Big ups, big downs. It was quite a month. It was nice to see the beginning of earnings stem the indiscriminate selling of everything. However, there were random days that continued indiscriminate selling; mostly due to geopoliticial concerns I think. In any case, as the indexes have continued to not do so well, SaaS has shown strength. Earnings for all my positions that have already reported have been from solid to phenominal!!
February:
-3.1%
YTD:
-22.7%
I decided to show the change in my portfolio month over month instead of what it currently is and the monthly performance of those positions. I find it more meaningful to see the reasons people buy/sell.
February January
Data Dog 25% 24%
Snowflake 22% 22%
ZScaler 19% 19%
SentinelOne 12% 15%
Cloudflare 11% 3%
MongoDB 5% NEW
Monday 4% 14%
Transactions:
For a major earnings month, my transactions were relatively few. I sold some Monday and opened a position in Mongo with those funds. Unfortunately, my timing on that was awful as it was after Monday was down after-hours and it has since recovered and then some. I had been contemplating opening a position in MongoDB for a while and the good-not-great report from Monday was a good ‘excuse’ to move ahead with it.
I think it was inevitable that I was going to get into MongoDB so I was mostly looking for what of my positions to sell, what shows weakness that is different from my allocation.
Most of my investing this year is around B to B SaaS. The general industries are:
Security (S, NET, ZS, DDOG)
Data (DDOG, MDB, SNOW, NET might get deeper into here with their R2 and whatever they come up for a database)
The only real outlier is Monday
As of today, my conviction is in tiers.
Tier1 = DDOG, SNOW, ZS
Absolute CATEGORY CRUSHERS! Their customers rely heavily upon them.
Tier2 = S, NET, MDB
These are more big-time players/not quite category crushers, YET. Lot of potential to be just that. Solid to great growth and operational metrics. Again, their customers rely heavily upon them
Tier3 = Monday - The industry is too fragmented to know who the winner will be. WAY TOO FAR away from becoming a category crusher. Customers rely upon them but might not be as much of a MUST HAVE for all companies like the rest of the portfolio. They have been punished WAY TOO MUCH so I must admit a part of my staying in them is they seem to me more likely to recover more than some others. I know, this could be catching falling knives but at least it is still a very solid grower continuing to execute, so its not exactly like catching the falling knives I did last year with Fubo (still think they’ll put it all together but that’s another story).
Why did I re-enter MongoDB?
I’ve been watching for a while. Sold them a while back but been keeping track. It was nice to see Atlas being over 50% of their overall revenue 3 quarters ago. Atlas continues to grow faster than the rest of the business. DATA is the biggest driver of, well, everything. MDB is well-situated for a world of mobile apps and such due to the inherent differences between it and most of the big databases out there (Oracle, SQL Server, Postgres, MySQL). DATA EXPLOSION is most definitely happening and continuing at a higher and higher rate every single day. While this database sits in large datacenters, it can be configured to be uh… trying not to get too technical here; so those who understand the tech better, don’t shoot me well, basically can be configured to be across multiple data centers around the world. Not quite an EDGE type of database that Cloudflare might develop but closer to the edge than a traditional database. It is a GREAT database for writing a ton of data to. In our world of mobile apps and mobile data and remote work, this is a huuuuuuge advantage.
Reported companies summary
Datadog - OUTSTANDING quarter. Looks to continue to grow very solidly. Possible to see some slight deceleration later on this year but its also possible their Security stuff starts to play a bigger role and extends these 80% YoY growth numbers.
Cloudflare - Continuing to grow at a steady pace. There are signs of slight acceleration. I love that they are executing well enough to be in my portfolio on stuff but continuing to put pieces together that could make them absolutely EXPLODE.
Monday - Reported right in the expected range. Very solid numbers and continuing to grow at a great rate. Watch the large customers; absolutely exploding.
ZScaler - VERY solid quarter. Sold off for ridiculous reasons. I’d have joined Saul and others in adding in the after hours if it wasn’t such a large position and I was comfortable selling other stuff in my portfolio… Maybe in the future I’ll heed Saul’s max 20%-ish per position… I dunno, maybe.
As for the rest, they are well-covered. I post my thoughts, probably too much, on FinTwit (@FinallyFoolin). I know I see and follow a lot of you on there. I really appreciate being able to discuss these and other stocks; seeing others ideas and opinions and such out there. This board is uber valuable but a lot of that discussion would mostly clog this board up. Its kinda like a break-out discussion area…