I had stayed that course. So worth three years of membership fees!

My Holdings of Note

PSJ - I hold this as a means of getting some narrow diversification to my account, a way of buying a larger number of high growing software stocks than I would try on my own. And doing so in a manner likely to beat the markets. And this has done quite well for me in that regards. I’m considering adding ARKK to the mix for the same reason (already did so in my 401k, but not the IRA).

MDB - First Amazon tries to compete with MDB. Then Lyft ditches them due to performance and scaling issues. I have a big profit in them but this is getting to be too much, especially given they are still losing money. Sold all my shares in late February at $98.08. I’ll take that 37% gain in 6 months thank you.

ESTC - I’ve been reading a lot about Elastic Search. What finally pushed me over the edge to buy has been in interacting with a project here at work that uses Kibana and Elastic Search, and frankly I’ve been impressed with what they are doing with it. I have the same feelings with TEAM and DATA (I’m a user of both at work) and I need to trim some other holdings and grab a stake in these as well.

NTNX - Got back in it like many others due to the increasing move towards a software play, but after hours the stock is so far down 25% after the earnings report. I’m likely going to just dump this stock for good, after multiple attempts to get a meaningful profit out of this company.

AMZN, CRM and PYPL - My sole remaining big caps, all of which can lay some claim to also being SaaS companies. I’m considering exiting them all at this point and using those funds for other Saas companies that I am not in yet. This will probably happen in March.

What is on my mind for March?
Sell NTNX.
What to do with APPN? It is a Stock Advisor pick but took an 8% hit at earnings. Will be looking to see if I stay in this or not.
Do I trim AMZN? It’s a cloud power house, and a lot more. I’m watching this closely to see if it is worth holding more. I’ve had this stock for quite some time now.
Do I keep CRM? It’s a Cloud King and doing well, so I’m tempted to hang on to it for a bit longer.
ARKK, do I add some here? I’ve been quite happy with my PSJ holdings. Solid performance with broad exposure. I bought some ARKK in my 401(k) and will add more twice monthly. But considering a stake in the IRA as well.
Some holdings are approaching 9% allocation, at what point do I trim? These are also high-winners for me, so the current thinking is to let it ride. But at some point too much in one name makes me a nervous investor, usually around 10%. Not there yet, but inching closer.
TEAM and DATA. I use and love them both at work. Been looking at them as investments and getting close to making my decision.
DOCU. Surprised I have not pulled the trigger on this yet. In the last 5 years we’ve used the service twice during home purchases. I was impressed both times at how easy it was, especially when dealing with an amended document, or in a collection of documents. Both scenarios happen with home buying.

One final thing. Since starting this style last August I have started becoming very comfortable, finally, with these companies overall. Just look, I only have 2 large caps anymore and both are in this space, to at least some extent. And I no longer own a highly diversified index fund either. Part of my desire to trim some high allocations is to avoid single-stock-shock, but also because I am starting to find more names that I want to add to my list, but I need funds to do so. TEAM, DATA, DOCU, back into SHOP, maybe even back into MDB. I consider this a high quality problem to have.