Investment Log March
This was a much more difficult month for me. Not only with my portfolio but I also found myself focusing on short term instead of long term. Over the past couple months, I’ve bought and sold positions a whole lot more frequently than I had since moving to Saul’s strategy in early 2019. My wife and some investing friends helped to set me back straight on that. One interesting thing… I’m a lot happier when looking long-term, even when the stocks are going down!
I have re-read the KB (again) and re-focused on the long-term. One thing to keep in mind, as so many have said before, is the short-term is unpredictable but the long term is very much predictable. Focus on your best ideas. While I had a tough month, I’m a better investor than I was last month.
Monthly performance & monthly allocations
Monthly performance March February ROKU -22% 21% 19% SE -9% 21% 11% CRWD -18% 20% 19% DDOG -14% 14% 7% SNOW -16% 9% 11% MGNI -19% 8% 12% DMTK -26% 5% 6% FUBO -42% 2% 5% OKTA -18% 1% 1% ZM SOLD 7%
85% of my portfolio is made up of my highest conviction positions across 5 companies. The other 15% is lower conviction but higher risk/reward potential (Fubo, DermTek & Magnite). All are performing well but I believe they are in the very early innings of their hyper growth stories.
As my portfolio fell, I fell more into the short-term focus trap. It worked the first couple times but the last few it wasn’t. The positions that hurt me the most this month are my lower conviction ones (Magnite, DermTech, FuboTV).
Sold Zoom after its CC, and after the 20% pop (10 during hours, 10 after hours). Many had the takeaway that it was a blowout quarter, however, I don’t share that opinion. Yes, the YoY growth was eye popping but that was expected. What wasn’t expected is the huge drop in growth QoQ. In consecutive quarters, it went from 100% from previous Q, to 85% annualized to now 66% annualized. Guidance for next quarter, with a similar beat annualizes to 50%. Seems their growth for this year will be much closer to 50%.
Put those funds into Sea Limited right away and after Zoom reported and before Sea Limited reported (Sea Limited reported the next morning). It seemed to me that a blowout quarter for Sea Limited was as sure a thing as there could be. Judging from all the other ECommerce reports (Shopify, Mercado Libre, Etsy…). Proved to be a great short-term move. Sold some of that after the pop and redistributed the funds across the portfolio. Most notably upping my Data Dog position. This was short-term trading. Worked out in this case but later in the month, not so much.
Sold out of Snowflake just after their earnings and spread that money among my top convictions. Later in the month, sold part of my Fubo as I was going to put hedges in place. This is when I regained long-term focus and put the already sold funds into Snowflake. Also re-allocated funds from Magnite into Snowflake. I’m very very bullish in Snowflake, the only hesitiation I had around it was valuation. My initial plan when they IPO’d was to buy in sometime after the lockouts. I got antsy and ended up pulling the trigger before. Should have stuck with my plan.
Cloudflare, Inari, Roblox, ZScaler, Twilio