End Of November Musings - TMFRob

Investment Analysis Clubs Saul’s Investing Discussions
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My data is out of date. After all, it’s three days old! :wink:

The percentages have not been updated to reflect new option values. Too lazy to update, but the overall rankings and my thoughts are unchanged due to: Investment philosophy and company performance remains on course.

Portfolio


CRWD     23.3%
TDOC     18.0
ZM       15.2 (probably less today, but probably reasonably in line with what it will be shortly)
DDOG     10.2
SE        8.6
TTD       5.8
MELI      5.0
MGNI      4.5
OKTA      2.4
ROKU      1.3
FSLY      0.8
NET       0.7
STMP      0.6
AMZN      0.5
Balance is cash ~3%

Musings - No Brainers (Buy and Forget) Part I

Some of the highly successful companies listed above need to be carefully watched. After all, how certain… how long term… is any investment in computer security? IMO, strong offerings by CRWD and OKTA are here today… and they may be old news in a couple years. In the meantime, I’m thrilled with the performance. So “Yay for us!” :wink:

I ALSO like to have strong performers that are not so precarious, not so transitory/ephemeral. That brings me to a couple companies that barely register on anyone’s radar here, but are loved by a few stubborn folks like me. LOL. I refer to MELI and SE. They are sorta like baby Amazons and you don’t have to be concerned. (I’m not concerned at least!) Rising margins, growth rates just as good as anything else here. Yeah, 85-110% growth. And the stock performance is as good as the more popular companies here. But… sadly… relatively unloved except by us stubborn folks. :wink:

Musings - No Brainers (Obvious Short/Medium Term Winners) - Part II

  • STMP. They ditched a restrictive deal with the USPS in order to reach “the world”. Stock tanked because the USPS deal was perceived as the company’s moat. Guess what? Management was right! Sales and profits are booming. Price is $190, EPS (YEAH, actual EPS!!) will be in the $11-$12 range for 2020. That makes the PE stupid cheap, so I bought some calls. I doubt I’ll hold for the long term, but it’ll be a very profitable ride until I do sell.

  • MGNI. Another stupid cheap and obvious situation. Thanks for pointing it out rockleppard! I bought an obscene number of June 2021 $12.50 calls as well as some shares. Quite profitable already of course. I think another $10/share price gain is quite doable by the time I need to re-position my options.

<End of pitches for fast growth, no-brainer companies>

Musings - Other

Explanation of other positions.

  • I’m not convinced FSLY is worthwhile for the long term, but my 0.8% is in a taxable account and still short term. I think it’s worth holding at least till it hits long term since the stock is in rebound and the company is decent… just not spectacular like others.

  • NET and ROKU seem to have a lot going for them, but I think they are perhaps not as good as my top holdings and that’s why I don’t have more of them.

  • I’m still part of the “Oh my gosh, the combined LVGO/TDOC is going to CONTINUE to be a huge gainer!” camp. We’ll just have to watch the upcoming quarterly results, huh? :slight_smile: I have lots of call options here plus a bunch of shares.

  • TTD. Quite a bit of very profitable growth seems to be ahead. It doesn’t quite qualify as no brainers like MELI and SE, but I’ll keep holding. A 20 bagger for us. A triple this year. Not bad, eh? But unloved on this board. LOL

  • ZM. I responded to a recent ZM post that indicated to me that ZM is making strong earnings and is probably undervalued. This is a strongly leveraged (options) position for me.

  • CRWD. I’m pleased. Lots of words on it today and the subject has been covered.

  • OKTA. This continues to teeter on the edge for me, thinking of selling and putting more money into others I already own.

  • DDOG. Doing well. No reason to sell anything.

  • AMZN. Doing well. A tiny position just for fun.

Selling

We’re retired. We have Social Security and a super tiny pension from GE for the two years I worked there (not complaining, just explaining). Those two contributors add up to about 15% of our spending because we do a LOT of what you might call discretionary spending. So where does the other 85% come from? From selling our stock positions!

So far this year, we’ve withdrawn 16%+ of our starting portfolio amount… and will probably withdraw some more to pay these pesky bills that keep showing up.

Despite those withdrawals, we’re still up about 100%. I’m hoping we can double at least a couple more times so we can continue to increase that discretionary stuff. :wink:

Rob
Rule Breaker Home Fool & STMP/MTH Maintenance Coverage Fool
He is no fool who gives what he cannot keep to gain what he cannot lose.

95 Likes
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MGNI. Another stupid cheap and obvious situation. Thanks for pointing it out rockleppard! I bought an obscene number of June 2021 $12.50 calls as well as some shares. Quite profitable already of course. I think another $10/share price gain is quite doable by the time I need to re-position my options.

Well done with the $12.50’s. I played it a little safer and had bought $7.50’s last month.

I agree that more upside in the near term is very possible. I actually bought some more MGNI shares today, even despite the shares already doubling since I bought in initially.

After reviewing all of my positions last night, it still looked like one of the most obvious choices to me.

With today’s pop in ESTC, I decided to trim my already small Elastic position, and I sold some more DDOG too, and added to Magnite, as well as some more SMAR. I contemplated buying some more DOCU (now looking like I should have), but I’m pretty happy with my allocations where they are.

-mekong

12 Likes
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Appreciate the musing TMFRob. I don’t post much, but I’m in such agreement with the SE and MGNI portion, thought I’d share. I doubled my MGNI allocation today, and even after the new cost basis I’m up 40% or so in less than 2 months. I increased my SE position by 20% as well. Sold some CRWD and TDOC (about 15% trim each) to accomplish this. My CRWD had grown to an uncomfortably sized allocation, so I had to trim it. TDOC, while I agree has great potential, I thought the money was better used to fund SE and MGNI.

I’m very excited about the possibilities they both have…and think MGNI is about to hit hyper growth territory. Made the mistake of selling MELI about a year ago…win some and loose some.

LakeFisher

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Thanks, LakeFisher, as well as the other positive comments I’ve received on the board and elsewhere. I appreciate it.

Rob
Rule Breaker Home Fool & STMP/MTH Maintenance Coverage Fool
He is no fool who gives what he cannot keep to gain what he cannot lose.

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I thought I’d share a short version of an answer I gave to an email question regarding my investment in MGNI:

For MGNI, the signs were simple. (And if it isn’t simple, it’s less likely to succeed!). Company growth is high, the product is needed, margins are improving and the valuation was (and is) low. Annualized, sales are approaching $250 million and the market value was under $2 billion. That puts P/S under 10, whereas the companies followed on Saul’s board… with similar growth… have a P/S of 25 or 30. Therefore, I had a high confidence for investing. Since it was SO undervalued when I bought it (around $12)… . And I also bought shares.

Rob
Rule Breaker Home Fool & STMP/MTH Maintenance Coverage Fool
He is no fool who gives what he cannot keep to gain what he cannot lose.

16 Likes
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Have RB…what next? STJ